The country’s largest auto union is set to strike after negotiations with the Big Three automakers came up short.
The United Auto Workers union announced the strike plan Thursday night, around two hours before the deadline for the union and automakers to reach an agreement was reached. UAW President Shawn Fain said there would be strategically targeted strikes at specific plants instead of a complete across-the-board work stoppage.
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The numbers involved with the action are substantial. The union represents some 150,000 workers at General Motors, Ford, and Stellantis, the company that took over Chrysler’s operations — collectively, the auto companies are referred to as the “Big Three.”
There are big business and economic implications of the move.
The last time there was a UAW strike, a six-week stoppage against General Motors in 2019, it cost the automaker $3.6 billion. Additionally, Michigan experienced a recession during that quarter because of the high volume of GM workers who are employed there.
The decision to strategically strike is likely being done to ratchet up pressure on the Big Three while also insulating as many UAW members as possible.
Just a 10-day work stoppage at the plants would result in $900 million in losses for UAW workers and $1 billion in losses for the automakers themselves. In total, it would cost the U.S. economy more than $5.5 billion, according to an estimate from the Anderson Economic Group
While it’s not exactly clear what the cost of such targeted strikes would, Patrick Anderson, the CEO of the Anderson Economic Group, told the Washington Examiner this week there are “considerable risks” for both the UAW and automakers with the strategy.
“The idea of ‘targeted strikes’ ...is clearly intended to keep the strike going longer,” Anderson said. “But it has the potential risk of causing a shutdown at many points, not just the ones that they pick as strike targets.”
The UAW wants major pay boosts for hourly workers over the life of the four-year contract being negotiated. Union leadership also wants there to be a cost-of-living allowance tied to inflation, particularly given the massive price increase notched over the past few years.
“Yes, we’re demanding double-digit pay raises. Big Three CEOs saw their pay spike 40% on average over the last four years. We know our members are worth the same and more,” the union said on its website.
The UAW also wants to eliminate wage tiers and provide workers a better work-life balance, including more time off for members to spend with families.
The strike that Fain announced was previously approved by an overwhelming majority of union members. The UAW voted by a 97% margin to give the green light to a strike.
The strike isn’t entirely surprising given that Fain was recently elected to lead the UAW and narrowly ousted the union’s previous president by running a campaign in part pushing for a more confrontational stance in contract negotiations.
President Joe Biden also faces a challenge with the strike. He has touted himself as the most pro-union president in history and doesn’t want to lose those bona fides by appearing to land on the side of the automakers. Blue-collar union members make up a big chunk of the electorate in key swing states like Pennsylvania and Michigan.
At the same time, a protracted and messy strike would have negative effects on the economy — already a political vulnerability for Biden. It would give the GOP more ammo to attack Biden for allowing such a major economic impediment to occur under his guidance and could also hurt the president’s economic approval.
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White House officials have been walking a fine line with their messaging, urging both sides to come to an agreement that is fair to workers. White House press secretary Karine Jean-Pierre addressed the issue at a news conference this week.
“The President believes that auto workers deserve a contract that sustains middle-class jobs,” said Jean-Pierre. “He’s encouraged the parties to stay at the table and to work 24-7 to get a win-win agreement that keeps UAW workers at the heart of our auto future and ensures UAW jobs are good middle-class jobs.”