For the first time since 2019, the United Auto Workers union has gone on strike after failing to reach a deal with the three Detroit-based automakers. This strike is different from every other strike of the past, though. Never before in the UAW’s 80-plus-year history has the union ordered a strike on all three major American automakers at the same time, but that’s exactly what is happening now. It’s also the first time that the union has chosen to directly target specific plants in order to “cause confusion” — in UAW President Shawn Fain’s words — at the three automakers’ headquarters.
“For the first time in our history we will strike all three of the Big Three,” Fain said.
At present, there’s no way of knowing how long this strike will last, or how many plants will be affected before it’s all said and done. So far, the walkout is being kept to a few select manufacturing plants, but Fain has indicated that the number of striking workers and the plants affected will escalate as negotiation drags on.
Surrealistically, the strike begins as the Detroit Auto Show opens to the public.
On Strike at the Big Three. Stand Up Strike.
— UAW (@UAW)
September 15, 2023
What plants are being targeted initially?
In a livestreamed video address Thursday night, two hours before the strike deadline, the union president described a strategy he termed a “stand-up strike.” He called on locals at three facilities to stand up and strike, one location per automaker. The targets are:
The strikes at those locations involve a combined 12,700 workers.
Fain vowed to walk the picket line at midnight with local members at Michigan Assembly. Workers at other plants will remain on the job in the meantime. Fain assured them that though the union contracts expired at midnight, those workers are still protected.
The strategy targets facilities that make popular and highly profitable models, but it initially could be considered something of a warning shot. Spared for now are facilities more central to automakers’ operations and bottom line, such as Ford’s River Rouge facility, which manufactures the F-150 and F-150 Lightning.
The strategy may well also serve to stretch the union’s strike fund, which is $825 million.
If a strike lingers, other units/facilities could be called into play, Fain said, perhaps expanding to a full strike across all three companies.
“This strategy will keep the companies guessing,” he said. “All options remain on the table.
“If we need to go all out, we will.”
Why did the UAW order a strike?
Put simply, negotiators for the UAW and their counterparts from Ford, General Motors and Stellantis (parent company of brands that include Chrysler, Dodge, Jeep and Ram) did not come to a satisfactory agreement ahead of 11:59 p.m. Thursday, September 14. That’s the day that the previous contract between the union and the automakers ended.
What is the UAW asking for?
Quite a bit. According to UAW President Fain, “Record profits mean record contracts.” According to the UAW, “Ford, General Motors and Stellantis made a combined $21 billion in profits in just the first six months of this year. That’s on top of the quarter-trillion dollars in North American profits that the Big Three made over the last decade.” The UAW calculates that if each of its 150,000 members received a $20,000 raise out of that $21 billion, the automakers would still have $18 billion of it left.
This isn’t an exhaustive list of everything on the bargaining table, but we’ll cover a few of the biggest items on UAW workers’ minds.
— PAY: The union believes its UAW members deserve a greater share of those profits than they currently receive. The UAW initially demanded a 36% wage increase over four years across the board for its nearly 150,000 members. Depending on seniority, UAW workers currently make between $18 and $32 per hour in basic wages, with additional money coming through negotiated overtime wages and profit sharing deals.
— TIERS: The UAW wants an end to the so-called tiered wage system that was introduced in 2007. Under that agreement, workers hired prior to the 2007 agreement were locked into a “Legacy” or “First Tier.” Workers hired after the agreement entered in at a reduced wage, sometimes called “Second Tier.” Further, temporary workers were allowed for certain work and limited durations, and these workers are sometimes considered a third, unnamed tier. Legacy workers generally earn more than Second Tier workers, and temporary workers generally earn the least and have far fewer protections than the other two tiers. Reducing tiers is also seen as a way to reintroduce many of the benefits lost after the 2007-era contract went into effect.
— COLAs: The UAW wants to reintroduce cost-of-living adjustments — generally shortened to COLA on picket signs and T-shirts — that it claims “made sure the working class thrived for decades.”
— WORKWEEK: The UAW says its workers are expected to work too many hours. “Our members are working 60, 70, even 80 hours a week just to make ends meet. That’s not living. It’s barely surviving and it needs to stop,” according to the UAW’s page on Big 3 negotiations. The union initially requested a 32-hour work week but wanted pay to remain at the 40-hour-per-week level.
— PENSION: Workers hired after 2007 receive a 401(k) account where automakers match 6.4% of worker contributions while workers hired before that year received pensions. The UAW wants to bring back defined pension benefits for all workers.
The UAW wants the automakers to increase the amount they pay retirees and also to re-establish retiree medical benefits.
— PLANT CLOSURES: The UAW also believes it should be allowed to strike over plant closures. “The Big Three have closed 65 plants over the last 20 years,” it says.
— EVs AND REPRESENTATION: A key consideration for the union is that it be allowed to represent workers at 10 electric vehicle battery factories, most of which are being built by joint ventures between automakers and South Korean battery makers. The union wants those plants to receive top UAW wages. In part that’s because workers who now make components for internal combustion engines will need a place to work as the industry transitions to EVs.
What have the Detroit 3 automakers offered?
The UAW is bargaining with all three automakers at the same time, an abnormal tactic. That means Ford, General Motors and Stellantis have all made various offers to UAW negotiators that don’t necessarily match in terms of concessions, wage increases or anything else.
According to statements from Ford, the Blue Oval has extended four offers to the UAW, the latest of which includes a 20% wage increase over four years. Ford’s offer is also said to include cost-of-living adjustments, an end of wage tiers (which the UAW seems to define differently than Ford), additional payments to retirement plans, improved healthcare benefits and more paid time off.
General Motors’ latest offer hasn’t been revealed in its entirety. However, UAW President Fain said on Wednesday that a prior offer included an 18% wage increase over four years and a reduction in the time it takes for workers to reach the top wage tier. Fain had called a previous offer from GM, made on September 7, “insulting.”
Stellantis made an offer on September 8 that the UAW called “deeply unfair.” Since then, second and third offers have reportedly been made, but none are said to be close to meeting the UAW’s demands. According to reports, the latest offer from Stellantis included a 17.5% pay increase over a roughly four-year period.
Ford said in a statement the UAW’s latest proposals would double its U.S. labor costs. A walkout could mean that UAW profit-sharing checks for this year will be “decimated,” the company said. GM and Stellantis declined to comment ahead of the midnight strike deadline.
A long UAW strike threatens to spread economic turmoil as suppliers and other industries that depend on automakers and their workers see demand dry up. The standoff has become a political issue with President Joe Biden, facing re-election next year, prominently calling for a deal.
A full strike would hit earnings by about $400 million to $500 million at each affected automaker per week of lost production, Deutsche Bank has estimated. Some of those losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months.
What happens now that the UAW is officially on strike?
We’re going to have to watch and see exactly how negotiations continue to play out. UAW President Fain said prior to the strike that no negotiations would take place on Friday, September 15, if an agreement was not in place before the deadline at the end of the 14th. We would expect negotiations to continue on Saturday in that case.
Assuming an agreed-upon deal is still far away, it seems likely the UAW will continue its strategy of targeting individual plants. Fain’s reference to this as a “stand-up” strike, is based on the past “sit-down” strikes the UAW was known for in its early days.
UAW members receive limited pay while they are striking and generally are either asked to be on the picket line in front of the targeted plants or instead perform community service assignments.
Contains Reuters and AP.