2023 United Auto Workers strike

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2023 United Auto Workers strike
Striking workers marching in Michigan in September 2023
DateSeptember 15, 2023 – present (2023-09-15 – present)
(1 month, 1 week and 4 days)
Location
United States
Caused byDisagreements over the terms of a new labor contract
Goals
  • Increased wages over four years to offset inflation
  • End to the tiered employment system
  • Improved overtime and retirement benefits
  • Improved worker protections against plant closures[1]
  • 32-hour work week[2]
Methods
Parties
Number
45,800 strikers
(as of Oct. 24)

The 2023 United Auto Workers strike is an ongoing labor strike involving automobile workers in the labor union United Auto Workers (UAW) and the three unionized automakers in the United States—Ford Motor Company, General Motors, and Stellantis. These three automakers' factories combined employ about 145,000 UAW members and produce about 50 percent of the vehicles manufactured annually in the US, accounting for 1.5 percent of US GDP.[3][4] The strike began on September 15, 2023, when the union was unable to reach a deal with the three automakers. It is the first trilateral strike against the three automakers in the union's history.

The hardline stance taken by the newly elected UAW president Shawn Fain contributed to the UAW's decision to strike. In particular, he has criticized stagnant wages that do not account for inflation and has called for the end of a tiered employment system that underpays newer employees, the restoration of overtime and retirement benefits that were lost as a result of the 2007–2008 financial crisis, the institution of a four-day workweek, and improved worker protections against plant closures as electric vehicle production increases.

A central concern for the automakers is the cost of labor relative to domestic and foreign non-union competitors, particularly as the industry transitions to electric vehicle manufacturing.[5] The automakers have stated that they anticipate the need to invest a significant portion of their profits from gasoline-powered vehicles into new production technology for electric vehicles.[6]

Background[edit]

United Auto Workers[edit]

Main article: United Auto Workers

The labor union United Auto Workers (UAW) represents approximately 145,000 automobile workers employed at Ford Motor Company, General Motors, and Stellantis.[7] To achieve its goals, UAW has engaged in strike action; from November 1945 to March 1946, UAW went on strike against General Motors. The 1945—1946 strike established a strategy, forged by then-UAW president Walter Reuther, to target efforts on a single company. Since the 1950s, UAW has faced declining union membership and a growing service sector, reducing the economic impact that a strike could have.[8] In 2019, UAW autoworkers went on strike against General Motors. The 40-day work stoppage cost General Motors US$3.6 billion and caused a single-quarter recession in Michigan.[9]

Contract negotiations[edit]

In March 2023, newly elected UAW president Shawn Fain stated that workers were "fed up with the status quo" and assured that he would negotiate for changes to workers' contracts. Fain called for cost of living adjustments to account for inflation ahead of the current contracts expiring on September 14 and asked for wage increases lost in the 2007–2008 financial crisis.[10] Members have expressed interest in both ending a two-tier wage system in which newer employees are paid significantly less than older employees, and domestic plant construction.[11] Fain continued his sentiments at the Automotive Press Association in April, expressing disappointment in the idling of the Belvidere Assembly Plant in Belvidere, Illinois.[12] Additionally, he lambasted wage decreases that workers at joint venture battery factories face compared to workers at older factories.[13]

By May 2023, the potential for a strike loomed over contract talks.[14] In an online appearance in June, Fain repeated his goals and criticized automobile manufacturers for increasing their profits without increasing wages.[15] Fain continued to leave strike action as a possible option leading up to contract negotiations.[16] Contract negotiations began on July 14.[17] Throughout negotiations, Fain has updated members online, including throwing one automaker's proposal in the trash on camera.[18] On August 15, Fain announced a strike vote;[19] it overwhelmingly passed on August 27 with 97 percent voting in favor.[20] UAW has asked for an immediate 20 percent raise and yearly gradual increases totaling an hourly pay increase of 46 percent, the restoration of traditional pension payment plans and retiree health care, a four-day workweek, job protections, and a beneficial transition to electric vehicles.[21] Fain has acknowledged the UAW demands are audacious but argues they are justified, pushing for the reversal of post-2007 wage cuts.[22]

