Sidelined over UAW strikes, Biden administration talks economic aid

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Members of the United Auto Workers participate in a rally in Detroit, Michigan, on September 15.Paul Sancya/Associated Press

As the UAW strike enters its fifth day, the Biden administration is hampered by a lack of legal authority to direct negotiations and is struggling to understand UAW President Shawn Fain’s negotiating strategy , or to have a clear idea of ​​his leadership style, three sources said.

The Biden White House is discussing ways to mitigate the economic consequences of a prolonged auto worker strike, the sources said, as U.S. officials acknowledge they have a limited role to play in negotiations between General Motors, Ford and Chrysler owner Stellantis, and the US president. union.

Senior administration officials held several phone calls with union leaders, Michigan lawmakers, business executives, suppliers, outside labor advisers and economists in the run-up to the strike to discuss aid to workers, suppliers and the local state economy as both sides continue negotiations. , said one of the sources.

The White House has launched an “interagency process” to study the economic implications of the strike, with a focus on workers, said a fourth source familiar with the matter, who called the process “routine.”

The White House and the administration have discussed “mitigation efforts” in the event of a full work stoppage, not in response to the union’s current actions, two sources said.

White House spokeswoman Robyn Patterson said “no decisions have been made” about offering aid or reducing the economic impact.

Biden on Friday clearly sided with the union, asking automakers to make more concessions to workers who walked out at Detroit’s biggest automakers and share record profits fairly, and said he would send two of his top officials in Detroit to support both sides. the negotiations.

But he was rebuked by the UAW’s Fain, who said “this fight is not about the president,” and the two officials, Gene Sperling and Acting Labor Secretary Julie Su, were still in Washington Monday evening.

A White House official said that “their goal is not to intervene or mediate but to help support negotiations in a way that both sides deem constructive.”

“No one has read anything about Fain,” said Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations. “He’s not only a stranger to the Biden administration, but he was a stranger to the big three,” he said, referring to the automakers.

Fain has led the UAW for less than six months.

Fain, whose union has yet to endorse any 2024 presidential candidate, also rejected demands from Republican Donald Trump.

“Every fiber of our union is invested in fighting the billionaire class and an economy that enriches people like Donald Trump at the expense of working people,” Fain said, after Trump announced he would come to Detroit to take over. speech on September 27.

Top officials, such as National Economic Council Deputy Director Joelle Gamble, have recently held phone calls with auto suppliers, the sources said.

Aid to suppliers was launched “the moment it became clear there might be a strike”, but these negotiations are “premature and fluid”, one of the sources said.

The White House estimates that the largest “Tier 1” suppliers will still be able to weather the storm, but that smaller companies in the supply chain will struggle if the strike lasts more than six to eight weeks, it said. said one of the sources.

The US strike could slow down an overperforming US economy if it continues – even at the risk of the first net monthly drop in payroll employment in almost three years – but it is unlikely to trigger a recession on its own, say economists.

Pushing original equipment manufacturers to increase production and reduce the impact on the country’s supply chains was also discussed by the industry on those calls, two sources said.

The White House also discussed with Michigan lawmakers ways to limit the impact a strike would have on the state’s economy, which has suffered from rising transportation costs, wage inflation and of Covid, the sources added.

Among the concerns raised were job losses and layoffs, falling personal incomes, falling state tax revenues, demand for electric vehicles and how wage increases must keep pace with the inflation, the sources said.

Discussions about the economic consequences have not only just begun. White House Chief of Staff Jeff Zients had a conversation with the AFL-CIO executive council at its headquarters in July to discuss “fundamental labor issues” and what the administration can do to support workers, one of the sources said. An AFL-CIO spokesperson had no comment.

In addition to Sperling, Su, Gamble and Zients, senior White House officials involved in the effort include National Economic Council Director Lael Brainard, Deputy Chief of Staff Jen O’Malley Dillon and Advisor to the President Steve Ricchetti.

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