The United Auto Workers (UAW) strike against the Big Three U.S. automakers General Motors (G.M.), Ford, and Stellantis has extended without a resolution. The strike began on September 15, 2023, involving nearly 150,000 UAW members working nationwide at the companies’ plants. UAW strike has caused a significant disruption in the auto industry, affecting the production of vehicles and the supply of parts and components. The strike could cost the Big Three automakers $1 billion weekly in lost revenue.
The strike has caused a significant disruption in the auto industry, affecting the production of vehicles and the supply of parts and components.
Causes of the UAW Strike
The cause of the UAW strike is the dissatisfaction of the union workers with the current contracts and policies of the Big Three U.S. automakers: GM, Ford, and Stellantis.
The workers demand higher wages, better pensions, more job security, a more significant share of the companies’ profits, and an end to the two-tier wage system that pays newer hires less than veteran workers. They also want to restore the cost-of-living allowance adjustments, the defined benefit pension, the right to strike over plant closures, a reduced work week and more paid time off.
The workers feel that they have not been fairly compensated for their contribution to the recovery and success of the auto industry after the 2008 financial crisis and the 2020 pandemic. They also feel a huge gap between their pay and the pay of their CEOs, who have seen their salaries increase by 40% between 2013 and 2022.
President Joe Biden supported the workers while urging both sides to reach “a win-win” agreement. Senator John Fetterman, D-Pa., walked the picket line with striking workers in Wayne, Michigan. Actor Danny Glover visited the picket line at G.M.’s Fairfax plant in Kansas. G.M. President Mark Reuss said the company had made a “record offer” and that “often in these situations, the clouds of rhetoric can obscure reality.”
The UAW strike is one of the largest and longest labor actions in the U.S. auto industry in recent history. It reflects the growing discontent and frustration among workers who feel they are not getting their fair share of the economic recovery and growth. It also poses a challenge and an opportunity for the Biden administration, which has pledged to support unions and workers’ rights. How the strike will end and its impact on the auto industry’s future remain to be seen.
What are the demands of the UAW?
The UAW is the union that represents workers in the U.S. auto industry. The UAW is on strike against the Detroit Three automakers: Ford, General Motors, and Stellantis. UAW has a list of demands it wants to achieve in the new contract negotiations. Some of the main demands are:
- A 36% pay increase over four years for all workers. This is based on the rise in CEO salaries since 2007.
- The elimination of the two-tier wage system pays newer workers less than older workers for doing the same job.
- The restoration of the cost-of-living allowance that adjusts wages according to inflation
- The provision of defined benefit pensions for all workers, not just those hired before 2007,
- The right to strike over plant closures and job security issues
- A reduced work week of 32 hours and more paid time off
What is the impact of the strike on the auto industry?
Some of the effects of the strike are:
- Thousands of temporary layoffs across the U.S. as suppliers and dealers are affected by the disruption in the supply chain. Some workers have been forced to file for unemployment benefits or seek other jobs.
- Reduced inventory and sales of new vehicles, especially the popular and profitable SUVs and pickup trucks that are primarily produced in the U.S. This could hurt the market share and revenue of the Detroit Three automakers, as well as their ability to invest in new technologies and products.
- Increased pressure and scrutiny from politicians and regulators, who have expressed their support or criticism of the strike. President Joe Biden has backed the striking workers and urged the companies to go further in their negotiations, while former President Donald Trump is planning to hold a rally with autoworkers next week during the Republican primary debate.
- Poor competition with foreign manufacturers and adapting to electric and self-driving cars threaten the reputation and image of the U.S. auto industry.
- Possible damage to the reputation and image of the U.S. auto industry stems from its difficulty competing with foreign manufacturers and adjusting to electric and self-driving vehicles. The strike could also affect consumer confidence, loyalty, worker morale, and solidarity.
Impacts of the strike on the U.S. economy
A strike can affect the economy in various ways, depending on its duration, scope, and intensity. Some of the possible effects are:
- Loss of productivity and output: When a strike occurs, the affected industry’s production and delivery of goods and services are reduced. This can lead to shortages, higher prices, lower quality, and lower profits for employers.
- Economic costs and revenue losses: A strike imposes costs on workers, employers, the government, and society. The workers lose their wages and benefits, while the employers lose sales and market share. The government loses tax revenues from both parties and may have to spend more on public services such as security, health care, and social welfare. The society suffers from reduced economic activity, lower living standards, and social unrest.
- Diminished investor confidence and FDI: A strike can erode the confidence of investors and foreign direct investors (FDI) in the stability and attractiveness of the affected industry or country. Investors may perceive a higher risk of labor disputes, political instability, or regulatory uncertainty and may reduce or withdraw their investments. This can limit the access to capital, technology, and markets for the affected industry or country, hamper its growth and development potential.
Some negotiations are happening between the UAW and the Detroit Three automakers. UAW plans to return to the bargaining table on Saturday, September 23, after about 13,000 workers walked out of three factories run by Ford, General Motors, and Stellantis on Wednesday, September 15.
The negotiations have been described as a series of constant conversations that union leaders say aren’t progressing much. The UAW has set a noon deadline on Friday, September 22, to reach a deal or expand the strike to more plants.
The union demands higher wages, better benefits, and more job security for its members. The automakers have rejected the UAW’s unsustainable proposals and offered lower raises and incentives.
The strike has also drawn political attention from both sides of the aisle. President Joe Biden has expressed his support for the striking workers and urged the companies to go further in their negotiations. Donald Trump is set to hold a rally in Detroit with autoworkers during the upcoming Republican primary debate.
The strike is the first time the UAW has walked out at all three automakers at once. It is also the longest strike since 2019 when the UAW staged a 40-day strike against General Motors.
The UAW says these demands are fair and necessary to improve its members’ living standards and working conditions. The automakers, however, say that these demands are unrealistic and unsustainable and have offered lower raises and incentives. The strike is expected to continue until a satisfactory agreement is reached.
The strike could also expand to Canada, where Unifor, the union representing Canadian autoworkers, prepares to strike against Ford on Monday night. Unifor President Lana Payne said the two sides are far apart, especially on financial issues.