Jamie L. LaReau, Detroit Free Press
Updated Wed, September 6, 2023
A UAW strike against one or all of the Detroit Three automakers seems more than likely at the moment and the costs to the car companies would be big and swift, industry observers said this week.
While the UAW is not likely to get the 40% hourly wage increase across the life of the contract it seeks, it could get its much-desired cost-of-living adjustment, an analyst said.
A simultaneous strike by the UAW and its Canadian counterpart, Unifor, for even a month would produce inventory losses that automakers would likely not be able to replace this year, Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, stated in a newsletter.
"A simple one day strike across the U.S. and Canada would remove 25,000 units of production," Fiorani wrote. "A strike by Unifor could remove as many as 50,000 vehicles from production in just one month while a similar length strike by the UAW could eliminate the output of as many as 500,000 vehicles. With tight production schedules and the current level of overtime, recovery of those lost vehicles, especially in this calendar year, is all but impossible."
More on Detroit 3, UAW: Can the UAW afford to strike all three Detroit automakers?
UAW President Shawn Fain, right, shouts while walking with officials and union members during the Labor Day parade along Michigan Avenue in Detroit's Corktown neighborhood on Monday, Sept. 4, 2023, to Roosevelt Park in front of the Michigan Central Station.
Similarly, Dan Ives, managing director and senior equity research analyst at Wedbush Securities, wrote in a research note Wednesday, "If an agreement is not reached by next week on September 14th, there is a very likely chance a strike will then occur with the UAW workers walking out. Let's be clear: this is a potential nightmare situation for (General Motors) 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."
More: UAW says authorization for strike against Detroit 3 overwhelmingly approved: What's next
Meanwhile, GM is expected to submit its contract offer to the UAW on Thursday about 10 a.m., according to a source familiar with the talks. GM spokesman David Barnas confirmed that “we are meeting with the UAW tomorrow.” He declined to offer any other details.
Stellantis confirmed Wednesday that it intends to pass the UAW a counteroffer to the members’ economic demands by the end of the week, said spokesperson Jodi Tinson.
"We look forward to continuing our discussions to reach an agreement that better positions the business to meet the challenges of the U.S. marketplace and secures the future for all of our employees, their families and our company," Tinson wrote in a statement.
The odds of a strike are high
Fiorani told the Free Press that he believes a strike against all three is "a possibility," while a strike against one of the three or a perhaps a key component or supplier is "highly likely at this point" because UAW President Shawn Fain has "given every sign that negotiations before next week's deadline will not reach his desired target."
AFS covers sales and production forecasts for the global automotive industry while providing analysis to the numbers. It wrote about the strike as one of many topics in its AutoForecast Monthly newsletter to its clients and select media
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions in Chester Springs, Pennsylvania, raises questions about the future of the Ford Edge built at the Oakville Assembly Plant in Ontario, Canada. This photo was taken in March 2019.
Fiorani noted that Fain has been bucking bargaining tradition. For example, unions have historically selected one carmaker to forge a contract with and then use that contract as the blueprint for contracts with the other two. Unifor has done this by recently selecting Ford Motor Co. as its target company, in part, because Ford has said it will invest $1.8 billion in its Oakville Assembly complex in Ontario to convert it to make electric vehicles.
But Fain has said he wants a tentative contract agreement with all three automakers by the contract expiration of 11:59 p.m. Sept. 14. He has been firm on his unwillingness to accept a contract extension, signaling a possible walkout at one or all of the carmakers if there is no deal by Sept. 14.
"In the current environment, the odds of a strike in the U.S. is very likely and the Canadian union recently voiced their intention to strike in solidary with the UAW," Fiorani wrote.
Predictions of what the UAW may or may not get
Fain's hard push means that UAW members will likely see hourly wage increases. He has pushed for at least a 40% raise over the life of the contract. As the Detroit Free Press first reported in July, GM is expected to offer a wage increase for its 50,000 hourly workers in the new contract.