Course of the strike[edit]

On September 14, Fain declared that the UAW would simultaneously strike against Ford Motor Company, General Motors, and Stellantis for the first time in the union's history. The initial strike was focused on the Michigan Assembly Plant in Wayne, Michigan, owned by Ford Motor Company; the Toledo Complex in Toledo, Ohio, owned by Stellantis; and Wentzville Assembly in Wentzville, Missouri, owned by General Motors.[23] Approximately 13,000 workers are going on strike as of September. The initially limited scope is intended by the union to stretch the strike fund.[24] The three plants were chosen for their profitability.[25][26]

General Motors net income and
Trailing 12 months net income
Ford Motors net income and
Trailing 12 months net income
Stellantis net income 2014 - 2020 and
Trailing 12 months net income

On September 19, Fain set a new deadline for contract talks. If by Friday, September 22, contract negotiations did not progress significantly, a new set of plants would join the strike.[27] This strategy has been dubbed by Fain a "stand-up" strike, where workers at additional plants will join the strike if talks do not progress.[28] This strategy has been referred to as a new form of rolling strike,[29] in which portions of a company or industry strike at different points, rather than striking all at once.[30][31] Typically, sections are targeted periodically, moving between workplaces without expanding.[30][31] In this case, the strike continually expanded from workplace to workplace.[29]

On September 22, strikes expanded with 5,600 workers walking out of 38 part-distribution plants operated by Stellantis and GM.[32] The strike did not include any Ford operated facilities, with Fain stating: “We’ve made some real progress at Ford. We ... want to recognize that Ford is showing that they are serious about reaching a deal. At GM and Stellantis, it's a different story.”[33] Fain also invited President Biden to show solidarity saying, "We invite and encourage everyone who supports our cause to join us on the picket line from our friends and families all the way up to the President of the United States."[34] Hours later, Biden announced his intent to visit Michigan on the 26th, "to join the picket line and stand in solidarity with the men and women of UAW as they fight for a fair share of the value they helped create".[35] The strike was expanded further to 7,000 additional workers on September 29: 4,600 at Ford's Chicago Assembly and 2,300 at GM's Lansing Delta Township Assembly.[36]

On October 11, an additional 8,700 UAW workers at Ford's Kentucky Truck Assembly walked off and joined the strike.[37]

On October 23, 6,800 additional workers walked out at Stellantis's Sterling Heights Assembly, with the UAW considering Stellantis's recent proposal the worst of the three automakers.[38] The next day, on October 24, roughly 5,000 workers at GM's Arlington Assembly joined the strike.[39]

On October 25, a tentative agreement with Ford was reached by the union. It reportedly includes an 11% wage increase in the first year, and total 25% increase over the 4.5 year contract, a $5,000 ratification bonus and COL adjustment according to those familiar with the deal, who spoke on conditions of anonymity. When including COL adjustments, total pay could be raised by 30%. Whether a 32-hour workweek was agreed to in the agreement is yet to be known. It has yet to have a ratification vote on it by its members.[40] The UAW released a brief informational on the key points of the Ford tentative agreement on October 25.[41]

Transition to electric vehicles and claims of competitiveness[edit]

Automakers claim that they need to transition to building electric vehicles to meet government regulations and to remain competitive, and that this transition will require re-investing billions of dollars of their profits.[42] Ford stated that for 2023 it would lose $4.5 billion dollars in its EV business.[6]

