The UAW strike at Ford, GM, and Stellantis could change the entire automotive industry forever
Nora Naughton,Alexa St. John
Updated Thu, September 21, 2023
For the first time in its 88-year history, the UAW is on strike at all three of the Detroit companies at once.
A lot is on the line for the UAW
The UAW has been rattled by declining membership and a yearslong criminal probe that sent several of its prominent leaders to prison. The union has also lost a lot of influence in the industry, failing over the last several years to organize outside of the Detroit 3, with one of its more bitter losses being Tesla.
Despite those challenges, one of America's oldest and most well-known unions is fighting to reignite its relevance in the labor movement.
Fain and a team of advisors and labor lawyers have built the UAW's fight around a broader confrontation between the working class and the ultra-wealthy that has burgeoned since the pandemic and resulted in major deals for Teamsters, United Airlines pilots, and more.
"Billionaires, in my opinion, don't have a right to exist," Fain said on a livestream earlier in September. He went on to talk about how the labor movement once fought to deliver the 40-hour work week. "Sadly, it feels like we've gone so far backwards, that we have to fight just to have the 40-hour workweek back. Why is that? So another asshole can make enough money to shoot himself to the moon."
Rhetoric like this is a return to the union's roots as an early leader in the 1930s labor movement. Even the branding of the strike, which Fain has called the "Stand Up" strike, is a play on the UAW's highly influential 1937 sit-down strike at GM.
The hope of union leaders and workers on the picket line like Wegener is that the UAW can once again set the standard for work in automotive manufacturing.
"There's a war for the auto job happening here," Jason Miller, a professor of supply chain management at Michigan State University, said.
Changing the equation
On the other side of the bargaining table, Ford, GM, and Stellantis are reluctant to be made an example of, especially so soon after the 2009 financial crisis threatened their very existence.
Each of the Detroit 3 are spending billions of dollars to electrify their vehicle offerings and must weigh costly R&D expenses in the future with these increased labor costs.
"It's at such a crossroads," Melissa Atkins, a labor and employment partner at Obermayer, said. "There's the change to electric vehicles, which would essentially take less employees, and they're more expensive to build and they're trying to find cheaper ways to do this. So they have to invest in innovation and different ways and different models. That costs money."
Executives have pleaded with the union in public to consider the broader implications of their demands.
"There's no way we could be sustainable as a company," Ford CEO Jim Farley told CNBC on the eve of the strike deadline last week. "You want us to choose bankruptcy over supporting our workers."
The Detroit automakers always go into quadrennial contract negotiations with the UAW with the goal of remaining "competitive." The idea is to toe the line between meeting union demands while not adding to the gap between Detroit's labor cost and the rest of the industry.
Tesla looms large over this year's labor talks
Something top of mind for everyone watching this develop is what it means for Tesla.
Elon Musk's electric car company is estimated to spend about $45 an hour in wages and benefits on its non-union labor, compared to about $66 an hour spent by Ford, GM, and Stellantis. The UAW's current demands would balloon that figure to about $136 an hour, according to estimates from Wells Fargo.
At this point in the contentious labor talks, a higher labor cost per hour is a given, requiring Detroit executives to rethink the equation on manufacturing, Miller said.
"They will have to find a way to make labor costs a less important overall cost," Miller said.
The companies can try to do that by integrating more automation, shifting production to more productive facilities, and relying more on overseas manufacturing, he said — a fine line to walk as these automakers electrify given the Inflation Reduction Act's requirements for domestic carmaking in order to receive crucial tax credits, thus keeping the competitiveness going.
Tesla has already done that cost-cutting. Part of Tesla's advantage also lies in the profit sharing returns that, for the most part, have kept its employees happy — or at least, not eager to unionize — over the years.
"It's a very challenging moment for the UAW," Conroy said. "They've drawn the line and they've gone to war, and the question is: are they going to be able to win or not? And I don't know."
Business Insider
How does the UAW strike impact MS auto plants? See here
Ross Reily, Mississippi Clarion-Ledger
Wed, September 20, 2023
The United Auto Workers' strike against the Big Three automakers could have an impact on the national economy and further into the automotive industry.
At this point, it is hard to say how far-reaching the implications will be as the UAW is striking against the automotive companies known as the "Detroit Three." This includes General Motors, Ford and Stellantis, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands.
The UAW, which went on strike on Sept. 15, says around 13,000 members are walking the picket lines.
The Detroit Three does not include Nissan or Toyota, which have manufacturing plants in Mississippi.