Fiorani said it is unlikely the UAW will get all of what it asks for, adding that a more realistic figure would be about 5% a year or roughly 20% over four years.
"Getting a 40% raise over the length of a new contract will reduce the competitiveness of vehicles produced in the United States, leaving the target much closer to cost of living adjustments of 3-4% annually," Fiorani said. "Ultimately, the final wage increases will likely be around 5%."
He wrote that inflation has receded to around 3% and is not expected to return to the higher levels seen during the pandemic rebound.
As to some of the union's other demands, Fiorani said:
"Pension reinstatement would add to the long term liabilities that would be detrimental to the stock price (of the automakers). There might be room for adjustments to retirement packages, but bringing it back in-house is unlikely."
"A shorter work week would not mean that the factories would produce less, but would require adding workers to the payroll. Getting 40-hour pay for a 32-hour week is not financial possible while attempting to stay competitive with non-union plants."
Fiorani said the UAW's requests to reinstate cost-of-living adjustments and remove tiers are "far more attainable" than a shorter workweek or pension reinstatement.
More: 2 auto unions to bargain with the Detroit 3 at same time, each want a share of profits
Contact Jamie L. LaReau: jlareau@freepress.com.
This article originally appeared on Detroit Free Press: UAW strike deadline looms: Here's potential impact for Detroit 3
Miranda Nazzaro
Wed, September 6, 2023
The leader of the United Auto Workers (UAW) warned the union will strike at any Detroit automaker that does not reach a new labor agreement by next week.
When asked by The Associated Press (AP) if the union would call a strike on any of the companies that do not reach a tentative agreement, UAW President Shawn Fain said, “That’s the plan.”
The contracts with the three major automakers — Ford, General Motors and Stellantis — are set to expire at 11:59 p.m. on Sept. 14.
Negotiations between UAW and the Big Three have been ongoing since early July over pay increases, pensions, career security and concerns over the industry’s shift to electric vehicles (EVs), which require fewer workers to make.
The union is asking for a 46 percent pay raise, a 32-hour week with 40 hours of pay, union representation of workers at new battery plants and restoration of traditional pensions.
Speaking with the AP, Fain signaled the possibility of avoiding a strike and recognized the union might need to give up some of its requests to reach agreements with the three companies. Fain told the AP he would rather reach new contracts with the automakers than begin a strike of up to 146,000 members.
Reporting some progress with negotiations, Fain told the AP the UAW plans to meet with General Motors on Thursday about the union’s economic demands. Discussions continue with Ford on wages and benefits, while Stellantis has not counteroffered the union’s wage and benefit requests, according to Fain.
The Big Three have argued UAW’s demands are unrealistic amid intense competition from Tesla and lower-wage foreign automakers.
“I know that our demands are ambitious, but I’ve told the companies repeatedly, I’m not the reason that members’ expectations are so high,” Fain said in a streamed event last week. “What’s driving members’ expectations are the Big Three’s profits. You cannot make $21 billion in profits in half a year and expect members to take a mediocre contract.”
Last month, UAW Vice President Rich Boyer claimed Stellantis has threatened to move the production of Ram 1500 pickup trucks from suburban Detroit to Mexico. The possibility of moving production of the current Ram 1500 to Mexico fueled automakers’ concerns that the push for EVs will risk their jobs and compensation.
The Hill reached out to UAW for additional comment.
Updated at 2:02 p.m.
Will Daniel
Wed, September 6, 2023
Dan Ives has made a name for himself on Wall Street covering the latest and greatest tech companies and trends, but amid the rise of electric vehicles and self-driving technology, he’s also begun to focus on the auto sector. While sky-high car prices have led profits to surge at many automakers in 2023, Ives thinks a worker strike could cripple the progress of some of the industry’s giants, and he’s not mincing words. “Let’s be clear: This is a potential nightmare situation for GM and Ford,” he wrote in a Wednesday note.
