Why UAW strikes at GM, Ford, Stellantis seem inevitable

Members of the UAW rally and practice picketing near the Stellantis plant in Detroit, Aug. 23, 2023.

Michael Whelan/CNBC

DETROIT — United Auto Workers president Shawn Fain appears ready to start a picket line.

Union’s new Bulldogs leader repeatedly vows tough bargain with Detroit automakers General Motors, Ford and star On September 14th at 11:59 pm Contract negotiations are underway before the contract expires.

He insisted it was a tough deadline, one that his leadership team wasn’t planning to extend as the union had done in the past, and that he wasn’t afraid to let some 150,000 autoworkers leave the plant if necessary.

That, combined with the news late Thursday that Fein and the union filed unfair labor practices charges against GM and Stellantis with the National Labor Relations Board, alleging that the companies did not haggle in good faith, is a blow to one, if not all three. hit. Automakers, increasingly inevitable.

Unlike previous union leaders, Fein attempted to negotiate with all three automakers simultaneously, refusing to pick a “target” company to focus on while expanding deals with others. He has also been more confrontational with automakers than previous union leaders, sometimes launching personal attacks on executives.

Some industry analysts and experts believe it may take one or more strikes to convince UAW members that union leaders are doing their best to meet the demands.

“I expect there will be strikes,” said Art Wheaton, a labor professor at Cornell University’s Worker Institute. “I think there’s a good chance they’ll attack Strandis first and then give Ford and GM a few days to come up with a better offer.”

Wheaton believes that with the distance between the two sides, a Strandis goal is almost a certainty. The union could use the shutdown to warn GM and Ford of closing the deal, he said.

“I think it’s almost necessary that the Strandis strike, or they’ll never get the deal approved,” Wheaton said. “Strantith was provocative, and he said, ‘Try me if you dare.'”

Strikes can take many forms, including national strikes, where all workers under a contract stop working, or targeted lockouts at certain factories over local contract issues.

UAW President Shawn Fain on Facebook Live on August 8, 2023

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A prolonged strike against the Big Three automakers would be unprecedented and would quickly impact the auto supply chain, the U.S. economy and domestic production.

The Biden administration is particularly interested in the talks, including the appointment of longtime Democratic adviser Gene Sperling to monitor the situation for the White House.

Wall Street Watch

Wall Street has been warning of a possible shutdown for months, and investors have begun paying attention.

A short survey of 99 investors by Morgan Stanley found that 58% thought a strike was “extremely likely”. Followed by 24% of people said “somewhat possible.” Just 16 percent said a strike was unlikely, while 2 percent said it was “unlikely.”

industry and labor experts agree, and For good reason.

Contract deadline looms after fein and other union leaders’ combative rhetoric; years-long labor movement involving shutdowns, including the UAW; union’s ambitious demand for a 40% wage hike or more, keep Platinum health care and a 32-hour workweek.

Such demands are often not made public, or even fully reported, until near the end of negotiations, partly to haggle in good faith but also to avoid setting expectations too high or too low for UAW members. The contract needs to be ratified after the parties have announced a tentative agreement.

“I’ve always said that the best way to get a deal is to negotiate with each other, not in the newspapers or on TV or anywhere else,” he said. Dennis DevaneySenior counsel at Clark Hill, former NLRB board member and counsel to General Motors and Ford. “I don’t think open negotiations … will really move things forward.”

Members of the United Auto Workers union picket outside General Motors’ Detroit-Hamtramck assembly plant in Detroit, Sept. 25, 2019.

Michael Whelan/CNBC

To be clear, calling the strike isn’t entirely up to Fehn. That’s up to the UAW’s 14-member International Executive Board (IEB), which Fain chairs. Leaders must approve the shutdown by a two-thirds majority based on weighted votes.

The next question is how long the strike will last.

Morgan Stanley found that the vast majority (96%) of investors surveyed expect a potential strike to last more than a week. More than a third (34%) expect the strike to last more than a month.

GM reported at the time that the 40-day strike against GM during the final round of contract negotiations in 2019 cost the automaker $3.6 billion in earnings for the year.

The UAW’s strike fund holds more than $825 million to pay eligible strike members. Strike pay for each member is $500 per week.

Assuming contracts cover 150,000 or so UAW members, strike wages would cost the union about $75 million a week. So the $825 million in funding would cover about 11 weeks. A word of caution: This does not include health care costs that unions will cover, such as interim COBRA programs, which could run out of money faster.

approve

For most of the union’s history, the general expectation was that members would eventually ratify whatever deal UAW leaders bargained for and endorsed.

However, in recent negotiations, this has not been the case and the two sides need to return to the negotiating table.

That’s what happened in two rounds of negotiations in 2015, when workers at then-Fiat Chrysler (now Stellantis) voted down a tentative deal. That same year, GM’s skilled trade workers also voted against a tentative agreement with the Detroit automaker, delaying approval.

Typically, once a union reaches an interim agreement with an automaker, members of that automaker are voted by local groups on whether to accept the interim agreement and sign it into a contract. The entire approval process can take about two weeks for each company.

“The UAW’s tentative agreement with an automaker is really a set of agreements—the text and appendices for different aspects, such as pension and retirement plans, health care benefits, supplemental unemployment benefits, profit sharing, personal savings plans, life in the Chicago Commonwealth Kristin Dziczek, auto policy advisor at the Reserve Bank of Detroit, said: a blog post.

In 2019, it took another eight weeks to negotiate and ratify all three agreements after the first interim agreement was reached after the GM strike. Negotiations and an approval vote concluded in early December.

A spokesman for the automaker declined to comment directly for this article, but reiterated that their teams will continue to bargain in good faith with the union in hopes of reaching a deal that is beneficial to both parties.