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UAW Strike Against Big Three Automakers

UAW Strike Bold Move

UAW strike is currently underway among the vehicle manufacturers of Detroit. For the first time, the United Auto Workers Union, after failing to reach a new contract deal by the 11:59 PM deadline, is striking collectively against all three major vehicle manufacturers. This strike was initiated on Thursday.

Limited Union Participation

However, the strike will not include nearly 150,000 union members who work at the three vehicle manufacturers and are collectively leaving their jobs.

Midwest Auto Plants Affected

Instead, employees of the three Midwest auto plants – the General Motors assembly plant in Wentzville, Missouri, the Stellantis assembly plant in Toledo, Ohio, and the Ford plant in Wayne, Michigan – were the first to walk out. This is part of UAW President Sean Finn’s “Stand Up Strike” strategy.

Implications of Limited Participation

For now, this means that only less than 13,000 employees are participating in the strike – less than 9% of UAW membership across the three companies.

Negotiations and Company Pressure

Additional sites could join on short notice, depending on how negotiations progress with the companies – a strategy aimed at increasing pressure on companies to anticipate how their operations might be affected.

Finn’s Perspective

Speaking to UAW members in a Facebook live event on Thursday night, Finn stated, “This is a defining moment for our generation.” “It’s about money, it’s about doing what’s right, and the world is watching.”

Departure from Traditional Tactics

The targeted strikes by UAW deviate from the traditional strategy, which typically involves laying off all union members of a single company at once.

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Unified Approach

UAW, under Finn’s leadership, has opted for simultaneous negotiations with all three vehicle manufacturers. Previously, UAW had selected a single manufacturer for negotiations, focusing on that company’s actions until a deal was reached – then encouraging the other two members of the Big Three to follow suit.

Resistance to Collective Departure

However, Finn ultimately did not reject the idea of all union workers of the Big Three automakers leaving their jobs together.

Conflict Perspective

Finn, elected as UAW’s first democratically elected leader, has adopted a more confrontational approach compared to his predecessors – including dramatizations of tossing Big Three automaker proposals into a garbage can.

Economic Demands

He has consistently reiterated the union’s main economic demands – including a 40% increase in wages, stating that this wage increase will be commensurate with CEO salary hikes, pension restoration, and the cost-of-living adjustment.

Appeal for Fair Share

Finn told UAW members on Wednesday, “The Big Three can afford to give us our fair share.”

Past Efforts and Current Discontent

Previous UAW leaders have summoned top executives of the automakers to discuss concessions in negotiations, stating that they did not consider the interests of the 150,000 UAW members working in these companies.

Legacy of the 2008 Financial Crisis

During the 2008 financial crisis, UAW offered substantial concessions to assist auto companies in their recovery.

Continued Impact of Concessions

Workers still feel the effects of those concessions – a major talking point in this year’s negotiations.

Contention over Wage Disparity

Under Finn’s leadership, UAW has also pushed for wage disparities between top executives and rank-and-file union members at the automakers, alongside the profitability of the automakers in recent years.

Potential Impact on the Economy

Collectively, the Big Three automakers have seen an increase in profits during the pandemic, as shortages of parts led to higher car prices, boosting companies’ profit margins.

Electric Vehicle Transition

The conversation in negotiations also revolves around the transition to electric vehicles in the auto industry. UAW is advocating for worker safety as companies rapidly invest in their EV production, raising concerns about what this could mean for traditional auto jobs.

Long-Term Strike Implications

A prolonged strike poses a potential risk to the American economy. In a scenario where nearly 150,000 UAW auto union members were to strike for six weeks, the economy could see an estimated 0.2% reduction in total domestic product in the fourth quarter.

Beyond the Strike: Economic Challenges

Strikes could compound other adversarial factors for America, including rising gas prices and the expiration of student loan forbearance.

Automakers’ Frustration

All three automakers have improved their initial wage proposals, with increases ranging from 9 to 20% in the latest offers. The union argues that these proposals do not sufficiently address stable wages over the years.

Companies’ Perspective on Negotiations

However, companies argue they have made genuine efforts to reach agreements. General Motors attempted to confront the strike on Thursday afternoon with a down-to-the-wire offer, described by CEO Mary Barra as a “compelling and unprecedented economic package.”

Barra’s Statement

Regarding GM’s latest proposal, Barra stated in a release, “Despite UAW leadership’s sharp rhetoric, what we have offered you is most important for you: an agreement that will increase wages by 20% during the term of the contract.”

Ensuring Wage Security

All three companies have also kept the cost of living adjustment on the table for job security – though the union contends these offers will not provide sufficient wage security to address potential inflation over the next four and a half years.

The Ford Dilemma: Balancing Demands and Production Costs

Ford’s recent encounter with labor strikes highlights a crucial issue. The company’s leaders warned reporters on Thursday that complying with the demands of the United Auto Workers (UAW) may significantly raise manufacturing costs, even to the point where expansion of manufacturing would be completely halted.

Jim Farley, the CEO of Ford, stated to CNBC, “If we had acquiesced to BMW’s requests… we would have incurred a staggering 15 billion-dollar loss by now, pushing us to the brink of bankruptcy.” Farley emphasized that finding a sustainable middle ground remains elusive.

Negotiations in the Balance

Members of the UAW still face the challenge of affirming any deal struck between union representatives and automotive manufacturers. Employees hold the option to exert additional pressure by sending their leaders back to the negotiating table.

Escalating Labor Disputes

According to statistics from the Cornell University School of Industrial and Labor Relations, the current UAW walkout marks the 17th strike in the United States this year, involving over 2,000 employees. Other unions have issued similar threats, with some resulting in tangible benefits for the workers.

Following months of contentious negotiations, which saw 340,000 UPS employees on the brink of a strike in July, the Teamsters Union secured an average wage increase of 48% over five years for current part-time workers.

Aviation Industry Takes Flight

In August, the Allied Pilots Association, representing 15,000 American Airlines pilots, successfully applied pressure on the airline for a wage increase of over 46% in four years.

However, labor experts suggest that achieving such significant wage hikes may not be feasible for UPS workers and pilots alike.

Evolving Automotive Landscape

Once dominant, the Big Three automakers have seen their prominence wane. Today, the market is saturated with foreign manufacturers like Toyota and Volkswagen, who remain unaffected by strike threats and can maintain steady production.

Professor Harry Katz, an expert in collective bargaining at Cornell University, noted, “They lack the exceptional leverage as there’s intense competition.” He alluded to the capacity of automotive manufacturers to relocate production to non-unionized southern or foreign locations.

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