Andy Kalmowitz
Fri, September 15, 2023
Democratic presidential nominee and former Vice President Joe Biden delivers remarks in the parking lot outside the United Auto Workers Region 1 offices on September 09, 2020 in Warren, Michigan.
The U.S. Chamber of Commerce, one of the nation’s most prominent business groups, has decided to blame President Joe Biden directly for the United Auto Workers’ strike, according to Politico. Unsurprisingly, the prominent business group decided it is not the fault of the companies workers are on strike against.
“The UAW strike and indeed the ‘summer of strikes’ is the natural result of the Biden administration’s ‘whole of government’ approach to promoting unionization at all costs,” Suzanne P. Clark, President and CEO of the U.S. Chamber of Commerce said in a statement.
We’ve previously reported that Biden has worked to brand himself as “the most pro-union president in history.” In what I can only assume is an effort to make everyone forget what Biden did to rail workers, his administration has put out reports this summer “underscoring the benefits of unionization” and the Labor Department has reportedly released rules that labor and employment watchers – including the Chamber of Commerce – have argued are favorable to unions. Despite this, the UAW has yet to endorse Biden. That reportedly comes down to concerns about unionized workforces being left out of the transition to electric vehicles.
The strike started at one plant each for Ford, General Motors and Stellantis after the union and the Big Three failed to agree on new contracts for auto workers. Right now, the UAW is doing a “Stand Up Strike” which targets just a few plants at a time. If the strike continues, more plants will be impacted. The UAW is demanding wages increase as much as 40 percent. Ford and GM have come closest to that number publicly offering 20 percent in recent days, but it wasn’t enough to avoid a strike.
The last UAW strike lasted 40 days and cost GM $3 billion. Things are looking very different this time.
Nora Naughton
Fri, September 15, 2023
Auto workers at the UAW last went on strike at GM in 2019.AP
UAW-GM workers were fighting plant closures in 2019.
Four years ago, about 46,000 GM workers went on strike for 40 days.
The last auto-worker strike targeted GM, not all three Detroit companies.
The United Auto Workers union is on strike again, but it looks much different this time around.
The United Auto Workers are initiating targeted strikes at all three Detroit car companies after both sides failed to come to an agreement before the contracts expired at 11:59 p.m. last night. It's the UAW's second strike in as many contract talks, but the circumstances are particularly unique this go-around.
Four years ago, when some 46,000 hourly workers at General Motors went on strike for more than a month, things looked much different for the auto union.
In 2019, UAW leadership was embroiled in a yearslong federal criminal probe, eroding trust with the rank-and-file membership. At the same time, an age-old issue for UAW workers – plant closures – provided the union with the opportunity to rally enthusiasm and forge more unity among members.
Typically, the UAW chooses what is referred to as a "lead company" or a "strike target" to set a pattern for bargaining at the other two companies (that's different with new UAW President Shawn Fain, who has said the Big Three are the target). The union chose GM in 2019 because of the plant closure issue and the need to negotiate the future of those factories and their workers.
Officially, the UAW went on strike in 2019 over pay, job security, and better benefits. But one of the main sticking points at the table was GM's decision to close four US factories, including a large assembly plant in Lordstown, Ohio.
The sides eventually agreed to a deal that saw GM investing billions of dollars in a battery joint venture in Lordstown, which unionized with the UAW in late 2022. In return, GM was allowed to shutter three other factories.
Reverberations in the industry
During the bitter, 40-day strike, the longest nationwide strike at GM since the 1970s, GM was forced to shutter several non-union plants as supplies from union-represented shops stopped coming through. In the end, GM said the 2019 UAW strike cost the company some $3 billion.
GM's suppliers were also hard-hit when orders all but dried up during the extended work stoppage. Several suppliers were also forced to idle their own plants and issue temporary layoffs without business from GM.
These work stoppages hit customers first, zapping supply for dealer repair shops and creating long waitlists for normally simple repairs.
The hit for customers didn't happen overnight, though. Even in the depths of the strike, dealers reported healthy inventory levels for the time of year. It wasn't until those stockpiles started dwindling at the end of 2019, just before the COVID-19 pandemic hit US shores, that GM dealers started to run out of cars.
