DETROIT – The threat of a strike continues to feel more likely as the United Auto Workers union and Detroit’s Big Three remain at odds with only 10 days until their contract deadline.
New UAW President Shawn Fain said Thursday, Aug. 31 that the union delivered its economic demands to General Motors, Stellantis and Ford Motor Company more than four weeks ago, but have only heard back from Ford so far. Fain said complaints have been filed against GM and Stellantis, accusing them both of failing to respond to union demands amid this year’s contract negotiations.
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Last month, Fain -- who frequently shares negotiation updates with his members -- said the quadrennial talks were moving slowly and making little progress. With the Sept. 14 contract deadline even closer now, Fain is accusing the Big Three automakers of purposely delaying the process and breaking the law.
According to Fain, neither GM nor Stellantis have provided any counter offers or contract proposals after receiving the union’s demands. In an effort to initiate action, Fain said the UAW on Thursday, Aug. 31, filed unfair labor practice charges against GM and Stellantis with the National Labor Relations Board.
“GM and Stellantis’ willful refusal to bargain in good faith is not only insulting and counterproductive, it’s also illegal,” Fain said in a Facebook Live update.
Spokespeople from both GM and Stellantis said the complaints made against them to the NLRB are surprising and without merit. See their full statements down below.
The UAW has heard back from Ford, Fain said, though he made it clear that the union is not at all satisfied with Ford’s counter proposal.
Instead of the 46% wage increase requested by the UAW, Ford offered a 9% general wage increase with an “overall cut in real wages due to inflation,” Fain said. Ford also reportedly rejected other UAW demands such as eliminating wage tiers, providing cost of living adjustments, and putting a cap on the use of temporary workers.
“Ford’s wage proposals not only fail to meet our needs, it insults our very worth,” Fain said last week.
Despite the apparent conflict aired by Fain, the new president has maintained that the union’s goal is not to strike this fall. Offering a glimmer of hope from the union side, Fain said last week that he believes it’s still possible to reach a deal and avoid a strike, but “only if both parties show up, ready to bargain.”
Though a strike may not be the union’s goal, it is certainly a possibility: 97% of UAW auto workers voted in favor of strike authorization, officials said last week. If a strike is called, it’s unknown which of the Big Three will be targeted, or at least targeted first. Unlike in previous years, Fain has not announced a target among the three for a potential strike.
The UAW could strike against one or all of the Big Three -- though some experts say a simultaneous strike against Ford, GM and Stellantis isn’t too likely.
With Fain at the helm after the union’s first-ever direct leadership election, the union is taking a more aggressive approach to secure better pay and working conditions amid ongoing inflation and concerns over job security as electric vehicles take center stage. The union leader claims all three automakers have made record profits in the last few years, and that those profits have not translated to sufficient pay or benefits for auto workers.
Statements from the automakers
GM statement:
“We are surprised by and strongly refute the NLRB charge filed by the International UAW. We believe it has no merit and is an insult to the bargaining committees. We have been hyper-focused on negotiating directly and in good faith with the UAW and are making progress. The pace of negotiations is based on how quickly both parties resolve nearly 1,000 UAW demands, including more than 90 presented this week. Our goal remains the same - to achieve an agreement without a disruption that rewards our team members and protects the future of the entire GM team.”
Gerald Johnson, GM Executive Vice President, Global Manufacturing
Stellantis statement:
“Stellantis has not received the filing, but is shocked by Mr. Fain’s claims that we have not bargained in good faith. This is a claim with no basis in fact, and we are disappointed to learn that Mr. Fain is more focused on filing frivolous legal charges than on actual bargaining. We will vigorously defend this charge when the time comes, but right now we are more focused on continuing to bargain in good faith for a new agreement. We will not allow Mr. Fain’s tactics to distract us from that important work to secure the future for our employees.”
Jodi Tinson, Stellantis Corporate Communications, Media Relations and Content
Ford statement:
“Ford employs the most UAW workers and is the most American automaker in terms of vehicles assembled and vehicles exported from the U.S. We have made these choices because we believe in American workers, in our partnership with the UAW and in enriching American communities.
Ford has exceeded its commitments to add jobs and invest during the last three contracts, most recently creating or retaining 5,600 additional UAW-represented jobs beyond the 8,500 we committed and investing $1.4 billion beyond the $6 billion we committed during the 2019 contract.
After extensive negotiations, Ford has presented a generous offer on the upcoming contract that would provide our hourly employees with 15% guaranteed combined wage increases and lump sums, and improved benefits over the life of the contract.
Wages (including overtime) and lump sum bonuses for Ford’s UAW-represented hourly workers would increase from $78,000 on average in 2022 to $92,000 in the first year of the contract.
On top of $92,000 in wages and bonuses, workers would receive health care coverage worth $17,500 and other benefits worth an additional $20,500 in the first year. Health care for permanent UAW-represented hourly employees would continue to rank in the top 1% of all employer-sponsored medical plans for lowest employee cost sharing.
Full-time permanent Ford employees at the top wage rate could be paid $98,000 – from wages, cost-of-living adjustment bonus, ratification bonus, profit sharing and overtime – in the first year alone.
Overall, this offer is significantly better than what we estimate workers earn at Tesla and foreign automakers operating in the U.S.
This would be an important deal for our workers, and it would allow for the continuation of Ford’s unique position as the most American automaker – and give us the flexibility we need within our manufacturing footprint to respond to customer demand as the industry transforms. This offer would also allow Ford to compete, invest in new products, grow and share that future success with our employees through profit sharing.
We are committed to creating opportunity for every UAW worker to build a great career at Ford and to become a full-time permanent Ford employee with the good middle-class wages and benefits that come with it. Our offer fully eliminates wage tiers so all employees can achieve industry-leading wages, accelerates the grow-in period to reach the top wage rate by 25%, delivers a 20% raise for temporary employees and extends to temporary employees the same ratification bonus that permanent employees receive. Only 2% to 3% of Ford’s hourly workforce are temporary employees, by far the lowest among the Big 3.
But we will not make a deal that endangers our ability to invest, grow and share profits with our employees. That would mortgage our future and would be harmful to everyone with a stake in Ford, including our valued UAW workers.
Bottom line, we believe there is a path to succeed together in what is the most competitive and fast-changing era in the history of the American auto industry. Please see details below.”
Ford President, CEO Jim Farley
What a UAW 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.
UAW demands
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.