The United Auto Workers (UAW) union is pushing for a new contract that includes a 46% pay raise, a 32-hour week, the restoration of traditional pensions, and more. And if its demands aren’t met, union members plan to strike. In fact, some 97% of the 146,000 UAW union members at Ford, GM, and Stellantis (formerly Fiat Chrysler) have voted to walk out if they can’t agree to a new contract with their employers by Sept. 14.
Ives said a strike is now “very likely” because UAW leadership is under pressure to “deliver a big win” after the Teamsters union reached a lucrative contract agreement with UPS in July that secured wage increases for 340,000 workers, including a highly publicized $170,000 average salary for full-time drivers. And with “EV competition rising across the board,” the analyst argued, “the timing could not be worse.”
Ford, GM, and Stellantis are essentially stuck between a rock and a hard place. If they can’t reach an agreement with the UAW union and workers strike, there will be production delays and their EV ambitions will be put on hold, according to Ives. But if negotiations take place and the automakers agree to a new contract with the UAW union that includes some or all of their demands, it will lead to “billions of incremental annual costs.”
If anything close to a 40% wage increase is approved or agreed to, Ives writes, it would be a “major headwind on the cost front and ultimately in some way be passed down to the consumer.” That will likely force Ford, GM, and Stellantis to raise EV prices, which could lead to demand issues amid rising competition.
The UAW union’s moves have left automakers with a tough decision: either face a production-killing strike or risk a major increase in costs for the next decade. “We spent time in Detroit a few weeks ago and sense a ‘very nervous time’ across the auto industry as there is a lot riding on these negotiations,” Ives wrote of the situation.
Rising profits lead to ‘audacious demands’
The UAW union’s demands are certainly aggressive. Even president Shawn Fain, newly elected after a series of scandals at union leadership, has called them “audacious.” But Fain also believes automakers’ rising profits justify a move to give workers a bigger slice of the pie. “Our employers only value one thing, profit; they do not value us. And the only way the working class advances is if we stand together,” he said in a fiery Facebook Live Friday morning. “Record profits mean record contracts.”
To his point, Ford, General Motors, and Stellantis made a combined $21 billion in profits in the first six months of 2023.
Stellantis, the Amsterdam-headquartered global auto giant which sells under brands like Jeep, Fiat, and Peugeot, turned in a record $12.1 billion net profit in the first six months of the year. Stellantis chief executive Carlos Tavares said the results were due to a “very strong focus” on profitability on the company’s earnings call.
At Ford, net income soared to $3.7 billion in the first half of this year compared with a loss of $2.4 billion in the same period a year ago. And GM also managed to increase its net income 56% to $2.6 billion in the second quarter, even after accounting for a $792 million charge related to a 2021 Chevy Bolt recall.
This story was originally featured on Fortune.com
Michael Wayland, CNBC
Wed, September 6, 2023
A strike by the United Auto Workers union against the Detroit automakers would help President Joe Biden and other politicians pick a side when it comes to organized labor, UAW President Shawn Fain said Wednesday night.
“I think our strike can reaffirm to [Biden] of where the working-class people in this country stand and, you know, it’s time for politicians in this country to pick a side,” he said during CNBC’s “Last Call” with Brian Sullivan. “Either you stand for a billionaire class where everybody else gets left behind, or you stand for the working class, the working-class people vote.”
The outspoken union leader reiterated that striking against General Motors, Ford Motor and/or Stellantis when contracts for roughly 150,000 auto workers expire after 11:59 p.m. Sept. 14 is not the goal, but the sides remain far apart when it comes to key demands.
“We’re down to the wire. We have eight days to go,” Fain said. “We’re pushing. We’re available 24/7 as we have been for the last seven weeks, so it’s up to the companies on where we end up and whether we end up having to take action or not on the 14th.”
Fain said the union is set to meet Thursday morning with GM, following a Wednesday afternoon meeting with Ford. Stellantis said Wednesday that it “intends to pass the UAW a counter offer to the members’ economic demands by the end of the week.”
Fain’s comments regarding Biden add to an unusual tension between the leader of the historically Democratic union and the commander in chief, who has called himself “the most pro-union president you’ve ever seen.”
