Global EditionASIA 中文双语Français
Home / World / Americas

Strike by autoworkers loomed late Thursday

By AI HEPING in New York | China Daily Global | Updated: 2023-09-15 09:50
Share - WeChat

With hours to go until contracts expired between the United Auto Workers Union and Detroit's Big Three automakers, the two sides remained far apart before the deadline.

The contract expired at 11:59 pm ET Thursday. If no deal were reached, a strike would start at midnight. UAW President Shawn Fain said Thursday that union officials won't bargain on Friday and instead will join workers on picket lines.

Talks continued Thursday with media reports saying General Motors (GM) increased its wage offer, and Ford was looking for a counteroffer from the union.

The UAW is demanding a 36 percent pay increase over four years, and the automakers, GM, Ford and Stellantis, formerly Fiat Chrysler, have countered with offers that are roughly half of that increase.

There was no word from the White House about the talks. Depending on the length of a strike, it could be a shock to the economy, which President Joe Biden — who has called himself the most pro-union president in history — could point to as a success as he makes his case for reelection.

According to an August report from the Anderson Economic Group, a 10-day strike against all three automakers would result in total economic losses of $5.6 billion. Around $3.5 billion of that would result from lost wages and production, with the remaining $2.1 billion borne by consumers, who wouldn't be able to get necessary repairs and replacement parts, and by dealers and their employees.

Reduced auto production from a UAW strike affecting the Big Three would reduce economic growth by up to 0.1 percentage point for each week it lasted, Goldman Sachs analysts said in a report. "Auto production would likely fall sharply — we assume to roughly zero — at any company impacted by a strike," they wrote.

The average new vehicle in the US costs $48,451, according to Kelley Blue Book. A UAW strike that lasts two weeks could push up prices for new vehicles by 2 percent, automotive consulting firm J.D. Power told Reuters.

The UAW started out demanding 40 percent raises over the life of a four-year contract, or 46 percent when compounded annually. Initial offers from the companies fell far short of that demand. The UAW lowered it to around 36 percent. The union also has demanded cost-of-living adjustments and the end of a tiered wage system.

UAW President Shawn Fain on Wednesday told the union's 146,000 workers that the union will target a limited number of factories at each automaker initially if a walkout is called. That would involve fewer workers than a traditional action that involves all workers walking off the job at once.

It would be the first simultaneous strike against the automakers, which now make nearly half of all domestically assembled cars, in the union's 80-year history.

"We are preparing to strike these companies in a way they have never seen before," Fain said in a Facebook Live address on Wednesday. "We're going to hit where we need to hit," he said.

He said the UAW walkouts would escalate if negotiations didn't improve.

The automakers say an expensive contract could saddle them with costs that would force them to raise prices above their non-union foreign competitors.

The labor negotiations come as US car manufacturers are investing billions of dollars to produce electric and hybrid vehicles, a vital market for the companies. The union is pushing to represent workers at 10 electric-vehicle battery factories, most of which are being built as part of joint ventures between the automakers and South Korean battery makers.

The union also is seeking significant concessions from GM, Ford and Stellantis (which owns Chrysler), including restoration of cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, and pension increases for retirees.

Fain insists the automakers can afford to pay raises because each has recorded hefty profits this year.

Full-time assembly plant workers at Ford and GM currently make $32.32 an hour, while part-timers earn about $17 an hour. At Stellantis, full-timers earn $31.77 an hour and part-time workers make almost $16 an hour.

A 40-day strike against GM in 2019 had limited economic effect. One key difference this time is inventories. Total domestic car inventories, which includes new and used cars, have increased from a record low in February 2022, but are less than a quarter of what they were in 2021.

"The big issue for GM and Ford as well as investors is if anywhere near a 40 percent wage increase gets approved, this will be a major headwind on the cost front and ultimately in some way be passed down to the consumer and through EV prices, analysts with Wedbush Securities said in a report this week."

Agencies contributed to this story.

Most Viewed in 24 Hours
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349