Nissan has run a production facility in Canton for more than 20 years while Toyota plant in Blue Springs near Tupelo has been in operation since 2011.
While there has been some speculation that the strike could impact other automakers from a supply chain standpoint, Nissan says it doesn't expect any issues where Mississippi is concerned.
Jérémie Papin, chairperson Nissan Americas, speaks during a news conference about Nissan's announcement that the Nissan Canton Vehicle Plant will be the center for its electric vehicle production in the United States at the Canton, Miss., plant Thursday, Feb. 17, 2022. The investment for EV production will total $500 million with production to begin in 2025.More
"Currently, we do not anticipate any operational impacts from the strike but continue to monitor the situation," said Lloryn Love-Carter, Director of U.S. Communications of the Nissan Group of the Americas, when asked by the Clarion Ledger about the Canton Nissan plant.
One publication suggested that if there were a supply-chain issue, it likely would not occur immediately.
Considering that automakers have already been through many years of shortages coming out of the COVID-19 supply-chain setbacks, experts believe suppliers will not be quick to react to the UAW strike.
Neither the Blue Springs Toyota plant nor the Canton Nissan plant are unionized despite a strong push from the UAW in 2017.
Back then, the voting by 3,700 assembly and maintenance workers via secret ballots shot down the attempts by the UAW to unionize the workforce.
On one side were workers who say they need a union to give them a voice in their workplace, to protect against arbitrary treatment, and to bargain for better benefits and pay.
Other Nissan employees reject the idea of a union speaking for them. They fear the UAW would be an economic albatross, burdening an employer who pays them well.
The current battle
In the current debate of the Detroit Three, the UAW revealed a list including the following demands on Aug. 1:
◾ Eliminating wage tiers.
◾ A 40% wage increase over the life of the contract. The 40% signifies the increase in CEO salaries.
◾ Restoring the cost-of-living allowance adjustments to counteract inflation.
◾ Defined benefit pension for all workers.
◾ The right to strike over plant closures.
◾ A reduced work week and more paid time off.
◾ Limiting the use of temporary workers.
◾ Increased benefits to current retirees.
Ross Reily can be reached by email at rreily@gannett.com
This article originally appeared on Mississippi Clarion Ledger: UAW strike impact on Mississippi auto makers
Nora Naughton,Alexa St. John
Updated Thu, September 21, 2023
For the first time in its 88-year history, the UAW is on strike at all three of the Detroit companies at once.
Bill Pugliano/Getty Images; Matthew Hatcher/AFP via Getty Images; Alyssa Powell/Insider
The UAW is looking to regain its influence in the automotive industry.
A more expensive labor deal will change the manufacturing equation for Detroit.
Tesla is looming large over the strike and labor talks.
On the picket line at Ford's Bronco and Ranger factory in suburban Detroit, one striking United Auto Workers member is thinking about more than just his job.
"I'm fighting for future generations to come," Matt Wegener, who has been at Ford's Michigan Assembly for more than 20 years, said. "Just look at the amount corporations and CEOs are making compared to the working person – not just the Detroit 3, but everywhere. It's crazy."
For the first time in its 88-year history, the UAW is on strike at all three of the Detroit companies at once. The UAW's unique whack-a-mole targeted strategy gives the union more longevity in this historic work stoppage, putting pressure on Ford, GM, and Stellantis to deliver hefty wage increases and a reversal of some concessions workers made during the 2009 recession.
"We have a bigger point to make," Wegener said, noting the strike sends a larger message about inequality across the industry. "It's not just one company not sharing the profits, it's all three."
That larger point is certainly being made, manufacturing and labor experts told Insider this week. In fact, the United Auto Workers-led strike at the Detroit 3 is shaping up to have an outsized effect on the entire automotive industry.
"If the UAW does dig their heels in and does well here, it's highly likely that they will get other auto workers who are not UAW auto workers to be very interested," Ambrose Conroy, CEO of consultancy Seraph, said. "And that gives them even more power."
The UAW is looking to regain its influence in the automotive industry.
A more expensive labor deal will change the manufacturing equation for Detroit.
Tesla is looming large over the strike and labor talks.
On the picket line at Ford's Bronco and Ranger factory in suburban Detroit, one striking United Auto Workers member is thinking about more than just his job.
"I'm fighting for future generations to come," Matt Wegener, who has been at Ford's Michigan Assembly for more than 20 years, said. "Just look at the amount corporations and CEOs are making compared to the working person – not just the Detroit 3, but everywhere. It's crazy."