What a resolution looked like
At the end of the 40-day GM strike in 2019, GM workers won considerable gains, including better wages, a clear path to full-time employment for temporary workers, and a hefty one-time signing bonus of $11,000 to partially make up for lost wages during the work stoppage.
A tentative agreement was reached on day 31 of the strike, typically signaling the end of a work stoppage. But union leaders at the time chose to continue striking even after reaching a tentative agreement with GM, deciding instead to wait until its members voted to approve the deal.
The reason for this at the time was that the agreement to allow GM to close Lordstown and other factories left many members still feeling nervous about the future. About 57% of GM workers eventually voted in favor of the agreement its leadership reached with the company.
Alexa St. John,Nora Naughton
Thu, September 14, 2023
Members of the UAW last went on strike in 2019.Reuters
Members of the United Auto Workers could strike on Friday, September 15 at midnight.
The latest news out of the union suggests all members might not strike at once.
If the UAW's approach is to target certain plants, automakers are still in trouble.
If members of the United Auto Workers union strike on Friday, as is looking likely, the impact on Ford, General Motors, and Jeep-maker Stellantis will be monumental — even if not every automaker or factory is targeted.
The auto workers' union and the Detroit 3 carmakers have been negotiating for months now, hoping to reach an agreement on new contracts before the hard deadline of Thursday, September 14 at 11:59 p.m.
The union is asking for increased wages, cost of living adjustments, the return of pensions, cutting its tiered work system (where pay is based on seniority), and more. But even after much back-and-forth with Ford, GM, and Stellantis, it appears the two sides may not reach an agreement by Thursday night, triggering a strike.
The UAW can strike in a few ways, but typically, members have gone on strike against just one of the three Detroit automakers rather than all three at once. An agreement reached at what is known as the "lead company" is then used as a pattern for agreements at the other two companies.
The union has targeted specific auto plants in the past, though it has been about 30 years since they used this approach.
This time around, the UAW has suggested a portion of its nearly 150,000 members are planning the targeted approach again — but at all three companies instead of just one.
"We will not strike all of our facilities at once," UAW President Shawn Fain said during a live-streamed speech on Wednesday. "We will strike all three companies, a historic first, initially at a limited number of targeted locations that we will be announcing."
Big ticket plants on the chopping block
That strategy could certainly hit the automakers where it hurts.
"At the beginning, a select few are going to strike and then as needed more are going to join in," Fain said. "We're going to hit where we need to hit and when we need to hit, we're going to hit to move mountains."
From the union's perspective, targeting the Detroit 3's factories where they churn out the most profitable products, especially SUVs and pickup trucks, is the most logical. While a lot of truck production has moved to Mexico in the last several years, all three Detroit companies have some form of pickup truck production based in the US.
Ford, GM, and Stellantis have capitalized off ultra-high margin vehicles in recent years. All three Detroit car makers have whittled down their lineups to abandon cheaper sedans and starter cars in lieu of luxury SUVs and pickups.
These moves have allowed Ford, GM, and Stellantis to cut costs on manufacturing (sometimes through plant closures) and vehicle development while funneling more cash toward new technologies like electric vehicles. With fewer factories and smaller — albeit more profitable — lineups, even a targeted strike at any of the Detroit three could have a disastrous effect.
Even as inventories build up and smaller cars start to come back, automakers are still being sneaky — holding supply and deals close to their chest. Automakers have even been willing to sacrifice market share for the profits they get from these costly cars.
If the UAW cuts off the Detroit auto companies' precious money-making factories, that could have a broader impact.
Impact across the board
Not only would a work stoppage impact the Detroit 3, the effects would reverberate throughout the industry.
Especially in the last decade as the automotive industry has globalized its supply chain, the manufacturing process at any single factory is just one part in a complex web. Even a single plant going down can create a domino effect across the industry, as seen several times throughout the pandemic when minor closures due to Covid outbreaks would leave lasting impacts on sales and inventory.
If the UAW strike takes down Detroit 3 production, that will impact the hundreds of suppliers that provide parts to these companies. Suppliers struggled after the last UAW strike, during which workers halted production at GM for 40 days.
This could be much more substantial — and if the Detroit 3 suppliers are in trouble, any other automaker that relies on those parts companies to keep their assembly plants running will see an impact, too. That's where the threat to the whole industry comes in.
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