The Ford Revolution is on hold as the ‘Big Three’ Autoworkers Go on Strike: Why the Auto Workers are On Strike?
Brandon Szcesniak, a young union member who works at the Ford plant in Wayne, tells Labor Notes that people are angry. “It’s like a revolving door. A job is not a career anymore. They want us to buy Fords, but how do we do that?
Tesla operates its Fremont, California, factory with nonunion labor, as the UAW has struggled to find a toehold at the plant. The company is accused of violating labor laws by forbidding workers from discussing pay and working conditions. There have been many complaints against the company.
“Lets be clear: this is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success,” said Dan Ives of Wedbush. He added that the “clear winner was… Musk and Tesla with champagne now on ice.”
The Detroit Auto Workers’ First Strike: After a Million Dollars, the UAW Has Not Solved the Chicago Truck Strike
A production forecaster at AutoForecast Solutions said that the strike was symbolic rather than damaging. But not everyone was on the same page.
Notably, though, the facility that produces the top-selling Ford F-150 truck has not yet been targeted for a strike, nor has the UAW chosen to walk out on engine or other parts plants that may have a direct impact on a greater number of other facilities.
The UAW says that the three automotive companies have made a combined $21 billion in profits in the first six months of the year, and that the workers want their fair share.
It was a historical moment when workers at three companies went on strike at the same time, as the auto industry was about to make a huge switch to EVs.
Those plans have been put on hold due to workers demanding better retirement plans, stronger job security and a share of profits generated by SUVs and trucks.
For the first time in history, the UAW has gone on strike against all three Detroit auto companies at once, after failing to reach a deal with the companies on pay, pensions and other benefits.
Ford said there was little movement from the UAW’s previous proposal after it received a counterproposal hours before the current contract expired.
Ford said that the proposal would be more than double Ford’s current labor costs, which are already higher than the labor costs of foreign-owned auto companies in the United States.
GM CEO Mary Barra noted that the two sides were still far apart on key issues. “We still have a ways to go with the offer they put on the table last night,” Barra said on CBS This Morning on Friday.
What do the big three automakers (and their rivals) spend on labor costs and how they can negotiate with the consumer? A Research note from Ives
Analysts note that the Big Three spend roughly $64–$67 an hour on total labor costs, including benefits, while their nonunion rivals only spend around $55 an hour and Tesla spends $45–$50 an hour.
“The big issue for GM and Ford as well as investors is around if anywhere near a ~40% wage increase gets approved/agreed this will be a major headwind on the cost front and ultimately in some way be passed down to the consumer and thru EV prices,” he wrote in a research note. “The costs of EV vehicles out of Detroit is a major advantage going after mass adoption with any $3k, $5k, $7k, etc added to the slew of vehicles coming out would results in demand churn in our opinion.”
Ives, who is bullish on Tesla, predicted that a prolonged strike could push the Big Three automakers to agree to major increases in labor costs, which could then be passed along to the consumer.
He believes that he’s going to hold out. It’s not fair that these big companies don’t understand how much stress and pain we put on our body.
Coleman, who makes $19.76 an hour after five and a half years at the Stellantis plant in Toledo, says despite his initial disappointment in the size of the strike, he still has faith in Fain.
This is not a coincidence. These are vehicles that consumers want and need, and these are plants where the production volumes are high and efficient,” she says.
Jeep Wranglers and Gladiators are made at the plant. The striking Ford plant makes Ford Broncos and Rangers. The striking GM plant produces the Chevy Colorado, the GMC Canyon and two different vans, according to the UAW.
UAW Goes to Strike: Ford gm, Stellantis fain says it’ll ‘Play Hardball’
Workers out of work won’t be getting paychecks. They will get $500 a week for every week they are on strike. In total, that will replace less than 40% of their lost wages. That will likely mean reduced spending in communities where striking workers live.
“I really trust Shawn Fain right now, and I think that he’s got a good plan. I don’t think he’s just doing it off the seat of his pants,” said Kyle Bendert, who works on the engine line at the Ford plant in Wayne, Mich.
There was a shared sense of excitement on Friday with crowds cheering and chanting, drivers holsing in support, and a heckler shouting at people to get back to work.
