President Joe Biden announced Friday that his administration would send top aides to Detroit to help with contract negotiations between the United Auto Workers and the three major automakers, saying employers should share profits with union workers.
“These record profits have not been shared fairly, in my opinion, with these workers,” Biden said.
In brief remarks from the White House, Biden said autoworkers “deserve a contract that supports them and the middle class.”
“No one wants a strike. But I respect the right of workers to use their options within the collective bargaining system. And I understand the frustration of workers,” the president said.
Biden also announced he would send acting Labor Secretary Julie Su and White House adviser Gene Sperling to Detroit to help the two sides reach a contract agreement.
About 13,000 U.S. auto workers stopped making vehicles and went on strike Friday after their leaders failed to bridge the giant gap between union demands in contract negotiations and what the three automakers Detroit automakers are willing to pay.
Members of the United Auto Workers union began protesting outside a General Motors assembly plant in Wentzville, Missouri; a Ford plant in Wayne, Michigan, near Detroit; and a Stellantis Jeep factory in Toledo, Ohio.
This is the first time in the union’s 88-year history that all three companies have been targeted simultaneously.
The strikes will likely determine the future of the union and the U.S. auto industry at a time when American workers are showing strength and companies are facing a historic transition from building internal combustion automobiles to manufacturing electric vehicles.
If strikes continue, shortages could drive up vehicle prices and strain an economy already battered by inflation. The walkouts could even become a factor in next year’s presidential election, testing Biden’s claim to be the most pro-union president in American history.
“Workers around the world are watching this,” said Liz Shuler, president of the AFL-CIO, a federation of 60 unions with 12.5 million members.
The union’s tactics have changed. While the UAW strikes at all three automakers, under its pugnacious new president, Shawn Fain, not all of the 146,000 UAW members at the company’s factories are protesting on the picket lines, at least not yet.
This time, the UAW targeted a handful of factories in an effort to bring automakers closer to the union’s demand for a 36 percent wage increase over four years. GM and Ford offered 20% and Stellantis, formerly Fiat Chrysler, offered 17.5%.
These limited strikes will strain the union’s $825 million strike fund, which would run out in about 11 weeks if all workers walk out. Strikes at other factories could begin if automakers don’t move, Fain said.
Carlos Guajardo, who has worked at Ford for 35 years and was employed by GM for 11 years before that, said he appreciated the new strategy of simultaneous, but targeted, strikes.
“This allows the strike fund to last longer,” said Guajardo, who was on the picket line before sunrise.
The limited strike strategy could have ripple effects, GM CEO Mary Barra said in an interview with CNBC on Friday.
“Many of our assembly plants also have contiguous stamping plants that can service other plants,” Barra said. We’ve worked to have a very efficient manufacturing network, so yes, even a single factory will start to have an impact.
Britney Johnson, 35, who has worked for the company for about 3 1/2 years, joined about 400 workers on the picket line outside the Ford plant in suburban Detroit.
“I love this job,” she said. “It’s just that we deserve more.”
At the Jeep plant in Toledo, Candace Bowles, 52, an assembly line worker, cleaned her workstation and walked out when the midnight bell rang. “I’m really happy that everyone is united,” she said.
Even Fain called the union’s demands bold, but he maintains that automakers are raking in billions and can afford it. He scoffs at automakers’ claims that costly regulations would force them to raise vehicle prices, saying labor represents only 4 to 5 percent of the cost of vehicles.
“They could double our increases and not raise the price of cars and still make millions of dollars in profit,” Fain said. “We are not the problem. The problem is corporate greed.
The United Auto Workers and Detroit automakers remain far apart, ahead of the union potentially striking the companies after Thursday’s deadline. Judy Ancel, former director of the Institute for Labor Studies at the University of Missouri, reviews the history of these negotiations.
The strikes capped a day in which both sides complained that the other had not moved sufficiently from its initial positions.
In addition to general wage increases, the union is calling for the reinstatement of cost-of-living wage increases, an end to different wage levels for factory jobs, a 32-hour week with 40 hours of pay, the reinstatement of traditional defined benefit benefits. pensions for new hires who now only benefit from 401(k) retirement plans, pension increases for retirees and other items.
Starting in 2007, workers waived cost-of-living increases and defined-benefit pensions for new hires. Wage tiers were created as the UAW attempted to help businesses avoid financial distress before and during the Great Recession. Despite this, only Ford avoided government-funded bankruptcy protection.
Many say it’s time to take back the concessions because companies are making huge profits and CEOs are raking in millions. They also want to make sure the union represents workers at the joint venture electric vehicle battery factories the companies are building so workers have jobs making the vehicles of the future.
Workers at large assembly plants earn about $32 an hour, plus large annual profit-sharing checks. Ford said the average annual salary, including overtime and bonuses, was $78,000 last year.
The striking Ford plant employs about 3,300 workers and makes Bronco SUVs and Ranger midsize pickups. The Toledo Jeep complex has about 5,800 workers and manufactures the Jeep Wrangler SUV and Gladiator pickup. GM’s Wentzville plant has about 3,600 workers and makes the GMC Canyon and Chevrolet Colorado midsize pickup trucks, as well as the GMC Savana and Chevrolet Express full-size vans.
The union did not go after the big corporate cash cows of full-size pickup trucks and large SUVs, but instead targeted factories that offer low-profit-margin vehicles, said business professor Marick Masters. at Wayne State University in Detroit.
“They don’t put them straight into a corner,” Masters said. “You put an animal in a corner and it’s dangerous.”
Automakers say they are facing unprecedented demands as they develop and build new electric vehicles while making gas-powered cars, SUVs and trucks to pay their bills. They fear that labor costs will rise so much that they will have to sell their cars at a higher price than foreign automakers sell in U.S. factories.
On CNBC Thursday, Ford CEO Jim Farley said that if Ford had agreed to the union’s demands, the company would have lost $15 billion over the past decade and gone bankrupt.
It’s hard to say how long it will be before strikes reduce inventory at dealerships and begin to hurt companies’ bottom lines.
Jeff Schuster, head of auto industry for research firm Global Data, predicted the strikes could last longer than previous work stoppages, such as the 40-day strike against GM in 2019.
“In this case, it feels like there’s a lot more risk here on both sides,” he said.
Williams reported from Wayne, Michigan, while Householder reported from Toledo, Ohio.