AMAC Exclusive – By Neil Banerji
According to the Associated Press, the leaders of the United Auto Workers (UAW) union are considering targeted strikes at a small number of factories run by each of Detroit’s three automakers if they can’t reach contract agreements by Thursday night. If the smaller strikes cascade into a broader, industry-wide walkout, it could threaten Biden’s support from organized labor and spell disaster for the president’s re-election bid.
The UAW represents about 146,000 hourly workers at the three companies facing strikes, General Motors, Ford, and Jeep-maker Stellantis. Just a 10-day strike of the entire union could cost the U.S. economy as much as $5 billion. In 2019, a 40-day strike by 46,000 General Motors workers cost the company more than $3.5 billion.
Consumers could also see a dramatic spike in new and used vehicle costs as a consequence of a longer strike, creating the possibility for more widespread economic turmoil.
The union has laid out an aggressive set of demands that it says must be met to avoid a strike, including a double-digit wage increase, the restoration of cost-of-living adjustments, a 32-hour workweek, medical benefits for retirees, and the creation of a program that would pay workers on layoff and end different wage classifications.
In addition, the UAW wants the right to strike over plant closures, a demand that follows the controversial closure of a Stellantis plant in Illinois earlier this year.
With an $825 million strike fund, the UAW appears armed for a long holdout. A tight labor market in recent years has given the union additional leverage.
Auto makers have proposed a far more modest set of concessions. General Motors is offering a 10 percent pay raise for workers spread out over a four-year contract, while Ford has proposed 9 percent and Stellantis offered 14.5 percent.
While the UAW’s demands are indeed steep, they come in the context of record profits for car manufacturers. General Motors’ revenue increased 25 percent in the second quarter of this year over 2022 numbers, handily beating analysts’ expectations. Ford also recently raised its full-year adjusted earnings forecast following a better-than-expected second quarter.
Revenue increases have typically come alongside better wages for employees. But car makers say that despite bringing in more money, their profits are being cut into by the Biden administration’s increasingly stringent emissions regulations and looming electric vehicle mandates. Biden’s EPA has proposed a new rule that would require two-thirds of all new car sales to be electric vehicles by 2032. In 2022, just 5.8 percent of new cars sold were fully electric.
In order to meet these goals, car companies say they need to invest more in the switch to EV production, and thus have less to offer in pay increases for workers in order to remain competitive as Tesla continues to gobble up an outsized share of the EV market. Because EVs require significantly fewer parts and labor to produce, a shift away from gas vehicles could also cause 100,000 auto workers to lose their jobs.
For his part, Biden has remained seemingly unconcerned about the possibility of a strike. Earlier this month, the president declared that he is “not worried” about a work stoppage.
Although UAW President Shawn Fain said he was “shocked” at Biden’s comments, union leadership has remained staunch supporters of Biden’s EV agenda. Earlier this year, Fain enthusiastically announced, “the UAW supports and is ready for the transition to a clean auto industry.”
All signs suggest that, at least for now, UAW leadership will remain firm supporters of Biden, even as his climate agenda threatens the jobs of UAW members – something which could create a serious problem for Biden heading into next year’s election if Republicans can capitalize on it.
Former President Donald Trump, who remains the heavy favorite for the GOP nomination in 2024, evidently recognized this opportunity and released a video blasting Biden’s EV mandate and asking for UAW workers to back him next year.
In a Labor Day post on Truth Social, Trump also decried Biden’s EV policies as “idiotic,” writing “Shawn Fain, the respected President of the United Auto Workers, cannot even think about allowing all electric cars – they will all be made in China, and the Auto Industry in America will cease to exist!”
The Detroit-based auto unions continue to be a powerful voting bloc in a state that typically votes Democrat, but broke for Trump in 2016 and was a battleground again in 2020. If tens of thousands of UAW workers decide that Trump has the best plan to protect their livelihoods, it could spell disaster for Biden next year.
Neil Banerji is a proud Las Vegas resident and former student at the University of Oxford. In his spare time, he enjoys reading Winston Churchill and Edmund Burke.