Earlier this week, Fain said he was “shocked” to hear Biden say he was “not worried about a strike until it happens” and that he didn’t “think it’s going to happen.”
“He must know something we don’t know. Maybe the companies plan on walking in and giving us our demands on the night before. I don’t know but he’s on the inside on something I don’t know about,” Fain told reporters during a Labor Day event in Detroit.
The UAW has historically supported Democrats. However, former President Donald Trump was able to gain notable support from blue-collar autoworkers during his presidential campaigns. Fain has said he believes another Trump presidency “would be a disaster,” citing the need for the union to “get our members organized behind a pro-worker, pro-climate, and pro-democracy political program that can deliver for the working class.”
The UAW is withholding a reelection endorsement for Biden until concerns about the auto industry’s transition to all-electric vehicles such as job security, pay and organizing are addressed, Fain has said previously.
“Our endorsements are going to be earned not freely given and the actions are going to dictate who we endorse,” Fain reiterated Wednesday.
Simultaneous strikes against GM, Ford and Stellantis would be unprecedented. It also would mark one of the UAW’s largest strikes in recent history and could quickly have a ripple effect on the automotive supply chain, the U.S. economy and domestic manufacturing.
A strike against GM in 2019 during the last round of contract negotiations lasted 40 days and cost the automaker $3.6 billion in earnings that year, GM reported at the time.
The union’s current demands also could be costly if tentative deals are reached. Key demands include a 40% hourly pay increase, a reduced 32-hour workweek, a shift back to traditional pensions, elimination of compensation tiers, and restoration of cost-of-living adjustments, among other items on the table.
This article was originally published on NBCNews.com
Nandita Bose and David Shepardson
Updated Wed, September 6, 2023
Detroit UAW workers strike threat tests Biden's plan to win union votes
WASHINGTON (Reuters) -U.S. President Joe Biden's strategy of backing politically crucial unions while avoiding strikes that cripple the economy has hit a bump in Detroit.
During a summer of labor unrest, Biden has touted his pro-labor policies by speaking out for unions, while his administration behind the scenes tries to smooth the way for deals with employers to avoid costly walkouts, union leaders and administration officials said.
But in a reminder of how hard it is to appease energized workers while tamping down on price hikes that cause inflation, Biden and auto workers union UAW - the only major union not to endorse his 2024 presidential run - are at loggerheads.
Biden's Labor Day prediction that the union would not strike against Detroit's automakers ahead of a Sept. 14 contract deadline was soundly rejected by UAW President Shawn Fain.
"He must know something we don't know," said Fain in response, adding that he was "shocked" by the comment. "Maybe the companies plan on walking in and giving us our demands on the night before. I don't know, but he's on the inside on something I don't know about."
White House Press Secretary Karine Jean-Pierre said Biden's comments about the UAW over Labor Day was him being "an optimistic person."
The president remains "optimistic" about a resolution of negotiations with the UAW, she said on Tuesday, and believes the union is at the "heart of an electric vehicle future that is Made in America with union jobs."
Labor unions like the UAW - which represents 146,000 workers at General Motors, Ford and Stellantis NV's North American unit who are demanding cost of living increases and pay that matches company profits - are key to Biden's game plan for winning reelection in 2024.
He needs their support to win key states like Pennsylvania and Michigan again, which stand to bear the brunt of any major strikes against carmakers.
A UAW strike that shuts Detroit's Big Three manufacturers could cost carmakers, suppliers and workers over $5 billion, a study by the Michigan-based Anderson Economic Group says. With new car inventories slim, consumer experts say that could translate to higher car prices - an important component of inflation.
Biden is "more pro-labor than any other president but he is doing a balancing act when it comes to strikes," said Kate Bronfenbrenner, director of labor education research at Cornell University's School of Industry & Labor Relations (ILR).
Biden created a White House team in 2021 to support new unions, which his administration says are key to fighting U.S. inequality, and has backed collective bargaining and union wage increases since taking office. The White House has tried to play a role in several recent large-scale union contract negotiations involving rail workers and West Coast port workers.
