Workers Strike at All 3 Detroit Automakers, a New Tactic to Squeeze Companies for Better Pay
DETROIT (AP) — Nearly one in 10 of America’s unionized auto workers went on strike Friday to pressure Detroit’s three automakers into raising wages in an era of big profits and as the industry begins a costly transition from gas guzzlers to electric vehicles.
By striking simultaneously at General Motors, Ford, and Chrysler owner Stellantis for the first time in its history, the United Auto Workers union is trying to inflict a new kind of pain on the companies and claw back some pay and benefits workers gave up in recent decades.
The strikes are limited for now to three assembly plants: a GM factory in Wentzville, Missouri; a Ford plant in Wayne, Michigan, near Detroit; and a Jeep plant run by Stellantis in Toledo, Ohio.
The workers received support from President Joe Biden, who dispatched aides to Detroit to help resolve the impasse and said the Big 3 automakers should share their “record profits.”
Union President Shawn Fain says workers could strike at more plants if the companies don’t come up with better offers. The workers are seeking across-the-board wage increases of 36% over four years; the companies have countered by offering increases ranging from 17.5% to 20%.
Workers out on the picket lines said they hoped the strikes didn’t last long, but added that they were committed to the cause and appreciated Fain’s tough tactics.
“We didn’t have a problem coming in during COVID, being essential workers and making them big profits,” said Chrism Hoisington, who has worked at the Toledo Jeep plant since 2001. “We’ve sacrificed a lot.”
In its previous 88-year history, UAW had always negotiated with one automaker at a time, limiting the industrywide impact of any possible work stoppages. Each deal with an automaker was viewed as a template, but not a guarantee, for subsequent contract negotiations.
Now, roughly 13,000 of 146,000 workers at the three companies are on strike, making life complicated for automakers’ operations, while limiting the drain on the union’s $825 million strike fund.
If the contract negotiations drag on — and the strikes expand to affect more plants — the costs will grow for workers and the companies. Auto dealers could run short of vehicles, raising prices and pushing customers to buy from foreign automakers with nonunionized workers. It could also put fresh stress on an economy that’s been benefiting from easing inflation.
The new negotiating tactic is the brainchild of Fain, the first leader in the union’s history to be elected directly by workers. In the past, outgoing leaders picked their replacements by choosing delegates to a convention.
But that system gave birth to a culture of bribery and embezzlement that ended with a federal investigation and prison time for two former UAW presidents.
The combative Fain narrowly won his post last spring with a fiery campaign against that culture, which he called “company-unionism,” which he said sold out workers by allowing plant closures and failing to extract more money from the automakers.
“We’ve been a one-party state for longer than I’ve been alive,” Fain said while campaigning as an adversary to the companies rather than a business partner.
David Green, a former local union leader elected to a regional director post this year, said it’s time for a new way of bargaining. “The risks of not doing something different outweigh the risks of doing the same thing and expecting a different result,” Green said.
During his more than two-decade career at General Motors, Green saw the company close an assembly plant in Lordstown, Ohio, that employed 3,000 workers. The union agreed to a series concessions made to help the companies get through the Great Recession. “We’ve done nothing but slide backward for the last 20 years,” Green said, calling Fain’s strategy “refreshing.”
Carlos Guajardo, who has worked at Ford for the past 35 years and was employed by GM for 11 years before that, said he likes the new strategy.
“It keeps the strike fund lasting longer,” said Guajardo, who was on the picket line in Michigan Friday before the sun came up.
The strikes will likely chart the future of the union and of America’s homegrown auto industry at a time when U.S. labor is flexing its might and the companies face a historic transition from building internal combustion automobiles to making electric vehicles.
The walkouts also will be an issue in next year’s presidential election, testing Biden’s claim to being the most union-friendly president in American history.
The limited-strike strategy could have ripple effects, GM CEO Mary Barra said Friday on CNBC.
Many factories are reliant on each other for parts, Barra said. “We’ve worked to have a very efficient manufacturing network, so yes, even one plant is going to start to have impact.”
Even Fain has called the union’s demands audacious, but he says the automakers are raking in billions and can afford them. He scoffs at company claims that costly settlements would force them to raise vehicle prices, saying labor accounts for only 4% to 5% of vehicle costs.
In addition to the wage increases, union negotiators are also seeking: restoration of cost-of-living pay raises; an end to varying tiers of wages for factory jobs; a 32-hour week with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans; and pension increases for retirees, among other items.
Starting in 2007, workers gave up cost-of-living raises and defined benefit pensions for new hires. Wage tiers were created as the UAW tried to help the companies avoid financial trouble ahead of and during the Great Recession. Even so, only Ford avoided bankruptcy protection.
Many say it’s time to get the concessions back because the companies are making huge profits and CEOs pay packages are soaring.
Looming in the background is the historic transition to electric vehicles. The union wants to make sure it represents workers at joint-venture electric vehicle battery factories the companies are building so that members have jobs making vehicles of the future.
Top-scale assembly plant workers make about $32 per hour, plus large annual profit-sharing checks. Ford said average annual pay including overtime and bonuses was $78,000 last year.
The Ford plant that’s on strike employs about 3,300 workers, and it makes Bronco SUVs and Ranger midsize pickup trucks. The Toledo Jeep complex has about 5,800 workers and manufactures the Jeep Wrangler SUV and Gladiator pickup. GM’s Wentzville plant has about 3,600 workers and makes the GMC Canyon and Chevrolet Colorado midsize pickups, as well as the GMC Savana and Chevrolet Express full-size vans.
The union didn’t go after the companies’ big cash cows, which are full-size pickup trucks and big SUVs, instead targeting plants that lower profit margin vehicles. But that could change.
Automakers say they’re facing unprecedented demands as they develop and build new electric vehicles while at the same time making gas-powered cars, SUVs and trucks to pay the bills. They’re worried labor costs will rise so much that they’ll have to price their cars above those sold by foreign automakers with U.S. factories.
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