The United Auto Workers union has launched a historic strike against three U.S. automakers, escalating a labor dispute that could have major economic and political implications.
What’s happening?
The UAW announced Thursday night that it would strike at three assembly plants of General Motors, Ford and Stellantis, formerly Fiat Chrysler, after failing to reach new contract agreements with the companies by the midnight deadline.
The plants are GM’s midsize truck and full-size van plant in Wentzville, Missouri; Ford’s Ranger midsize pickup and Bronco SUV plant in Wayne, Michigan; and Stellantis’ Jeep plant in Toledo, Ohio.
The union said these plants were selected as “targeted locations” to disrupt the automakers’ production and supply chains, while minimizing the impact on the union’s strike fund, which pays $500 per week to striking workers.
The UAW said it would add more strike locations depending on the progress of the negotiations, which are expected to resume Friday.
Why are they striking?
The UAW is seeking to secure better wages, benefits and working conditions for its 146,000 members who work at the three automakers.
The union’s initial demands included a 40% pay increase over four years, a reduced 32-hour work week, a shift back to traditional pensions, the elimination of pay tiers that create wage disparities among workers, and a restoration of cost-of-living adjustments.
The automakers have offered wage increases of roughly 20%, cost-of-living adjustments, altered profit-sharing bonuses and enhanced vacation and family leave benefits. But the union has rejected these offers as inadequate and insufficient to reflect the workers’ contributions and sacrifices to the companies’ profitability and competitiveness.
The union has also accused GM and Stellantis of bargaining in bad faith and delaying the negotiations, filing unfair labor practice charges against them with the National Labor Relations Board last month.
What are the implications?
The strike could have significant consequences for the auto industry, the economy and the Biden administration.
The auto industry is already facing challenges from the global semiconductor shortage, which has hampered production and sales of new vehicles. The strike could further reduce the supply of vehicles and parts, driving up prices and hurting consumer demand.
The strike could also affect other sectors that depend on the auto industry, such as steel, rubber, glass and transportation. According to Moody’s Analytics, each of the Big Three automakers could lose $5.4 billion from halted production over a six-week strike.
The strike could also pose a political challenge for President Joe Biden, who has championed labor rights and pledged to support the transition to electric vehicles. Biden has been in touch with UAW President Shawn Fain and the leaders of the automakers to discuss the status of the negotiations, according to the White House.
Biden may face pressure from both sides to intervene in the dispute or take a stance on the issues. The UAW is a powerful ally of the Democratic Party and a key constituency in Michigan and Ohio, two swing states that Biden won in 2020. The automakers are also important players in Biden’s plan to boost U.S. manufacturing and combat climate change by investing in electric vehicles and infrastructure.
What’s next?
The strike is expected to continue until the union and the automakers reach tentative agreements that can be ratified by the UAW members. The duration and outcome of the strike are uncertain, as both sides have expressed determination to stand their ground.
The UAW has said it is prepared to strike “in a way they’ve never seen before,” while the automakers have said they have negotiated in good faith and offered “compelling and unprecedented” proposals.
The last time the UAW conducted a nationwide strike was in 2019, when it struck GM for 40 days over similar issues. The strike cost GM an estimated $3.6 billion and resulted in a new contract that included wage increases, bonuses, job security commitments and a path to permanent status for temporary workers.