Only three plants with 12,700 employees were initially affected on Friday. But the union warned that if there was no agreement in the collective bargaining negotiations, the labor dispute could escalate into one of the largest in decades: “If we have to go all out, we will,” said UAW boss Shawn Fain.
The strikes are the current climax of the dispute between Fain and the executives of the three Detroit-based automakers. For the first time, they are going on strike at the same time, whereas previously negotiations were often carried out with only one company and the others then followed suit in the best case scenario. A full strike could cost each of the three carmakers up to $500 million (466 million euros) in profits per week. The previous collective agreement expired on Friday night. The strikes will initially halt production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado, as well as other popular and profitable models.
Greater share of profits required
In the current conflict, the UAW wants to get a larger share of the profits from the combustion vehicle business and more job security for its members as a result of the switch to electric cars. When it comes to money, the manufacturers have improved their offers and are now offering between 17.5 and 20 percent more for a term of four and a half years. But that’s only about half of what the UAW is demanding. The union also wants to abolish the staggered wage system, in which newly hired employees only reach the same salary level as long-serving employees after eight years. The UAW represents nearly 150,000 employees in the strike – 57,000 at Ford, 46,000 at GM and 43,000 at the Chrysler brand, which is part of the European Stellantis group.
Fain said the UAW would forego more costly, company-wide strikes for now, but is keeping all options open. The 54-year-old, who often quotes from the Bible and was only narrowly elected as UAW chief, described the collective bargaining dispute as a battle to reorganize the forces between workers and global companies: “We are fighting for the well-being of the whole working class and the poor”.
Union must maintain a sense of proportion
However, the union must also maintain a sense of proportion. Its fund, from which it pays strike pay for its members, is rather limited at $825 million. “The UAW needs to be careful not to overdo it,” wrote CFRA Research analyst Garrett Nelson. “The Detroit Three’s balance sheets are brimming with cash, and they can probably ride this out longer than the workers.”
GM expressed disappointment over the strikes and announced that it would continue negotiations. A senior GM executive had previously said the UAW claims would cost GM $100 billion. That is more than twice the company’s market value and cannot possibly be compensated. Ford said the UAW’s latest proposals would double U.S. labor costs and make Ford uncompetitive with Tesla and other non-union manufacturers. Stellantis said the company had been placed in “emergency mode.” Everything will be done to protect the group and its operations in North America. Stellantis left it open what that means.
The dispute, which has been simmering for months, has long been an issue in politics. US President Joe Biden, who is running for re-election next year, has called on both sides to reach an agreement and has spoken to the UAW and manufacturers’ management, according to his office. According to the Washington Post, the US government is preparing emergency aid to help smaller suppliers if they suffer from the strikes.
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