United Auto Workers are striking in thousands after Detroit automakers and union failed to reach an agreement. The union represents around 146,000 workers at Ford, GM, and Stellantis, also known as the big three.
The issue on hand is that worker pay has remained almost the same while company CEOs have earned 40% more on top of their multiple million-dollar paychecks.
Autoworkers walked off at three factories this Friday, 15 September 2023. Nearly 13000 members of the United Auto Workers at plants in Ohio, Michigan, and Missouri joined the targeted strike to demand pay raises. The UAW is striking against unfair wage practices by General Motors, Ford, and Stellantis.
What Do Striking Auto Workers Want?
The union for factory workers is asking for a 36% raise in general pay over four years. A top-scale worker gets about $32 per hour, while a low-tiered worker gets $17 per hour. The UAW has also demanded an end to the tiered system of wages.
Some of the demands include a 32-hour week with 40 hours of pay, restoration of traditional defined-benefit pensions for new hires, and a return of cost-of-living pay raises.
The union also wants to be allowed to represent workers at ten electric vehicle battery factories. The union wants workers to receive top UAW wages as workers who make components for internal combustion engines will need a place to work when the industry transitions to EVs.
UAW workers who were hired after 2007 don’t receive defined benefits and less effective health care benefits.
Shawn Fain, the combative resident of the UAW, acknowledged that the union’s demands are audacious. Still, he juxtaposes that the profit margins of the industry can handle raising the workers’ wages. Especially in return for what the union gave up helping the companies withstand the 2007-2009 financial crisis and the Great Recession.
The Detroit Three have emerged as profit makers over the past decade and have collected a net income of $164 billion, of which $20 billion was raised this year alone. The CEOs of all three companies earn multiple millions.
While it is a given that the CEOs will earn much more than the lower strata workers, the question is, how much should the margin be?
While the automaker companies have leaned into the pay raises, a big gulf between the demands and the offer still remains. GM said on Thursday that it had boosted its offer to a 20% pay raise over four years, including 10% in the first year. Ford is also offering a 20% boost, while Stellantis has raised and revised its last 17.5% offer.
Fain has dismissed all the proposals as inadequate to protect workers from inflation. The companies state that the union’s demands are too expensive and can’t be saddled with such high labor costs when they want to spend the next few years spending massive capital to build combustion-engine vehicles as well as electric vehicles.
The companies have also proposed that if the UAW contract raises the labor cost too high, the retail prices of the vehicles would also go up.
Currently, it’s hard to say which side has the advantage as the companies have enough capital to survive strikes for a long time while the union also has a $825 million strike fund. However, it will deplete in just three months if the whole workforce strikes.
If the strike lasts too long, it will hurt the US economy as the auto industry accounts for around 3% of the US economy’s gross domestic product. Detroit automakers represent about half of the total US car market.
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