On Wednesday, Biden reiterated that "collective bargaining means everyone wins," and said the successful negotiations to resolve a labor dispute at West Coast ports will have a direct impact on lowering inflation. Workers there ratified a new six-year contract last month that includes a 32% pay raise.
While other major labor unions have endorsed Biden's 2024 run, the UAW, which backed Biden in 2020, has held out, citing his electric vehicle policies. Biden's Republican rival, Donald Trump, stepped up his attacks on the Democrat's EV policies over the Labor Day weekend, urging auto workers to support him. Trump won Michigan in 2016, helping propel him to the White House; Biden beat him by 154,000 votes in Michigan in 2020.
The UAW failing to endorse Biden is "a bit of a danger signal," given Michigan's importance in 2024, said Harley Shaiken, labor professor at the University of California, Berkeley. The hesitancy to endorse Biden, Shaiken said, "could convince many UAW members, 'Well, if the leadership doesn't think they're so great, why not Trump?'"
SEASON OF STRIKES
The labor tensions in Detroit come as unionized workers across a wide range of industries are striking, or threatening to strike, to win back concessions made during the pandemic.
In 2022, there were 23 large strikes in the U.S. involving 1,000 workers or more, affecting over 120,000 workers, according to the Bureau of Labor Statistics. In 2023, the data through August shows 34 similar work stoppages affecting over 142,000 workers. Around half a million more threatened strikes in the first half of 2023, estimates from national labor unions show.
Biden, 80, is tying his 2024 re-election bid to the health of the economy, highlighting job growth, rising wages and fading recession fears. At the same time, the Biden campaign is seeking donations from corporations and executives, and endorsement from business for its economic policies.
Accelerating Detroit's shift to electric vehicles is a central element of Biden's climate policy, and the administration is offering billions of dollars in federal subsidies to spur domestic EV and battery production.
UAW members in Michigan, Ohio, Indiana, Illinois and other Midwestern states, however, mainly build combustion trucks and SUVs.
WHITE HOUSE'S ROLE
The president has directed his staff to engage in "prudent policymaking," over labor issues, two senior White House officials said in late July, indicating that the White House will not jump into every high-profile negotiation. They said they are in constant touch with unions and employers, monitoring the progress in talks.
"We don't view our role as waiting for more opportunities to jump in and facilitate," one of the officials said.
The White House last week announced $12 billion in Energy Department grants and loans that automakers could use to retool factories to build electric vehicles, a nod to the UAW's push to stop Stellantis from closing a Jeep assembly plant in Belvidere, Illinois. The company blamed the decision to idle the plant on the high cost of converting to electric vehicles.
That is a contrast from direct mediation by administration officials last year in an agreement to prevent a national rail strike that could have devastated the American economy.
Biden's intervention provoked criticism from some workers and labor allies, who blamed the administration for undercutting their negotiating position.
That dynamic is why the Teamsters, representing UPS workers, urged the White House to stay out of its talks at a critical phase in July - as it ultimately did, labor experts said.
(Reporting by Nandita Bose and David Shepardson in Washington, Additional reporting by Joseph White in Detroit, Editing by Heather Timmons and Deepa Babington)
Automakers Ford, GM and Stellantis have largely rejected the demands.
September 5, 2023
Nearly 150,000 auto workers could strike this month
The United Auto Workers union is asking for a 46% raise, 32-hour work week with 40 hours of pay and the return of pensions.
A four-day workweek at full-time pay, a 46% wage increase and a share of company profits are among the demands of the union representing approximately 150,000 workers at the Big 3 U.S. automakers -- General Motors, Ford and Stellantis.
The United Auto Workers, or UAW, has vowed to launch a strike on Sept. 14 if the union and the automakers fail to reach an agreement by then.
Even UAW President Shawn Fain last month described the workers' set of demands as "audacious." He has defended the ambitious agenda in a series of public statements, citing billions in profits enjoyed by the Big 3.
