Photo Source: Dodge
In an era of big profits and as the industry starts a costly transition from gas guzzlers to electric vehicles, about one in ten of America’s unionized auto employees went on strike on Friday. This was done to pressure Detroit’s three manufacturers into lifting pay.
The United Auto employees union is attempting to regain some of the income and benefits employees forfeited in recent decades by striking simultaneously at General Motors, Ford, and Chrysler owner Stellantis for the first time in its history.
Currently, just three assembly facilities are affected by the strikes: a GM plant in Wentzville, Missouri; a Ford plant in Wayne, Michigan, close to Detroit; and a Stellantis-run Jeep plant in Toledo, Ohio.
President Joe Biden offered his support to the workers, sending officials to Detroit to help break the deadlock and stating that the Big 3 automakers should split their “record profits.”
If the businesses don’t make better proposals, workers may walk out at further plants, according to union president Shawn Fain. The companies have responded with raises ranging from 17.5% to 20%, while the workers are asking for 36% overall compensation increases over the course of four years.
Although they noted that they were committed to the cause and admired Fain’s harsh tactics, the workers on the picket lines expressed their hope that the strikes wouldn’t go for too long.
Hoisington expressed her optimism that the strike would finish fast so she wouldn’t have to utilize her funds to pay for a home. I’m going to have to use my down payment on food, so I hope this doesn’t last too long, she added.
UAW had always dealt with one carmaker at a time during its 88 years of existence, minimizing the effects of potential work stoppages on the whole industry. Each agreement with a manufacturer was seen as a model for future contract negotiations, but it wasn’t a certainty.
Currently, 13,000 of the 146,000 employees at the three companies are on strike, complicating operations for the automakers while putting less strain on the $825 million strike fund for the union.
Costs would rise for both the workers and the businesses if the contract negotiations linger on and the strikes touch more plants. Dealer shortages could result in higher prices and a move toward non-unionized foreign automakers by buyers. Additionally, it can add new strain to an economy that has benefited from falling inflation.
Fain, the first head of the union to be chosen directly by members, is the creator of the new negotiation strategy. In the past, departing leaders chose their successors by selecting convention delegates.
However, that approach fostered a culture of fraud and bribery, which resulted in a federal probe and prison terms for two previous UAW presidents.
Last spring, the feisty Fain narrowly gained his position after waging a ferocious campaign against that mentality, which he dubbed “company unionism,” which he claimed sold out employees by allowing factory closures and failing to demand higher wages from the automakers.
Fain campaigned as an opponent of the companies rather than a business partner, saying, “We’ve been a one-party state for longer than I’ve been alive.”
It’s time for a new approach to negotiation, according to David Green, a former local union leader who was elected to a regional director position this year. According to Green, “the risks of not acting differently outweigh the risks of acting similarly and anticipating a different outcome.”
Green worked for General Motors for more than two decades. During that time, he witnessed the closure of a 3,000-person assembly factory in Lordstown, Ohio. In order to aid the companies through the Great Recession, the union accepted a number of concessions. Green noted that Fain’s approach was “refreshing,” noting that for the past 20 years, “we’ve done nothing but slide backward.”
Carlos Guajardo, who has worked for Ford for the past 35 years and GM for 11 years before that, expressed his approval of the new approach.
Guajardo, who was on the picket line in Michigan on Friday before dawn, said, “It keeps the strike fund lasting longer.”
The strikes will probably determine the union’s and America’s domestic auto industry’s future at a time when American labor is asserting its power and businesses are preparing to make a historic switch from producing internal combustion automobiles to electric vehicles.
The walkouts will also be a topic in the presidential election of the following year, putting to the test Biden’s assertion that he is the most union-friendly president in American history.
According to GM CEO Mary Barra, the limited-strike approach may have repercussions, she stated on CNBC on Friday.
According to Barra, numerous firms depend on one another for parts. “Yes, even one plant is going to start to have an impact,” the manufacturer said. “We’ve worked to have a very efficient manufacturing network.”
Even Fain has referred to the union’s demands as outrageous, but he asserts that because the automakers are making billions, they can afford to meet them. He laughs at company assertions that expensive settlements would make them increase vehicle pricing, claiming that labor only makes only 4% to 5% of the cost of a vehicle.
Along with wage increases, union negotiators are requesting, among other things: the restoration of cost-of-living pay raises; an end to different pay tiers for factory jobs; a 32-hour workweek with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who currently only receive 401(k)-style retirement plans; and pension increases for retirees.
Cost-of-living increases and defined benefit pensions for new personnel were abolished beginning in 2007. The UAW established wage tiers in an effort to assist businesses in avoiding financial difficulties both before and after the Great Recession. However, only Ford managed to escape bankruptcy.
Many claim that because businesses are making enormous profits and CEO compensation is rising, it is time to recoup the compromises.
The historically significant shift to electric vehicles is looming. To ensure that its members have employment producing the batteries for future vehicles, the union wants to guarantee that it represents workers at the joint-venture factories that the firms are constructing.
Workers at the highest levels of assembly plants make roughly $32 per hour, with significant yearly profit-sharing checks. According to Ford, the average yearly salary last year—including overtime and bonuses—was $78,000.
There are around 3,300 workers at the Ford facility that is on strike. About 5,800 people work at the Toledo Jeep facility, compared to 3,600 at the Wentzville plant for GM.
Full-size pickup trucks and large SUVs are the corporations’ main sources of revenue, but the union chose not to target them.
While developing and producing new electric vehicles while also producing gas-powered cars, SUVs, and trucks to pay the costs, automakers claim they are facing unprecedented demand. They are concerned that labor costs would increase to the point where they will have to charge more for their vehicles than those made by foreign automakers with U.S. plants.
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Terry is an avid Nascar fan who grew up attending races at Charlotte Motor Speedway in Concord, North Carolina, just down the road from his hometown of China Grove, NC. Terry currently resides in Wellington and has been writing for 15 years. He also enjoys watching the Road Runner Looney Tunes cartoon with his two sons in his spare time.