Tensions are running high after contract discussions between auto workers and the nation’s largest automakers got off to a rocky start. It could all end with higher wages for workers—or a huge strike that upends the nation’s automotive supply chain.
DETROIT—About 150,000 auto workers nationwide are threatening to go on strike as tensions rise amid contract talks between major automakers and the United Auto Workers (UAW) union.
The union’s contracts with General Motors, Ford, and Stellantis all expire at 11:59 p.m. on Sept. 14. UAW President Shawn Fain has told workers they should all be willing to go on strike to make major gains—including higher wages, restored pensions for new hires, and other benefits.
And in Michigan, that means thousands of employees of Detroit’s biggest car companies could walk off the job and hit the streets in protest if a deal isn’t reached within the next month.
Here’s the Deal:
The UAW represents a total of about 146,000 workers at the three auto companies nationwide—including thousands of employees across dozens of manufacturing facilities in Michigan. Hundreds of thousands of retired autoworkers are also represented by the union nationwide.
Legally binding contracts between those auto workers and the Big Three automakers spell out the terms of and compensation for their employment—including raises, pensions, and benefits. Previous contracts have essentially set the standard for blue-collar jobs across the country.
As the industry makes a historic transition to electric vehicles, automakers will need thousands of workers to staff their battery plants and other new manufacturing projects nationwide. And under the leadership of newly elected President Shawn Fain, the UAW sees this year’s contract negotiations as a crucial opportunity to ensure representation in the industry’s jobs of the future.
Contract talks officially began last week between the UAW and two of the automakers, Ford and Stellantis, a company that was formed from the merger of Fiat Chrysler and PSA Peugeot. Negotiations with the largest US automaker, General Motors, are also set to begin this month.
And ahead of the talks, Fain has been testing out some much more combative messaging than in years past, when union leaders generally avoided speculating about the possibility of a strike.
“Whether or not there is a strike is up to Ford, General Motors and Stellantis because they know what our priorities are. We’ve been clear,” Fain said in a Facebook Live broadcast last month.
What’s on the Table?
The negotiations mark the first big test for Fain, who is the first UAW president to be chosen by a direct vote of its members. He has argued that worker wages have been stagnant for years after the union made concessions in 2008 to help automakers survive the Great Recession.
Since his election in March, Fain has also been a vocal proponent of pay raises for workers, the elimination of wage tiers, and the restoration of cost-of-living pay bumps and pensions for new hires—both of which were eliminated years ago when automakers were struggling financially.
He also wants to see retiree health coverage benefits increased and has asked that automakers pay workers for doing community service or other work if their plants are closed—an apparent restoration of the much maligned jobs bank that was eliminated in 2009. Fein has also proposed a 32-hour work week so that union members can spend more free time with their families.
Executives at all three companies have generally contended that their wages, profit sharing, health care, and benefits are already the best in the business. Top-scale production workers at the companies can earn about $32 per hour, in addition to benefits. Many auto workers earn far less, however, with the starting wage beginning at roughly $18 an hour across the Big Three.
Andrea Repasky, who works at a GM plant in Indiana, told the Associated Press that wages haven’t risen much in the past decade. She doesn’t think the union will get everything back in one contract. But she’s at least hoping for a significant raise and cost-of-living increases.
“I would probably say that they’re going to have to maybe meet us halfway,” she said of GM. “Because we really gave up a lot to keep the company afloat.”
GM, Ford, and Stellantis claim they’ve been forced to limit their spending, since they’re investing heavily to develop and build electric vehicles and open new factories across the country, but all three companies have still recorded massive billion-dollar profits in recent quarters.
Seeking to place the burden on the automakers, Fain has argued that any strike would ultimately be caused by the companies themselves, which collectively generated net income of more than $164 billion over the past decade. Last month, Fain suggested that workers were in a position to score major gains “but only if our members get organized and are ready to strike.”
Collectively, the Big Three made $20.7 billion in net profits in the first half of this year while worker pay has remained stagnant or regressed, Fain has argued. He has also railed against corporate paychecks, noting that it would take 16 years for a newly hired worker at GM’s joint venture battery plant in Ohio to make as much as CEO Mary Barra makes in one week.
An Electric Future
Among Fain’s biggest priorities for union members: Getting a foot in the door at new battery plants, and then securing wages that exceed the $32 an hour that’s paid now at UAW plants.
“A new industry is being born,” Fain said in a video message to UAW members. “This is our defining moment. Our communities and our country deserve good, safe, living-wage union jobs.”
All three automakers have announced plans to build joint-venture factories with battery companies—including in Michigan, which now leads the nation in electric vehicle production.
Once gas-powered vehicles are phased out, the union views these plants as places where the automakers will seek to move thousands of workers who currently make engines and transmissions. Analysts expect EV sales to surge to about 40% of new vehicle sales by 2030.
Because EVs are simpler to build, it takes fewer workers to produce them. As a result, workers who now assemble vehicles may need other places to work, or could lose their jobs altogether.
Harley Shaiken, a professor emeritus specializing in labor at the University of California Berkeley, told the Associated Press that the industry is undergoing a seismic shift akin to the introduction of the assembly line, with new competitors and huge capital outlays for EVs.
Automakers are investing billions while initially losing money on EVs, he said. At the same time, their continuing work on combustion engines is paying their bills. Automakers don’t want workers to go on strike either, but the companies likely feel the need to keep wages and other costs in check to stay competitive with non-union companies, Shaiken said.
Workers at GM’s Ultium Cells plant near Warren, Ohio, a joint venture with LG Energy Solution, have already voted to join the UAW. But the union says the plant is paying just $16.50 per hour to start, with a top wage of about $20 after seven years. That’s far lower than UAW production workers make. Fain labeled it a “race to the bottom” amid the ongoing negotiations.
“These should be higher wages than our production standards, not lower,” Fain said.
The Bigger Picture
All told, Michigan is home to about 175,000 auto workers and automotive parts producers. The state is also responsible for about 20% of all US auto production, more than any other state in the nation. And the industry is only getting bigger. Since Gov. Gretchen Whitmer took office in 2019, companies have announced more than 30,000 new automotive jobs across the state.
A halt in vehicle production in Michigan would reportedly result in millions of dollars in financial losses and leave a lasting impact on the supply chain—not just for the Big Three, but for the economy as a whole, including smaller parts suppliers that rely on bigger brands to survive.
What’s the Latest News?
Earlier this week, Fain accused Stellantis of seeking concessions in contract talks when the union wanted gains—further fueling speculation of a September strike among autoworkers.
In a statement, Fain said Stellantis broke a pledge not to seek givebacks in the latest round of talks, in which the union is seeking more than 40% general pay raises over four years. The union later clarified that the demands apply equally to all three automakers, and that singling out complaints against Stellantis was not an indication the UAW picked the company for a strike.
Still, Marick Masters, a business professor at Wayne State University in Detroit, told the Associated Press there is “deep friction” between Stellantis and the UAW—particularly because some employees are scheduled to work 84-hour work weeks. He said Stellantis also wants to address absenteeism, which the union could see as a concession.
Last week, Stellantis said in a statement that it intends to fairly reward union employees for their contribution to the company’s success without seeking concessions during the negotiations.
The Associated Press contributed to this report.
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