As someone who has followed labor movements for many years, Block was very interested in the decision to only strike one plant at a time.
Sharon Block is an executive director of Harvard Law’s Center for Labor and a Just Economy.
The UAW tried to allay those fears, putting out a video ahead of the strike explaining that most of the contract terms remain in effect, including that management still has to bargain with the union over any changes to wages, hours or working conditions.
“This is going to create confusion for the companies,” Fain told union members earlier this week. “It’s going to keep them guessing on what might happen next, and it’s going to turbocharge the power of our negotiators to be as effective as possible.”
“Honestly, I think he was soft,” he said of Fain. He should have told the facilities that this was serious to get back what we’ve lost.
Jerry Coleman, a long-time temporary employee working 70 hours a week at the Stellantis Jeep plant in Toledo, Ohio, has welcomed Fain’s tough rhetoric.
Source: As UAW strike begins, autoworkers want to ‘play hardball’
The UAW Strike Could Have An Economic Impact on the Consumer Price and Next-Generation Growth: The Case for Automakers of the Big Three
Autoworkers’ emotions — from excitement to fear and apprehension — are running high as their union, the United Auto Workers, launches an unprecedented strike against the Big Three automakers.
The UAW has built up a strike fund of $835 million — enough to last about three months if all of the nearly 150,000 unionized autoworkers were on strike. The union will also pay for striking workers’ health insurance.
More cars are on dealers’ lots now than there were a year ago, when supplies were still severely limited by the COVID-19 pandemic and a shortage of computer chips.
Ford has a lot of cars on hand that can last two months. GM’s inventory is a bit smaller than that of Stellantis. It won’t last indefinitely and there is a cushion.
New-car prices rose 0.3% in August after four months of flat or falling prices. If the strike causes a loss of production, it will be more of a concern for the market than the fact that nonunion carmakers will keep cranking out cars.
“This is a small impact, but meaningful,” says Zandi, “particularly in the context of other headwinds to growth in coming months, including higher oil prices, higher mortgage rates, the end of the student loan payment moratorium and a potential government shutdown.”
Source: How the UAW strike could have ripple effects across the economy
Why do autoworkers feel threatened to go out on dinner? An economist’s study of the machinists strike in South Carolina
Although there were threats to strikes last year, the auto industry is not as large as other industries like freight railroads or delivery giantUPS.
The longer the strike drags on, though, the more it could reshape the industry’s future. The walkout comes at a time when autoworkers are already nervous about the massive transition to electric vehicles, which require fewer people to produce.
Boeing shifted some aircraft production to a new plant in South Carolina due to the lengthy machinists strike in 2008.
University of Michigan economist Gabriel Ehrlich suggests that you skip out on dinner. People say that they are ready for a strike. You can’t do much to save up for a strike. The $500 a week helps. But it’s not making up for a full paycheck.”
Trade-Offs at Ford Motors and Fairfax – A Strategic Attack on General Motors–UAW Interactions and Trade-offs
Ford sent home about 600 workers at its Michigan plant on Friday because of strike-related production issues. Citing similar reasons, General Motors has also warned that 2,000 workers at its Fairfax assembly plant in Kansas are expected to be out of work by early next week.
Some companies will give partial pay to their non-striking workers when the factory is out of commission. There will be no such compensation because Ford and General GM are both owned by Ford.
The temporary layoffs are a strategic attack on the negotiations, according to the President of the UAW.
“Let us be clear, if the Big Three decided to lay people off who aren’t on strike, that’s them trying to put the squeeze on our members to settle for less”, he said.
600 workers at Ford’s Michigan Assembly Plant were told not to work on Friday due to the components they produce requiring e- coating. According to Ford, e-coating is a protection measure completed by the facility’s paint department, which went on strike.
The Fairfax assembly plant in Kansas was having a negative ripple effect due to the strike at the other plant in Missouri.
“This problem is due to a shortage of critical stamps supplied by Wentzville’s stamping operations to Fairfax,” General GM said. There is an expired agreement at Fairfax. Unfortunately, there are no provisions that allow for company-provided SUB-pay in this circumstance.”
They don’t have to lay off a single employee because of their record profits. He said in a statement that they could double every autoworker’s pay, not raise car prices, and still rake in billions of dollars.