The automakers, meanwhile, have largely rejected the demands. Only Ford has presented a contract proposal, offering a 9% wage increase over the term of the contract, plus a one-time payout that brings the total raise to 15%.
"Overall, this offer is significantly better than what we estimate workers earn at Tesla and foreign automakers operating in the U.S.," Ford President and CEO Jim Farley said in a statement on Thursday.
Ford and General Motors declined to respond to ABC News' request for comment.
In a statement, Stellantis told ABC News that discussions with the union's bargaining team "continue to be constructive and collaborative with a focus on reaching a new agreement that balances the concerns of our 43,000 employees with our vision for the future -- one that better positions the business to meet the challenges of the U.S. marketplace and secures the future for all of our employees, their families and our company."
Meanwhile, Ford said it looks "forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever."
In a statement on Thursday, General Motors Executive Vice President, Global Manufacturing, Gerald Johnson said: "The pace of negotiations is based on how quickly both parties resolve nearly 1,000 UAW demands, including more than 90 presented this week. Our goal remains the same -- to achieve an agreement without a disruption that rewards our team members and protects the future of the entire GM team."
As a potential strike approaches, here are some key UAW demands and what to know about them:
United Auto Workers members march in the Detroit Labor Day Parade on Sept. 4, 2023, in Detroit, Mich.
Bill Pugliano/Getty Images
The UAW has called for a 46% pay increase over the duration of a four-year contract, increasing top hourly wages to about $47 per hour.
Offering context for the extent of the pay increase, Fain has cited recent compensation increases for CEOs at the Big 3 as well as elevated inflation that has cut into purchasing power of workers.
"We went to Ford and proposed a double-digit wage increase, just like the Big 3 CEOs have received over the last four years," Fain said on Facebook Live on Thursday. "Because we know our members are worth the same and more."
"We also have a lot to make up for. In inflation adjusted dollars, our starting pay today is $10 an hour less than what it was in 2007," Fain added.
In response, Ford said that full-time employees would be well-compensated under its offer of a 9% wage increase over the term of the contract, plus a one-time payout that brings the total raise to 15%.
"Full-time permanent Ford employees at the top wage rate could be paid $98,000 – from wages, cost-of-living adjustment bonus, ratification bonus, profit sharing and overtime – in the first year alone," Farley said in a statement on Thursday.
One of the most eye-catching demands put forward by the UAW is a call for a 32-hour workweek at full-time pay.
The request arrives at a time when a growing roster of companies use a four-day workweek, fueling a movement that has accelerated amid a pandemic-era reconsideration of the workplace, experts previously told ABC News.
"We need to get back to fighting for a vision of society in which everyone earns family-sustaining wages and everyone has enough free time to enjoy their lives and see their kids grow up and their parents grow old," Fain said.
The counteroffer from Ford appears to preserve a five-day workweek. In addition, it keeps benefits such as paid vacation and family days at current levels set under a contract reached in 2019.
Under that deal, full-time permanent employees could reach a maximum of five weeks of paid vacation annually as well as two family days.
"We are committed to creating opportunity for every UAW worker to build a great career at Ford and to become a full-time permanent Ford employee with the good middle-class wages and benefits that come with it," Farley said.
Protections for workers if their plant closes
In addition to other reforms, the UAW has sought assurance that workers will keep getting paid if their manufacturing plant gets closed.
On top of that, the union has sought the right to strike in the event of a plant closure, giving such workers a source of leverage as the company winds down production.
"The Big 3 want the power to take our jobs and the products we build and move them to other countries where they can more easily exploit workers," Fain said. "That results in massive job loss that guts local economies and rips apart families as workers uproot themselves from their lives and homes to travel across the country to get another job."
Farley did not address this specific issue in a statement on Thursday but he emphasized the importance of Ford remaining competitive with other automakers.
"We will not make a deal that endangers our ability to invest, grow and share profits with our employees," Farley said. "That would mortgage our future and would be harmful to everyone with a stake in Ford, including our valued UAW workers."
ABC News' Meredith Deliso contributed reporting.
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