DETROIT – With UAW leadership and the Big Three Detroit automakers apparently at odds amid ongoing contract talks, the question of a strike -- or multiple -- lingers in the air over Metro Detroit and beyond.
Newly elected UAW President Shawn Fain has set high expectations in what has become an unusual negotiation season, making a strike seem likely this fall. Fain says he worked with union members to craft a long list of demands for the new contracts, which seem to be met with pushback from the automakers.
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The UAW is requesting 40% general pay raises over four years, an end to wage tiers, restoration of pensions for new hires, cost-of-living increases, and more benefits. Fain claims auto workers are being exploited and unfairly compensated for their work, declaring the Big Three automakers’ “record profits deserve record contracts” for UAW members.
But Fain said earlier this month that talks had not yet gotten to wages and other economic issues -- and the Sept. 14 contract deadline is quickly approaching. If Fain’s plan to “bargain like hell” doesn’t wind up working, the union is preparing to strike for the first time since 2019.
Local UAW offices began voting on strike authorization over the weekend, which -- if approved -- would allow leaders to call a strike if they deem it necessary. Strike authorization votes are routine during contract talks, and are typically overwhelmingly approved, but they don’t necessarily mean a strike is imminent; just possible.
Fain has asked all local offices to have strike authorization votes in and counted by Thursday, Aug. 24 -- three weeks from the contract deadline.
UPDATE: UAW: 97% of auto workers vote to authorize strike as contract deadline looms
“If we want to make progress at the bargaining table, we need to show the companies that it’s not just talk,” Fain said.
Experts say that because Fain has been so unwilling to back down on what he says are his members’ demands, he will likely have to initiate a strike -- but it’s unknown which of the Big Three will be targeted. Unlike in the past, Fain has not identified a target among the automakers that would see a strike, or perhaps be the first to see a strike.
The new UAW president has been most outspoken against Stellantis throughout the negotiations, particularly citing the company’s higher profit margins. But during a rally over the weekend, Fain said, in part, they “purposely haven’t picked a target, because all three companies need to understand that they need to bargain at the same damn time.”
---> UAW holds ‘practice picket’ outside Detroit auto plant ahead of potential strike
What a strike might look like
A strike is a tactic used by workers trying to push their employers to comply with demands. Should the UAW decide to strike, the workers and the companies would be impacted.
There are just under 150,000 auto workers represented by the UAW today. The union has about $825 million in its strike fund, so those on the picket line would get about $500 per week during a strike. This weekly pay would be a pay cut for most employees, though it’s a larger amount than what was provided during the 2019 General Motors strike.
However, experts say those funds could run out quickly depending on how many workers are striking at one time. The UAW could choose to strike at one, two, or all three of the Detroit automakers at once -- though some industry experts believe it’s unlikely that workers will strike at all three.
When auto workers went on strike for six weeks at GM in 2019, the company reportedly lost $2 billion. The Anderson Economic Group, an economic consultancy firm, told the Automotive Press Association that GM never made up that loss.
Note: Both GM and Ford are clients of the consultancy firm.
When crunching the numbers for a potential strike in 2023, Anderson Economic Group found that if workers strike for 10 days at Ford only, for example, that company would lose $325 million in earnings. About $341 million in direct wages would be lost.
If members strike at all three automakers at once, the firm estimates a combined total loss of $989 million in earnings for the companies in a 10-day period. An estimated $856 million in direct wages would be lost.
Those numbers may sound high, but that’s the point of a strike: for it to be costly for the employers.
In comparison, the UAW calculates that the Big Three made a combined total of $21 billion in profit in the first half of 2023. President Fain also said the companies made a combined $250 billion in American profits in the last 10 years.
In addition to impacting the Big Three, experts argue a strike would have a ripple effect throughout the supply chain.
Jeff Rightmer, who teaches global supply chain management at Wayne State University, told Local 4 that if the strike lasts six weeks like the one in 2019, then the lower levels of the supply chain will likely be affected. While the bigger, stronger tier one suppliers would be able to “hold on longer,” he predicts that tier two and tier three suppliers, some of which are small businesses, would have to close their doors if the strike lasts a while.
Businesses like bars and restaurants that are near striking workplaces could also be affected, Rightmer said.
Auto dealers may also take a hit from a halt in production amid a strike. Already low dealership inventories could drop even lower, meaning dealers would likely run out of product at a rapid pace.
What exactly is the UAW demanding?
In addition to seeking better pay, the union has expressed its desire for a better work-life balance for employees, and job security amid the massive investment in electric vehicles. Workers are particularly concerned about what EV production means for their future, since the vehicles require less people to make them -- though those workers require more thorough training.
Here are the UAW’s demands, from the union’s website:
- Eliminate wage tiers.
- Secure substantial wage increases.
- Restore Cost of Living Adjustments (COLA).
- Defined benefit pension for all workers.
- Re-establish retiree medical benefits:
- Establish the right to strike over plant closures.
- Establish a job bank known as the working family protection program.
- Make all temporary workers permanent employees, and put strict limits on the future of temps.
- More paid time off to be with families.
- Significantly increase retiree pay.
As the quadrennial negotiations are underway, the Big Three say they face billions of dollars in developmental costs as they shift to prioritizing electric vehicles. In a statement from GM earlier this month, the company said it’s working in good faith to get the right agreement for all of its stakeholders.