The “stand-up strike” of the UAW in automakers: Why does the Big 3 get better, why does it have a better deal?
Some in the auto industry are wondering if the militant tone of the UAW would make it hard to get any initial deal done this year. Workers might think they could get better terms after striking even if a decent offer is on the table.
In a Facebook Live event on Wednesday night, UAW president Shawn Fain put up a chart comparing Big 3 profits – up 65% over four years – to autoworker pay, which increased just 6%.
He said while what the automakers are offering in response to union demands has improved, it still doesn’t reflect the sacrifices of the autoworkers that made the companies’ success possible.
“They could double our wages and not raise car prices and still make billions of dollars in profit,” he said. They want the Americans to think the autoworkers are the problem. We’re not the problem. … Corporate greed is the problem. And come tomorrow night, if they force us, we’re about to make it the Big Three’s problem.”
The UAW decided to go ahead with its planned strike. Workers at three plants — GM’s Wentzville, Missouri, assembly, Stellantis’ Toledo, Ohio, assembly complex, and Ford’s Wayne, Michigan, assembly plant — were the first to go on strike. The UAW will not hold off on a more expensive national strike if contract negotiations don’t improve, according to the union president.
If they weren’t able to make satisfactory offers, it would strike them all at once. For a process that is often shrouded in secrecy, the union provides regular updates about what both sides have offered.
Now the union has outlined a strike plan that would be as unusual as the talks. “We’re inventing a whole new way to strike,” Fain said in his Wednesday live-stream. He called it the “stand-up strike,” a reference to the “sit-down strikes” of 1937.
The First Three Months of Work at the Detroit Auto Show: GM’s Wage Rate Negotiation Without a Proposal from the Union
The CEO of Ford, with clear frustration, said that the company presented four increasingly generous offers without a proposal from the union.
Farley told reporters at the Detroit auto show that he had first found out about the latest offer on Facebook Live. “We’re here. We’re ready to work out a deal. But it’s sure hard to negotiate a contract when there’s no one to negotiate with.”
“We want to make a deal,” he said. “If there is a strike, it won’t be because we didn’t put a great deal in front of them, because we have – four times.”
In statements on Wednesday, GM simply said it was continuing to bargain “directly and in good faith” with the union. But Stellantis said it was still waiting on a counter proposal to the offer it made on Tuesday.
After months of contentious negotiations that led 340,000 UPS workers to the brink of a strike, the Teamsters union in July secured a 48% average total wage increase, over the course of the five-year contract, for existing part-time workers. Teamsters general president Sean O’Brien said the contract “sets a new standard in the labor movement.”
But the union notes that all three automakers have pulled in record profits in recent years — a combined $21 billion in just the first six months of 2023, according to UAW — and the workers now want their fair share.
The companies are agreeing to make Juneteenth a holiday, and Ford has offered 2 weeks of parental leave, but otherwise, there has been no major movement on paid time off.
The union decided to accept a deal that would have allowed new hires lower pay than its current members during difficult negotiations with the auto companies. There was resentment and anger within the union because of the two-tier system.
Back then, a “second-tier’ employee would never earn as much as a “first-tier” one. But that did not stay the same in 2019. It is now possible for a new hire to work their way up to the same pay as their colleagues over the course of eight years.
Are Pensions and Benefits for Retirement Workers Too Cheap? The Case of the Wayne Auto Workers Against a No-Wavepay Program
On pensions and benefits for retired workers, the companies have not budged. Automakers say pensions and retirement benefits are simply too expensive; they also make the case that some workers prefer 401(k)s to pensions, because they can be taken with you if you change jobs. The guaranteed payments of a pension is what the union would prefer.
Job security guarantees that would keep workers from being laid off if a plant is shut down is being pushed by the union. That has not gotten much traction. A similar program to pay workers not to work was an infamous burden on automakers up until the late 2000s, and hurt the public reputation of the union.
Brandon Szcesniak, a union member who works at the Ford plant in Wayne, told Labor Notes that people are angry. It is like a revolving door. It is now a job and not a career. They want us to buy Fords, but how can we buy a Ford on this pay?”
The UAW is struggling to find suitable labor at the factory, which is operated by a company with nonunion labor. The company was accused of violating labor law by the National Labor Relations Board for not allowing workers to discuss their pay and working conditions. And there have been many OSHA (Occupational Safety and Health Administration) complaints filed against Tesla over the years.
“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… They are on ice.