Foreign, legacy manufacturers and domestic manufacturers which produce only electric vehicles, such as Tesla, Rivian, and Lucid produce their vehicles with non-union workforce. Labor costs for EV-only Tesla are $45/hour. The second largest automaker, Toyota, has a labor cost of $55/hour.[3] The current UAW labor costs are $65/hour.[43] Wells Fargo estimates that the proposed contract by the UAW would raise the average labor cost to $136/hour.[44] Ford, GM, and Stellantis claim that the proposed UAW contract would prevent them from being competitive in the transition to EVs and competing against foreign automakers.[45]

In 2022, president Joe Biden's administration passed the Inflation Reduction Act, which included federal funding and tax incentives for domestic EV manufacturing. Ronald Brownstein of The Atlantic reported that union officials "worry that the companies are using the shift ... to simultaneously shift more of their operations from high-paying union jobs mostly in northern states to lower-paying, nonunion jobs mostly in southern states".[46] Fain asserts that, with the government incentives, "hundreds of billions of our taxpayer dollars ... are helping fund this, and workers cannot continue to be left behind in that equation".[47] The UAW seeks to mandate unionization of battery factories without a vote from factory employees.[48]

Reactions[edit]

Politicians[edit]

The strike poses a risk to president Joe Biden's commitment to electric vehicles; Biden is running for reelection. Biden's automotive industry liaison Gene Sperling stated that, while he remains committed to electric vehicles, Biden will ensure a "just transition" for union members.[49] On the day of the strike, Biden called for an amelioration with "record contracts" matching "record corporate profits".[50] On September 26, 2023, Joe Biden visited a UAW picket line, making him the first US president to visit one. He delivered comments supporting the striking workers.[51][52][53] Senator Bernie Sanders called on the CEOs of Ford Motor Company, General Motors, and Stellantis to "end [their] greed", addressing them by name.[54] Donald Trump criticized the Biden administration's electric car policy saying "UAW workers being sold down the river by the union in favor of green agenda".[55] Senator and 2024 presidential candidate Tim Scott compared the strikes to the 1981 strikes organized by the Professional Air Traffic Controllers Organization and praised former President Ronald Reagan's approach, stating: "He said, you strike, you're fired. Simple concept to me".[56] Fain later filed a complaint against Scott with the National Labor Relations Board on the grounds that, as the employer of campaign staff, his statements reflected a threat against his workers' right to strike and violated the National Labor Relations Act.[57]

On September 18, Trump's campaign announced that he would be giving a speech in Detroit, Michigan to striking union members at the same time as the second Republican presidential debate in California.[58] However, Fain pointed out that Trump's speech was being held at a non-union plant whose workers were not connected to the strike.[59]

Automakers[edit]

Ford CEO Jim Farley said that if the UAW proposal had been in effect since 2019, Ford would be bankrupt.[60] In response, Fain stated "The cost of labor for a vehicle is 5% ... They could double our wages and not raise the prices ... and they would still make billions of dollars. It's a lie like everything else that comes out of their mouths."[61]

Others[edit]

In an opinion article, Steven Rattner, who served on Barack Obama's Presidential Task Force on the Auto Industry during the government's restructuring of GM and Chrysler associated with their 2008 bankruptcies, stated that while he feels that the auto workers should get raises, they are asking for too much from an industry with thin profit margins that has stagnated relative to the growth of the overall economy.[62]

References[edit]

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  4. ^ Whalen, Jeanne (September 15, 2023). "How much do UAW workers make? What to know about today's strikes". The Washington Post. The stoppage threatens to destabilize an industry that makes up about 3 percent of the nation's gross domestic product.
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  62. ^ Rattner, Steven (September 20, 2023). "The United Auto Workers Is Overplaying Its Hand, Risking Our Economy and the Election". New York Times. Yes, profits at the Detroit Three are at record levels – $37 billion last year. But the auto industry usually operates at thin margins, and even though labor costs are a relatively small fraction of the companies' overall expenses, those profits can evaporate quickly. Financial markets are acutely aware of the large-scale challenges facing the Detroit companies. General Motors' stock price has been essentially flat since the company went public nearly 13 years ago, while the overall equity market has appreciated by 276 percent.
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