UAW strike's impact on new car sales minimal, but challenge now is unaffordable prices
Auto industry experts say December clearance sales may help spur sales of new cars, but not create any lasting momentum. Here's why.
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Nora Naughton and Associated Press Workers picket outside of the Ford Assembly plant during the UAW strike against the Big Three U.S. automakers. Scott Olson/Getty Images) The historic United...
Nov 12, 2023 · The United Auto Workers staged an unprecedented strike against the Big Three Detroit automakers — and they emerged with three big, lucrative deals. But the wider impact on the rest of the country...
- Double-digit pay hikes
- Ratification still needed
- Strikers returning to work
- A busy time for strikes
General Motors and the United Auto Workers union have come to a tentative agreement, the union and company announced Monday afternoon, just two days after the union expanded the strike at America’s largest automaker.
The tentative deal could bring an end to the union’s unprecedented strike against all three of the nation’s unionized automakers.
“Like the agreements with Ford and Stellantis, the GM agreement has turned record profits into a record contract,” said a statement from the union.
“GM is pleased to have reached a tentative agreement with the UAW that reflects the contributions of the team while enabling us to continue to invest in our future and provide good jobs in the U.S.,” said GM Chair and CEO Mary Barra.
Full details of the deal are not yet known, but its broad terms follow the lines of the deals already announced at Ford and Stellantis, including an immediate 11% raise in the top hourly wage rate, additional pay hikes totaling another 14% during the four-and-a-half years of the contract, as well as a return of the cost-of-living adjustment (COLA) meant to protect workers from rising prices. When the COLA and guaranteed pay increases are combined together, they could lift members’ pay more than 30% over the life of the contract.
Less senior workers not already at the top pay scale would get even larger pay increases, perhaps as much as 150%. And temporary workers would be made permanent full-time workers after a few months on the job. There would also be improved retirement benefits for senior workers who have traditional pension plans and larger company contributions to the 401(k) plans of workers hired since 2007.
The union went on strike against all three automakers on September 15, nearly seven weeks ago, making this the longest US auto strike in 25 years. It started with a strike at one assembly plant at each company, but it expanded the scope of the strike six times since then in an effort to step up pressure on the companies at the bargaining table.
The union announced its first deal, with Ford, on Wednesday and then announced a deal with Stellantis on Saturday. But it failed to reach a deal with GM at that time, despite indications the two were close to a deal. Instead, it expanded the strike to a fourth assembly plant, this one in Spring Hill, Tennessee, as nearly 4,000 UAW members joined the strike at that time.
All three tentative deals will need to be ratified by rank-and-file members before they take effect. And it is possible that members at one or more companies could vote down the tentative deal, leading to a resumption of the strike at that company.
The financial gains in the deals could help it to win approval from the rank-and-file membership, but ratification is not certain. There have been numerous examples in recent years in which rank-and-file members voted down a deal recommended by union leadership, leading to a strike. Most recently that happened at Mack Trucks, where nearly 4,000 UAW members went on strike on October 8 after voting no on their own tentative agreement. The Mack Truck workers remain on strike.
The deals at Ford and Stellantis did not just provide financial wins for the union. It also improved job security, as there were promises of new products at some plants that might have been set to close otherwise.
Some of those plants make engines or transmission parts, which are needed in a traditional gas-powered vehicle, but not in an electric vehicle. All automakers have announced plans to shift from traditional internal combustion engine vehicles to EVs in the coming decades, which the union is concerned could cost jobs at engine and transmission plants.
UAW President Shawn Fain previously said that the union won an important agreement in talks with GM to have workers at a series of EV battery plants it has opened or is building to be included in the labor agreement for its plants. Details of that agreement are not yet clear. Fain said over the weekend that Ford is also agreeing to similar agreements for its EV and battery plants.
Another job security provision of the Ford and Stellantis deals comes from the union winning a right to strike during the life of the contract to protest any new plant closings. In the past, the union worked under a no-strike clause that remained in effect during the life of a contract, so a company could close a plant without worrying about a strike threat.
There are a total of more than 18,000 UAW members at GM now on strike, though they will be returning to work within days. The 16,600 strikers at Ford have already returned to work, and more than 14,000 Stellantis strikers are in the process of returning to work.
Typically when a union goes on strike, and then reaches a tentative deal, the workers don’t return to work until the ratification process is completed. That’s what happened when a deal was reached to end the six-week strike at GM in 2019.
But the union had workers at Ford start to return to work in order to step up pressure on GM and Stellantis to match the agreement at Ford. When Stellantis agreed to the deal Saturday night, the union not only announced its strikers would return to work, but it announced that nearly 4,000 members at a GM plant in Spring Hill, Tennessee, would join the strike.
Having the GM strikers follow that path of returning to work during the ratification process allows the members to start getting paychecks again. While the members on strike have received a $500 a week strike benefit from the union, that is only a fraction of the pay they would receive while on the job.
The costs per week have likely increased since then, as the union added GM’s largest plant in Arlington, Texas, to the strike a week ago. That one portion of the strike likely cost GM about $130 million a week, according to an estimate from Well Fargo.
The UAW strikes against the three automakers are not the only ones disrupting operations in the North American auto industry. Unifor, the union that represents autoworkers in Canada, staged two very brief strikes at GM and Stellantis plants there.
On October 10 it struck GM’s Canadian plants, but reached a deal to end that work stoppage in about 13 hours. At 11:59 pm ET Sunday it declared a strike at Stellantis, but it continued to talk through the night and announced a tentative agreement and an end of the strike at 7:36 am Monday. Both strikes had the potential to cause shutdowns at US plants at the companies had they lasted more than a day.
The strike has been particularly high profile in a period of intense activity by the nation’s labor unions. President Joe Biden became the first sitting president to join a picket line when he visited strikers outside a GM facility in Michigan last month.
Biden heralded the tentative agreement this morning, giving reporters a thumbs up as he boarded Air Force One in Delaware, and telling them “I think it’s great” when asked about the deal.
During the UAW strike, a coalition of unions at Kaiser Permanente had 75,000 workers walk out in the largest US health care strike in history. There are also 160,000 actors striking Hollywood studios and streaming services.
Sep 15, 2023 · Industrial action billed as “ the biggest auto strike in generations ” got under way late on Thursday night for 150,000 US autoworkers, with employees at Ford, Stellantis and General Motors...
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