What a potential UAW strike could mean for the supply chain
06:28 The head of the United Auto Workers warned Wednesday that the union plans to go on strike against any Detroit automaker that hasn’t reached a new agreement by the time contracts expire next week. “That’s the plan,” President Shawn Fain responded when asked if the union would strike any of the companies that haven’t reached a tentative deal by the time their national contracts end.
A strike against all three major automakers — General Motors, Stellantis, and Ford — could cause damage not only to the industry as a whole but also to the Midwest and even the national economy, depending on its duration. The auto industry accounts for about 3% of the nation’s economic output. A prolonged strike could also result in higher vehicle prices. In an interview with The Associated Press, Fain left open the possibility of avoiding a strike. He acknowledged, more explicitly than before, that the union will have to make concessions to reach agreements. Contracts with the three companies will all expire at 11:59 p.m. on September 14.
“There’s a lot of back and forth bargaining,” Fain said, “and naturally, when you go into bargaining, you don’t always get everything you demand. Our workers have high expectations. We made a lot of sacrifices during the economic recession.”
Still time to strike a deal
In the interview, Fain reported some progress in the negotiations, saying the union will meet with GM on Thursday to hear the company’s response to the UAW’s economic demands. In addition, discussions are underway with Ford on wages and benefits. Stellantis, formerly Fiat Chrysler, has yet to provide a counteroffer on wage and benefit demands, he said. Stellantis declined to comment on Wednesday.
Businesses near auto plants plan to support UAW members if they strike
02:07 Last week, the union filed charges of unfair labor practices against Stellantis and GM, and it said Ford’s economic offer fell far short of its demands.
Marick Masters, a business professor at Wayne State University in Detroit, said he thought Fain’s latest remarks suggest “that he is opening up to the realities of bargaining” as the strike deadline nears. “As you get close to the deadline,” Masters said, “you begin to realize the importance of trying to resolve a problem rather than make a point. Strikes are painful, especially for workers, and also for companies.” Fain’s willingness to acknowledge publicly that he won’t achieve all the union’s demands shows there is more flexibility in his approach than previously thought, according to Masters. Some signs of movement in the negotiations have emerged, raising the possibility that an agreement might be reached with one automaker that would set the pattern for the others. “I think if they can avoid having to go out on strike and still get a very good bargain, I think they’ll be better off,” he said.
The union’s demands include 46% across-the-board pay raises, a 32-hour week with 40 hours of pay, restoration of traditional pensions for new hires, union representation of workers at new battery plants, and a restoration of traditional pensions. Top-scale UAW assembly plant workers make about $32 an hour, plus annual profit-sharing checks.
“Wages aren’t the problem”
In his remarks to the AP, Fain argued that worker pay isn’t what has driven up vehicle prices. The average price of a new car has skyrocketed to over $48,000 on average, in part due to the global shortage of computer chips causing scarce supplies. “In the last four years, the price of vehicles went up 30%,” he said. “Our wages went up 6%. There were billions of dollars in shareholder dividends. So our wages aren’t the problem.”
While Fain acknowledged that a strike by up to 146,000 members against all three major automakers is a real possibility, he emphasized that the union doesn’t want to strike and would prefer to reach new contracts with them.
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