Detroit auto workers plan to walk off the job Friday if their union leaders can’t agree on a new labor contract with Ford, General Motors and Stellantis.
United Auto Workers President Shawn Fain said during a Facebook Live event late Wednesday that members will use a so-called “stand up” strike strategy, in which workers “in a limited number of targeted locations” will be ready to walk off their posts starting at midnight . prior to Friday morning. The layoffs will happen at assembly plants and parts distribution centers across the big three automakers, he said.
“Then, based on what happens in negotiations, we will announce more locals that will bw called to stand up and strike,” Fain said. “These locals will join others who are already on strike, so our strike in every company will continue to grow over time.”
Fain said more employees will strike if the Big Three halt negotiations or continue to send “insulting offers” that don’t meet union members’ wishes.
If both sides fail to reach a new deal, it would mark the first UAW strike since auto workers walked out of GM in 2019 and culminate in the nation’s largest strike among active employees in 25 years. The strike could cause a spike in car prices and result in $5.6 billion in financial losses for automakers, according to a Forecast and reduce the country’s GDP by as much as 0.3%, according to Oxford Economics.
What are their requirements?
At the top of the UAW’s list of demands are big wage increases for members.
The UAW this week began asking for a 46% pay increase over four years. But the union has backed that figure and is now asking for a 36% wage increase, said Garrett Nelson, an auto analyst for CFRA Research. That would play out as an immediate 18% increase, followed by annual increases of 4% or 5% for the remainder of the contract, Nelson said in a research note on Tuesday.
“The most generous offer in 80 years”
The Big Three have not been willing to fully meet the unions’ demands, but said they have made reasonable counter-offers and are willing to negotiate further. The companies claim they are under enormous pressure to keep costs and car prices low in order to compete with Tesla and overseas automakers.
Ford Motor CEO Jim Farley said earlier this week that the company offered UAW members’ pay raises, elimination of tiers, inflation protection, five weeks of vacation, 17 paid vacation days and larger contributions to retirement — a package he described as the “most generous offer in 80 years.” Farley said Ford made four offers in total, but he hasn’t heard back from the UAW since its latest offer.
“It’s hard to negotiate a contract when there’s nobody to negotiate with,” he said Wednesday night. “It was fully competitive with all the UAW negotiated settlements, sometimes after strikes, with other industrial companies and we heard nothing.”
Union demands also include retirement benefits for all employees; limiting the use of temporary workers; more paid time off, including a four-day work week; and more job protections, including the right to strike over plant closures.
The UAW also wants the two-tier pay system present at all three companies to be eliminated because members say it unfairly reduces some of their colleagues to second-class workers. Upper-tier workers — anyone who joined the company before 2007 — earn about $33 an hour, while anyone who joined after that year is part of the lower tier, earning about $17 an hour. Lower-level employees also do not receive defined-benefit pensions, and their health benefits are less generous.
Paul Sancya/AP
Adam Hersh, senior economist at the Economic Policy Institute, said the Big Three can afford to pay workers more. In a blog post On Tuesday, Hersh noted that the Big Three made a combined $250 billion in profits between 2013 and 2022 and expect to bring in more than $32 billion in additional profits by 2023. Hersh said in the post that the Big Three argue that it would putting workers at risk of paying more. their efforts to produce more electric cars.
“Despite all the company’s tricks, there is more than enough money for them to make power investments, pay their workers a fair share and maintain healthy profits,” Hersh wrote in the post.