The Big Three Automakers Are on the Way to Make a Move: GM, Ford, and the Ives Phenomenon
Sam Fiorani, an auto forecaster at AutoForecast Solutions, said that the strike was more of a symbolic strike than a damaging one. But not everyone was in agreement.
Analysts were split on the economic impact of the strike, with some calling it symbolic and others devastating. Ford Bronco, the Jeep Wrangler, and the Chevy Colorado pickup are some of the most profitable models produced by the struck plants.
The first time in history that workers at all three companies went on strike at the same time, it occurred as the automakers were about to make a huge switch to electric vehicles.
Those plans are on hold as Ford, General GM, and other workers demand a share of the profits from their vehicles as well as better retirement plans.
Ford said it got a counterproposal from the union hours before the current contract expired but said there was “little movement” from the UAW’s previous proposal.
“If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor,” Ford said in a statement.
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.
Analysts say that Big Three spend around $65 an hour on total labor costs, which include benefits, compared with $55 an hour for their non union rivals and less than $50 an hour for upstarts such asTesla.
If a 40% wage increase is approved, this will be a major roadblock for GM and Ford as well as investors, he wrote in a research note. Demand would be affected if the cost of EV vehicles in Detroit went up and mass adoption took off.
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.
Pay Increases for Airline Pilots and Teamsters at the U.S. Airlines: Why Auto Workers are Asking for a 40% Pay Ranch?
In August, the Allied Pilots Association, which represents 15,000 American Airlines pilots, succeeded in getting the airlines to increase pilots’ pay by more than 46% over four years with an immediate pay raise.
Tajer said that it’s been a long time since there was a financial gain. “This may be a four-year deal, but nothing’s happened since January 2019 in pay.”
The trend seems to be holding up. An average first-year pay raise of 7% has been the highest in a single quarter since at least 2007, according to wage data from the first quarter of the new labor contracts.
The Teamsters union pushed for higher wages for rank-and-file union members as they highlighted the profits of shipping giant U.S. Parcels. The package delivery giant earned more than $13 billion in the year 2000.
“I got paid $8 an hour in 1991,” Hancock told NPR, referring to what she earned when she was first hired at UPS. “A part-timer now would need to make in the ballpark of $25 to have the same buying power.”
Bargaining power for UPS employees and pilots at major airlines stems from the fact that they’re not replaceable, Katz said. The skills of the pilots can not be easily replaced, despite the fact that the company raises workers’ pay and benefits.
Source: Why you shouldn’t be surprised that auto workers are asking for a 40% pay raise
The United Auto Workers’ Collective Strike for Better Pay: Why you shouldn’t surprise that auto workers are asking for a 40% pay raise?
There are cases where capital is not mobile and it can’t move to the non-union South and operate as many companies as possible. It can’t move abroad and outsource production to foreign sources of supply,” Katz said. “So that’s part of their special circumstance.”
Katz said autoworkers on assembly lines can’t be easily replaced either, and they have some leverage from solidarity within their union’s ranks. But he said these workers face greater threats from competition in the automotive industry, including from factories with non-unionized workforces operating in the American South, which undercuts UAW’s bargaining power.
The UAW will successfully win a “solid wage increase” that is aligned with the 3% base pay increase as well as a cost of living adjustment, which the union has won in negotiations up until the 1980s.
“We’re at a stage where worker power is more than it was in the last 20 and30 years, but it’s not a revolution,” she said. “Management still has many things that they can do to get their way.”
The union and its leaders are determined to use this moment to get a better distribution of profits, even though there are losses caused by inflation.
Ford, General Motors and Stellantis have all raised their pay raise proposals since their opening bids – but to no more than 20%, just half of the union’s 40% ask, Fain said during a Facebook Live on Wednesday.
The summer of 2012 saw a wave of labor unrest and it shows that workers are prepared to go on strike if companies don’t meet their demands. So far this year, hundreds of thousands of workers have participated in at least 250 strikes, according to data from the Cornell University School of Industrial and Labor Relations.
In Los Angeles, Hollywood actors and writers have been on strike for months. Thousands of the city’s hotel employees have also been staging rolling strikes since early July, in large part to fight for better pay.
Source: Why you shouldn’t be surprised that auto workers are asking for a 40% pay raise
Fain’s Theorem: A Call for Action against Wall Street Crime and Other Inflatons in the U.S.
“We do not yet have offers on the table that reflect the sacrifice and contributions our members have made to these companies,” Fain told union members on Wednesday. We’ll probably have to take action to win.
Pedraza said the price of food and gas are going up, along with mortgage interest rates. A lot of people have stopped having a safety net.