For the first time in its 88-year history, the UAW is on strike at all three of the Detroit companies at once. The UAW's unique whack-a-mole targeted strategy gives the union more longevity in this historic work stoppage, putting pressure on Ford, GM, and Stellantis to deliver hefty wage increases and a reversal of some concessions workers made during the 2009 recession.
"We have a bigger point to make," Wegener said, noting the strike sends a larger message about inequality across the industry. "It's not just one company not sharing the profits, it's all three."
That larger point is certainly being made, manufacturing and labor experts told Insider this week. In fact, the United Auto Workers-led strike at the Detroit 3 is shaping up to have an outsized effect on the entire automotive industry.
"If the UAW does dig their heels in and does well here, it's highly likely that they will get other auto workers who are not UAW auto workers to be very interested," Ambrose Conroy, CEO of consultancy Seraph, said. "And that gives them even more power."
A lot is on the line for the UAW
The UAW has been rattled by declining membership and a yearslong criminal probe that sent several of its prominent leaders to prison. The union has also lost a lot of influence in the industry, failing over the last several years to organize outside of the Detroit 3, with one of its more bitter losses being Tesla.
Despite those challenges, one of America's oldest and most well-known unions is fighting to reignite its relevance in the labor movement.
Fain and a team of advisors and labor lawyers have built the UAW's fight around a broader confrontation between the working class and the ultra-wealthy that has burgeoned since the pandemic and resulted in major deals for Teamsters, United Airlines pilots, and more.
"Billionaires, in my opinion, don't have a right to exist," Fain said on a livestream earlier in September. He went on to talk about how the labor movement once fought to deliver the 40-hour work week. "Sadly, it feels like we've gone so far backwards, that we have to fight just to have the 40-hour workweek back. Why is that? So another asshole can make enough money to shoot himself to the moon."
Rhetoric like this is a return to the union's roots as an early leader in the 1930s labor movement. Even the branding of the strike, which Fain has called the "Stand Up" strike, is a play on the UAW's highly influential 1937 sit-down strike at GM.
The hope of union leaders and workers on the picket line like Wegener is that the UAW can once again set the standard for work in automotive manufacturing.
"There's a war for the auto job happening here," Jason Miller, a professor of supply chain management at Michigan State University, said.
Changing the equation
On the other side of the bargaining table, Ford, GM, and Stellantis are reluctant to be made an example of, especially so soon after the 2009 financial crisis threatened their very existence.
Each of the Detroit 3 are spending billions of dollars to electrify their vehicle offerings and must weigh costly R&D expenses in the future with these increased labor costs.
"It's at such a crossroads," Melissa Atkins, a labor and employment partner at Obermayer, said. "There's the change to electric vehicles, which would essentially take less employees, and they're more expensive to build and they're trying to find cheaper ways to do this. So they have to invest in innovation and different ways and different models. That costs money."
Executives have pleaded with the union in public to consider the broader implications of their demands.
"There's no way we could be sustainable as a company," Ford CEO Jim Farley told CNBC on the eve of the strike deadline last week. "You want us to choose bankruptcy over supporting our workers."
The Detroit automakers always go into quadrennial contract negotiations with the UAW with the goal of remaining "competitive." The idea is to toe the line between meeting union demands while not adding to the gap between Detroit's labor cost and the rest of the industry.
Tesla looms large over this year's labor talks
Something top of mind for everyone watching this develop is what it means for Tesla.
Elon Musk's electric car company is estimated to spend about $45 an hour in wages and benefits on its non-union labor, compared to about $66 an hour spent by Ford, GM, and Stellantis. The UAW's current demands would balloon that figure to about $136 an hour, according to estimates from Wells Fargo.
At this point in the contentious labor talks, a higher labor cost per hour is a given, requiring Detroit executives to rethink the equation on manufacturing, Miller said.
"They will have to find a way to make labor costs a less important overall cost," Miller said.
The companies can try to do that by integrating more automation, shifting production to more productive facilities, and relying more on overseas manufacturing, he said — a fine line to walk as these automakers electrify given the Inflation Reduction Act's requirements for domestic carmaking in order to receive crucial tax credits, thus keeping the competitiveness going.
Tesla has already done that cost-cutting. Part of Tesla's advantage also lies in the profit sharing returns that, for the most part, have kept its employees happy — or at least, not eager to unionize — over the years.
