The United Automotive Workers Union (UAW) officially went on strike on Sept 1.5, 2023. The strike started because the contracts between the union and the car companies recently expired, walking out over the inability to agree on significant issues such as increases to their current salaries and benefits. UAW is seeking a 40% wage increase and has requested this since these three auto giants have seen massive profitability within the last decade and the chief executive’s rise in wages over the previous four years. Ford has agreed on the adjustments regarding the cost of living if inflation escalates again and the right to strike if the company closes plants.
UAW workers have walked out on GM (General Motors) and Stellantis, with around 13,000 other workers willing to step out at a minute’s notice. The union’s strategy is to make automakers unable to determine when or where work stoppages or shortages will occur, thus unable to find other workers to continue production. It also has another benefit regarding how long the UAW funds will last, which, at this rate, will be able to last 11 weeks.
The Friday before the strike became official, Ford laid off approximately 600 workers, and GM threatened to lay off 2,000 workers in Fairfax, Kansas, due to the Wentzville strike, which began the week before. GM said that they could not provide supplemental unemployment benefits due to the expiration of their latest contract.
The President of the UAW, Shawn Fain, said this past week, “Ford and GM have refused to make meaningful progress at the bargaining table.” The current employment of UAW workers is Ford’s Chicago plant, which currently employs 4,300 UAW union workers, and the GM Lansing plant employs around 2,300 workers. Altogether, these three auto giants use 150,000 UAW union members. This past week, 25,000 UAW members have been called upon to stop working and have done so.
Ford, GM and Stellantis are auto royalty and have been running production as often as possible. With the end of COVID-19 and several other logistical issues, the American auto industry has returned to normal, relying on UAW workers for their comeback. Altogether, these companies have enough cars to last them a short while, but soon enough, they will have the ability to handle supply and demand, slowing production time. Thus, buyers will then go to nonunion suppliers who will be able to supply them, even though the cost of their business will cost the dealers more. Analyst Sam Fiorani said, “A work stoppage of three weeks or more would quickly drain the excess supply, raising vehicle prices and pushing more sales to non-union brands.”
The UAW is holding all the cards for the incoming 11 weeks, and if the automakers do not decide what to do, they will have to halt production or slow everything down until they can figure out what to do. However, if the automakers have concluded a way to keep their show going without the need of the UAW, then the members of the UAW will not be able to return to their jobs. All that is known is that neither side seems to be in the mood for adaptability.
