The United Auto Workers (UAW) has launched a strike against the ‘Big Three’ automakers in the USA, namely General Motors, Ford & Stellantis. As per reports, UAW leaders called for a work stoppage at three factories: a GM plant in Missouri, a Stellantis facility in Ohio and a Ford assembly plant in Michigan. The strike came after talks around compensation and benefits collapsed.<\/p>\n
According to reports, the union has demanded a wage increase of up to 40% over the course of the next 4-year contracts, full pay for 32-hour work weeks, better retirement pensions and improved health care. Shawn Fain, UAW President, stated, “What\u2019s driving members\u2019 expectations are the Big Three\u2019s profits”.<\/p>\n
Also, another reason for the steep wage increase by UAW is the high inflation since securing current contracts back in October-December 2019. Reports mention that since the start of the current contracts, hourly wages among motor vehicle & parts manufacturers have grown to an average of $27.99, while across all other industries, the average has grown to $33.82. However, inflation is said to have eroded most of these gains. As per previous UAW contracts dating back decades, many autoworkers had received cost-of-living raises, which kept pace with inflation, but these provisions were jettisoned after the 2008 financial crises upended the auto industry.<\/p>\n
Reports also state that workers haven’t been rewarded as well as the executives running their company during the period of high profits. According to a public filing, the compensation of Mary Barra, Head of GM, grew by 32.5% from 2018 to 2022, during the same period, a median GM employee’s pay grew by just 2.8%. Similarly, at Ford, CEO Jim Farley received an 18% pay rise between 2018 to 2022, while the company’s employees had a pay rise of 16.1%.<\/p>\n
A UAW Local 862 member at Ford’s truck plant in Kentucky, said, “I feel like this money should be spread around. Not evenly per se, but show us the same gratitude you\u2019re showing the CEO.”<\/p>\n
The three companies have made their counter-offers, however, they fall short of UAW’s 40% target. Stellantis proposed a 14.5% boost in wages, while Ford offered a wage hike of 20%. However, both were rejected on grounds of being “deeply inadequate” and “barely making up for the past raises combined with inflation”, respectively.<\/p>\n
The companies state that they need to balance their labour costs with future EV infrastructure investments. Stellantis put out a statement saying, “At 40% greater cost than conventional technology, passing the additional cost of electrification on to consumers is not an option as it puts EV affordability at risk for middle-class buyers.”<\/p>\n
As per reports, the UAW is supporting its picket lines by paying striking members $500 a week. Also, as per a Goldman Sachs Equity Research estimate, the union’s $850 million fund would last around 11 weeks if all the 146,000 UAW members went on strike at once.<\/p>\n
The union also stated that if the negotiations remain deadlocked, they could call for more walkouts, which could hurt the revenues of the three automakers. The Goldman Sachs research states that in the event of a full strike, GM and Ford could lose as much as $2.5 billion – $3 billion every week.<\/p>\n