"It's a very challenging moment for the UAW," Conroy said. "They've drawn the line and they've gone to war, and the question is: are they going to be able to win or not? And I don't know."
Business Insider
How does the UAW strike impact MS auto plants? See here
Ross Reily, Mississippi Clarion-Ledger
Wed, September 20, 2023
The United Auto Workers' strike against the Big Three automakers could have an impact on the national economy and further into the automotive industry.
At this point, it is hard to say how far-reaching the implications will be as the UAW is striking against the automotive companies known as the "Detroit Three." This includes General Motors, Ford and Stellantis, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands.
The UAW, which went on strike on Sept. 15, says around 13,000 members are walking the picket lines.
The Detroit Three does not include Nissan or Toyota, which have manufacturing plants in Mississippi.
Nissan has run a production facility in Canton for more than 20 years while Toyota plant in Blue Springs near Tupelo has been in operation since 2011.
While there has been some speculation that the strike could impact other automakers from a supply chain standpoint, Nissan says it doesn't expect any issues where Mississippi is concerned.
Jérémie Papin, chairperson Nissan Americas, speaks during a news conference about Nissan's announcement that the Nissan Canton Vehicle Plant will be the center for its electric vehicle production in the United States at the Canton, Miss., plant Thursday, Feb. 17, 2022. The investment for EV production will total $500 million with production to begin in 2025.More
"Currently, we do not anticipate any operational impacts from the strike but continue to monitor the situation," said Lloryn Love-Carter, Director of U.S. Communications of the Nissan Group of the Americas, when asked by the Clarion Ledger about the Canton Nissan plant.
One publication suggested that if there were a supply-chain issue, it likely would not occur immediately.
Considering that automakers have already been through many years of shortages coming out of the COVID-19 supply-chain setbacks, experts believe suppliers will not be quick to react to the UAW strike.
Neither the Blue Springs Toyota plant nor the Canton Nissan plant are unionized despite a strong push from the UAW in 2017.
Back then, the voting by 3,700 assembly and maintenance workers via secret ballots shot down the attempts by the UAW to unionize the workforce.
On one side were workers who say they need a union to give them a voice in their workplace, to protect against arbitrary treatment, and to bargain for better benefits and pay.
Other Nissan employees reject the idea of a union speaking for them. They fear the UAW would be an economic albatross, burdening an employer who pays them well.
The current battle
In the current debate of the Detroit Three, the UAW revealed a list including the following demands on Aug. 1:
◾ Eliminating wage tiers.
◾ A 40% wage increase over the life of the contract. The 40% signifies the increase in CEO salaries.
◾ Restoring the cost-of-living allowance adjustments to counteract inflation.
◾ Defined benefit pension for all workers.
◾ The right to strike over plant closures.
◾ A reduced work week and more paid time off.
◾ Limiting the use of temporary workers.
◾ Increased benefits to current retirees.
Ross Reily can be reached by email at rreily@gannett.com
This article originally appeared on Mississippi Clarion Ledger: UAW strike impact on Mississippi auto makers
Nathaniel Meyersohn, CNN
Wed, September 20, 2023
Looming over the United Auto Workers strike: Automakers’ continued migration to the anti-union South.
Beginning in the 1970s and 1980s, the auto industry began shifting South, a region long characterized by hostility to labor unions and by low wages.
Since then, assembly lines of higher-paid UAW workers at Detroit’s Big Three – Ford, General Motors and Stellantis – have shrunk. And automakers such as Volvo, Mercedes-Benz, BMW, Toyota and Hyundai have steadily hired nonunion autoworkers, who make less money for substantially the same work, in the South.
“The auto industry’s move south hangs over these talks because now only a minority of workers are in unionized assembly plants,” said Stephen Silvia, a professor at American University and author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants.” While all of the Big Three’s plants are unionized, not a single plant in the South is unionized.
Workers install vehicle parts on an assembly line at the Nissan Motor Co. manufacturing facility in Smyrna, Tennessee, in May 2021. - Luke Sharrett/Bloomberg/Getty Images
Automakers’ transition to electric vehicles is accelerating these regional trends. Ford and GM are building battery plants below the Mason-Dixon Line, where states have laws that make unionization much harder than in the traditional working-class bastions of the Midwest.
UAW leaders and union supporters worry the shift will lower compensation and cut out unions from the auto industry’s future, and they are seeking to address these concerns in talks with the Big Three.
Almost as alarming for the UAW is that EVs require fewer parts and, accordingly, less labor to assemble than gas-powered cars. Jobs at nonunion EV battery facilities pay less than the roughly $32 an hour that veteran UAW workers make.
