In an outcome few outwardly hoped for, separate contract negotiations between the three major Detroit automakers and the United Auto Workers union failed to come to a tentative agreement by the evening of September 14. As a result, the UAW announced it would launch strikes simultaneously at factories owned by the "Big 3" of Detroit automakers—General Motors Co., Ford Motor Co. and Stellantis N.V.
While the UAW represents about 146,000 autoworkers in the United States, not all of them will be immediately affected by the strike. In an announcement on Facebook Live, UAW President Shawn Fain announced the union will strike strategically at a limited number of plants, starting with a Ford assembly plant in Wayne, Michigan; a Stellantis assembly plant in Toledo, Ohio; and a General Motors assembly plant in Wentzville, Missouri; The targeted plants together employ about 12,700 workers, according to Reuters.
According to Fain, The UAW plans to strike at more, as-yet unannounced plants if no agreements are made.
“At the beginning, only a select few will strike,” he said in a video message to members released Thursday. “Then, as needed, more will join. We will hit where we need to hit, when we need to hit, to move mountains.” Workers not striking will continue work under their expired contracts, the UAW confirmed.
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In addition to achieving the disruptive effect of a traditional strike, the UAW’s strategy is meant to stretch its funds for as long as possible. The union has a reported strike fund of $825 million, which could only support a total strike for an estimated 11 weeks. In July, though, Federal Reserve Bank policy advisor Kristen Dziczek predicted the fund could last for up to an entire year if the UAW elected for a more strategic approach.
What does the union want?
The UAW released its list of demands August 2. They initially included 40% wage increases over the four-year contract term, an end to two-tier wage structures, restored cost-of-living adjustments, limits on temporary workers, the right for employees to strike against plant closures, the return of defined pensions, and a 32-hour workweek for 40 hours of pay.
At the time, UAW President Shawn Fain himself described the goals as “audacious,” but characterized the demands as making up for concessions made to automakers during the 2008 recession, which saw the creation of the now-unpopular two-tier wage structure.
Since releasing its initial demands, the UAW has reportedly moderated its call for wage increases to about 30% over the course of the contract term—but it’s still a significant way from what companies say they’re willing to pay.
What are companies offering?
Late Thursday evening, Mary Barra, CEO of GM, announced that the company had offered a 20% wage increase over the four-year contract term, some cost-of-living adjustments, a faster track to higher-tier wages, a 25% increase to retirement healthcare contributions and 2 weeks of PTO.
In a letter accompanying the last-minute release, Barra described the offer as “historic,” and said her company is continuing to bargain in good faith. She also invoked the last time the UAW took action, just four years ago, saying “We had a strike in 2019 and nobody won.”
Ford CEO Jim Farley, meanwhile, noted September 13 that his company had made four “increasingly generous” counteroffers, and that their latest included 20% wage increases, cost-of-living increases, “fully eliminated wage tiers” and increased contributions to retirement savings. But he rejected the UAW’s topline wage increase as too expensive and Fain’s 32-hour workweek demand as unrealistic.
“We can’t have a sustainable industry working four days a week,” Farley commented in a September 12 interview with ABC news.
In Fain’s September 13 address, he said that Stellantis’s own offer for wage increases, 17.5%, was not sufficient.
