DemDaily: Biden Backs UAW

September 15, 2023

At midnight Thursday, the United Auto Workers went on strike against the country's "Big Three" automakers, threatening to close down production at General Motors, Ford and Stellantis, which builds vehicles under the Jeep, Ram, Dodge and Chrysler brands for North America.

The simultaneous, strategically targeted strikes are taking place in three assembly factories: a GM plant in Wentzville, Missouri; a Stellantis plant in Toledo, Ohio; and a Ford plant in Wayne, Michigan.

While just 13,000 of the collective 146,000 union members at the plants are on strike, ceasing or slowing production of a few engine or transmission plants at each company could be as disruptive at stopping operations as a full strike at all plants, as the parts are interdependent.

The stakes are high for the union, the automakers and the White House, with experts predicting a 10-day UAW strike could have an impact of over $5 billion in the US economy alone, with broader consequences globally.

The strike is taking place in the heart of the Upper Midwest which is essential to victory in the 2024 presidential election. A crucial factor is also job security, as union workers as the industry transitions to clean energy electric vehicles -- with Biden's strong support.

"Over generations auto workers have sacrificed so much to keep the industry alive and strong, especially through the economic crisis and the pandemic. Workers deserve a fair share of the benefits they helped create for an enterprise...Record corporate profits, which they have, should be shared by record contracts with the UAW." - President Joe Biden

Background
During the 2008 financial crisis and government bailout of the auto industry, the UAW made major concessions to help car companies get back on their feet -- concessions that have not been fully restored. Union members also made considerable sacrifices during COVID as essential workers.

Since 2019, when the UAW and The Big Three last entered contract negotiations, annual gross profits have risen by 34% at Ford and 50% at GM. Stellantis, which formed when Fiat Chrysler merged with Peugeot in 2021, grew its annual gross profit by 19% in its first year.

In the same period, the CEOs of the companies have each had salary increases of 30% to 40%. GM CEO Mary Barra, the highest-paid chief executive among the three, made nearly $29 million in 2022 -- 362 times the median GM employee's paycheck.

The Demands
The UAW is seeking a wage increase of up to 40%, with annual raises of 5% over the course of the next four-year contracts. UAW President Shawn Fain said the pay raise is in line with the salary increases of the Big 3 CEOs and makes up for decades of falling wages.

The demands include restoration of pension and retiree healthcare and cost of living adjustments, as well as 32-hour work weeks and an end to the use of temporary workers.

The Offer
Ford and GM are offering a 20% raise during the life of the contract and Stellantis is offering 17.5%.

Fain said automakers had rejected the pension, 32-hour work week and other benefit improvements, and criticized proposed changes to profit sharing that would cut payments to workers.

The three companies reportedly put cost of living protections on the table -- though the union says these offers wouldn't provide enough wage protection to keep up with inflation over the next four-and-a-half years.

The automakers claim the UAW's full demands in full would completely halt new production due to much higher labor costs than their international and non-union competitors, such as Tesla. "If we signed up for the UAW's requests, we would've lost $15 billion and gone bankrupt by now," said Ford CEO Jim Farley, adding the union's demands would create an unsustainable financial situation.

Fain said the union will hold off more costly company-wide strikes for now, but all options are open if new contracts are not signed. Negotiations are expected to resume Saturday.

“Never forget that when our labor isn’t valued, we have the power to withhold it. We have the fundamental power of a strike. The cost of a strike might be high, but the cost of doing nothing is much higher.” - UAW President Shawn Fain

DemList will keep you informed.

Related
DemDaily: Labor's Day 8/31/23
DemDaily: The Hollywood Revolution 7/19/23
DemDaily: Labor Backs Biden 6/20/23
DemDaily: Hollywood Rallies Around Writers Guild Strike 5/24/23
DemDaily: On Strike! 3/21/23
DemDaily: The Right to Strike 1/12/23

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Sources: CNN Business, NPR, NBC, SEC, Yahoo, AP, AFL-CIO, Reuters

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