“The balance is shifting in favor of the Southeast over the Midwest,” S&P Global Market Intelligence said in a recent report on auto industry jobs. “The South is poised to take a greater portion of US vehicle production in the years ahead.”
Shifting power center
Detroit was the heart of the US auto industry for most of the 20th century, but the South has loomed larger since the 1970s.
Lured by tax incentives, lower wages and land costs, and a political climate opposed to unions, foreign automakers built plants in the South, which previously had a small auto presence.
Nissan opened a plant in Smyrna, Tennessee, in 1983. BMW opened in Spartanburg, South Carolina, in 1994. Mercedes-Benz came to Vance, Alabama, in 1997. Honda moved to Lincoln, Alabama, in 2001. Volkswagen, Toyota, Hyundai and Kia built factories the South in the 2000s.
BMW opened in South Carolina in 1994. - Will & Deni McIntyre/The Chronicle Collection/Getty Images
“Almost every foreign auto factory that’s opened since the ’90s has sprouted below the Mason-Dixon Line,” CNN reported in 2007. The trend has continued since then.
As the Big Three shrank into much smaller versions of themselves, losing large amounts of market share to the foreign transplants, the UAW shrank with it.
UAW membership peaked in 1979 at 1.5 million, according to the union. Last year, it had 383,000 autoworkers.
The UAW, with its stronghold in the union-friendly Midwest and northern states, has struggled to unionize autoworkers in the South, decades after the foreign auto plants went up in the region.
“It’s been a huge constraint on UAW, and they’re trying to break out of it,” said Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, and author of “Fabulous Failure: The Clinton Presidency and the Transformation of American Capitalism,” which published this year.
An aerial view of the Mercedes plant in Vance, Alabama, in 2008. - Jeffrey Greenberg/Universal Images Group/Getty Images
The UAW initially encouraged Japanese and Korean car manufacturers to enter the United States, believing it could unionize plants in the South. But it ran into labor laws tilted against unions, such as so-called right-to-work laws that allow workers to opt out of paying fees to a union, even if they benefit from a union bargaining agreement, and Southern Republican leaders determined to block unions, Lichtenstein said.
The union has tried and repeatedly failed to gain a foothold at Nissan and Volkswagen in Tennessee, Toyota in Kentucky, Mercedes-Benz in Alabama, and other foreign-owned plants in the South. Tennessee Gov. Bill Lee in 2019 even visited Volkswagen’s plant in Chattanooga to encourage workers to reject the union. Former South Carolina Gov. Nikki Haley, now a contender for president, said in 2015 she was a “union buster” when recruiting automakers to the state.
Since 1990, the South’s share of auto jobs has doubled from around 15% to 30% today, according to S&P Global Market Intelligence.
Meanwhile, the Midwest’s share has declined from 60% to 45%.
EV jobs
The transition to electric vehicles is poised to speed up this trend. Mostly nonunion EV jobs and manufacturing investments are surging in Southern states led by Republicans.
Automakers have announced around $83 billion in EV investments and 95,000 jobs in five Southern states – Georgia, Tennessee, South Carolina, Kentucky and North Carolina – since 2015, according to a recent report by the Environmental Defense Fund, well surpassing planned EV investments and job creation in the Midwest.
Georgia attracted three of the top six projects by planned investment and the top two by planned jobs. The South has picked up 66% of planned EV jobs, while projects in Midwestern states such as Michigan, Indiana, Kansas and Ohio have combined for 26% of planned jobs, according to S&P Global.
Ford's battery manufacturing complex under construction near Stanton, Tennessee, in September 2022. - Houston Cofield/Bloomberg/Getty Images
The Big Three and other auto companies are also speeding up EV investments in the South with joint-venture agreements with foreign battery manufacturers. These joint venture agreements aren’t covered by UAW contracts.
That has been one sticking point in negotiations between UAW and the Big Three automakers. Ford, for example, has already poured billions into battery plants in Kentucky and Tennessee that will produce EV batteries and trucks.
And as automakers are getting government loans and subsidies to build these plants in the South, the UAW wants the Biden administration and federal agencies to impose stipulations on those loans that would make it easier to unionize the plants. The UAW has thus far declined to endorse Biden’s 2024 reelection bid, in part to put pressure on his administration for what the union calls a “just transition” to EVs.
“The EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won,” UAW President Shawn Fain said recently.
CNN
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