The United Auto Workers union and the three Detroit automakers have less than two weeks to negotiate a new labor contract, and some kind of strike seems increasingly likely.
The union’s president, Shawn Fain, has prepared rank-and-file members to be ready to walk off the job if the union’s long list of demands for improved wages and benefits are not met.
A strike against one of the companies, especially a prolonged stoppage, could send an economic shock to some Midwestern states and harm the profits of General Motors, Ford Motor or Stellantis. GM workers walked out for 40 days in 2019 before reaching a settlement.
A strike against all three — a move the union has not yet taken but one Mr. Fain said he was prepared to call for this year — could have a dramatic impact on the broader US economy.
“If that were to happen, even a short strike would affect economies across Michigan and across the country,” said Patrick Anderson, the chief executive of the Anderson Economic Group in East Lansing, Mich.
The talks are playing out as automakers spend tens of billions of dollars to switch to electric vehicles, which require fewer workers to assemble than traditional cars and trucks powered by fuel The terms of the new contract will determine how autoworkers and companies fare in an EV-centric industry.
At the same time, big wages and benefits could provide a tailwind for a union movement that is gaining strength in some industries.
There are also political stakes. President Biden declared that “the UAW deserves a contract that preserves the middle class” and named a White House liaison to the union and the automakers. But the UAW has withheld an endorsement of his re-election bid for now, due to concern on the part of the union over EV-related jobs created with federal subsidies.
A deal is still possible before the contracts expire on Sept. 14, and talks could continue beyond that date without a walkout. But Mr. Fain has repeatedly said he views Sept. 14 as a deadline — the day a strike could begin. He was elected to the UAW presidency last year as an insurgent, ousting the incumbent on a vow to take a more combative and confrontational approach to negotiations than his predecessors.
“President Fain has declared war, and that usually means there’s going to be a fight, and that fight is going to be a strike,” said Sam Fiorani, the vice president of global vehicle forecasting at Auto Forecast Solutions, a market researcher. “The UAW leadership is in a position now where they have to prove to the members that they are fighting for them, so there probably won’t be a strike.”
The auto industry as a whole, including foreign-owned companies with operations in the United States, makes up about 3 percent of the country’s gross domestic product. A 10-day strike against the three Detroit automakers would result in total wage losses of $859 million and manufacturers’ losses of $989 million, according to estimates by Mr. Anderson’s company.
In August, Mr. Fain sent each company a list of demands, including higher wages, improved benefits, a continuation of regular cost-of-living wage bumps to offset the impact of inflation and an end to a wage structure that leaves new employees. making a third less than veteran workers. Mr. Fain proposed up to a 40 percent pay increase, noting that the chief executives of each of the companies had their compensation packages increase significantly in the last four years.
He also called for contract provisions that would require automakers to pay workers to perform community service if their plant closes, describing it as a way to prevent companies from closing factories and to protect towns and local economies from the devastation of losing a major employer.
“Manufacturers can absolutely afford some of those demands, but the more they get, the less competitive the companies are,” Mr. Fiorani said.
In a video message streamed on Facebook on Thursday, however, Mr. Fain said the union and the automakers remained far apart. Ford, he said, offered wage increases and other provisions that “insulted” the UAW.
In a statement, Ford said it offered a 9 percent wage increase and a one-time lump-sum payment that, combined, would increase a worker’s earnings by 15 percent over the four-year contract. . Mr. Fain said the lump-sum payment helped but did not improve a worker’s income in the long run.
The UAW and Ford are also at odds over profit-sharing bonuses, the use of temporary workers, cost-of-living wage increases, retiree health care and several other matters.
Mr. Fain said GM and Stellantis did not make counteroffers to the union’s proposals, and the UAW filed a complaint with the National Labor Relations Board alleging the two companies were not negotiating in good faith.
“I know this update is annoying, and believe me when I say I’m fed up,” he said. “Our goal is not to strike. Our goal is to negotiate a fair contract, but if we have to strike to get economic and social justice, we will.
GM said it was “surprised and strongly refuted” the charges in the NLRB complaint. “We are very focused on negotiating directly and in good faith with the UAW and making progress,” Gerald Johnson, GM’s vice president of global manufacturing, said in a statement.
Stellantis was “disappointed to learn that Mr. Fain was more focused on filing frivolous legal charges than actually negotiating a settlement,” the company said in a statement. “We will vigorously defend this indictment when the time comes, but for now, we are more focused on continuing to negotiate in good faith for a new settlement.”
In recent weeks, workers have organized several dozen rallies and other gatherings to prepare for picketing. “I think the membership is energized,” said Christine Bostic, a battery tester at a GM electric vehicle plant in Detroit. “The facts are on our side. If there is talk of a strike, I am ready for that.”
To soften the impact of a stoppage, the union has amassed a strike fund of $825 million. It plans to pay striking workers $500 per week and cover their health insurance premiums while they are out of work.
In recent days, Mr. Fain has joined the union’s negotiating teams in their talks with each of the automakers, an unusual move. Typically, the UAW president has no direct role until the final days or hours of negotiations.
On Wednesday, he took part in discussions with Stellantis, where tensions between the two sides were high. When Stellantis responded to Mr. Fain’s demands with a list of cost concessions it wanted from the union, Mr. Fain took to Facebook to denounce them, relegating the document to a wastebasket.
Decades ago, when the UAW had more than a million members and the Big Three — GM, Ford and Chrysler, now part of Stellantis — had almost no foreign competition, a union strike could shut down a large portion of the United States economy. .
Today, the union is much smaller. GM, Ford and Stellantis employ about 150,000 UAW workers, and those companies produce just over 40 percent of the cars and trucks sold in the US market.
But the union entered this year’s talks in a stronger negotiating position than in previous years. In the past, Detroit companies struggled hard against foreign rivals that operated nonunion plants in the South, such as Toyota and Honda, and had a significant cost advantage. In most of the last few contracts, GM, Ford and Stellantis had to get concessions on wages and benefits to survive.
Over the past 10 years, however, all three companies have posted record profits, thanks in part to concessions they won from the union as well as a shift in consumer preferences toward high-margin trucks and large sport utility vehicle.
In the first half of this year, Ford made $3.7 billion and GM made $5 billion. Stellantis reported revenues of 11 billion euros (about $11.9 billion).
In the past, the UAW has chosen one company – it was GM four years ago – as the “target” to focus the talks on. Mr. Fain said the union could target all three companies this time, but many analysts think the union will eventually choose Stellantis. Adding to the difficulties between the company and the union, their talks involved a plant in Belvidere, Ill., that Stellantis had shut down and the union wanted the company to reopen.
Getting Stellantis to reopen the plant was a critical task for Mr. Fine. Four years ago, GM closed a plant in Ohio and the UAW failed in its efforts to push the company to reopen it. During his presidential campaign, Mr. Fain promised members that his tougher approach would be successful this time.
The union may get a hand in this battle from the federal government. On Thursday, the Energy Department said it had made $2 billion in grants and $10 billion in loans available to auto companies to convert existing factories that make gasoline-powered cars and trucks to become plants that produce hybrid and electric vehicles.
Stellantis, like GM and Ford, intends to introduce several more electric models in the next few years and will likely need to retool some plants to make them. It is already building a battery plant in Indiana for its EV push.
Mr. Fiorani suggested that Stellantis might decide to overhaul the Belvidere plant to produce electric models. “Stellantis may find a product that goes there,” he said. “For the UAW to really win something, it has to be the electric cars that Stellantis plans to produce within a few years.”
