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Led by an aggressive new union president, Shawn Fain, the UAW is demanding a 40 percent pay increase over four years and other big concessions, a push that is causing tension with the automakers and making a strike likely, workers and industry experts say.
“This is our time to take back what we are owed. Working together with the companies doesn’t work for us,” Fain said Friday in a live stream update to members. “The only way the working class advances is if we stand together … the only way we’re ever going to have a better quality of life for ourselves and our families is if we fight for it.”
But he also added: “Our goal is not to strike. Our goal is to bargain good agreements.”
A UAW strike against one or all of the Big Three automakers — General Motors, Ford and Stellantis, the parent company of Jeep and Chrysler — would destabilize an industry that makes up about 3 percent of the nation’s gross domestic product. UAW workers produce nearly half of the light vehicles manufactured in the United States, according to GlobalData.
It would come after several years of tumult in the auto industry, brought on by global shortages of computer chips that forced some factories to halt production for weeks at a time. It could also interrupt the Big Three’s transition to electric vehicles, a multibillion-dollar retooling project of vital importance to the industry and the Biden administration.
Automakers have pledged to negotiate a fair deal with workers but caution that they are facing heavy costs and competition from foreign and non-unionized automakers as the electric-vehicle transition heats up. U.S. labor costs at non-unionized automakers such as Tesla are significantly lower, automakers say.
For workers, the vote comes after a period of high inflation that has eroded the value of wages, and amid a tight labor market that is giving workers in all industries more power to demand better compensation.
The vote results came as the UAW also announced a win in parallel negotiations with an electric-vehicle battery factory near Lordstown, Ohio. Ultium, a joint venture between GM and South Korea’s LG Energy, agreed to immediately raise wages by $3 to $4 an hour and remit thousands of dollars of back pay for hundreds of workers, the UAW said. Ultium did not immediately respond to a request for comment.
Low starting pay of $16.50 an hour at the plant led the workers to join the UAW late last year, and fueled fears about job quality in the EV industry.
Gathering for a boisterous rally just outside of Detroit earlier this week, UAW members said they were ready to strike against the Big Three. Many in the crowd, which numbered more than 1,000, cited wages that haven’t kept up with inflation, long and inflexible working hours and a tiered employment structure that puts newer workers on a lower pay scale. Wages for full-time workers currently range from about $18 to $32 an hour. Temporary workers earn less.
Vincent Tooles, who makes $20.60 an hour assembling Jeep Wagoneers at a Stellantis factory in Warren, Mich., said he earns less an hour than his father did at the same company 20 years ago.
“What I would like to see change is just an increase in pay,” said Tooles, who joined the company three years ago. “I feel like we’re the only industry probably in the country that has went down in pay over the last 30 years.”
Kirsten Q. Golson, who makes $20.75 an hour at a Ford axle plant in Sterling Heights, Mich., said she is earning significantly less than others in her factory because she started out on a lower tier six years ago.
“Sometimes it even goes down to whether or not you pay for your prescription or do you eat what you want to eat,” she said. Golson added that she has a hard time buying enough food to feed her grandchildren as often as she would like. “We’re talking about teenagers … and I mean, they eat a lot.”
Golson added that she’s cut back on eating out and other entertainment in preparation for a strike.
In between AC/DC and Journey songs, Margaret Mock, the union’s secretary-treasurer, urged the rally crowd to provide their bank details to get their strike pay in the event of a work stoppage. The union has promised workers $500 a week during any strike.
The UAW says it has more than $825 million in its strike fund. If all 150,000 autoworkers in the union went on strike at once, the fund could pay out $500 a week for 11 weeks, though it must also cover medical and prescription drug insurance for striking members.
It’s not certain that all workers would walk off the job together. During the last UAW work stoppage in 2019, the union targeted GM only, holding a 40-day strike against the automaker. The four-year contract signed after that strike concluded provided 3 percent raises in the second and fourth years of the contract and lump-sum payments equal to 4 percent of a worker’s annual wages in the first and third years.
This time, the UAW says it wants more. Union officials especially want to claw back many of the concessions they made around the time of the Great Recession in 2008, a near-fatal moment for the U.S. auto industry, which needed federal intervention to stay in business.
Those concessions included giving up regular cost-of-living adjustments to wages and forgoing defined benefit pensions and company-funded health-care coverage for retirees.
The automakers have disclosed few details about the talks but have tried to project optimism about the outcome. In a videotaped update this week, GM’s Gerald Johnson, head of global manufacturing, said negotiating teams had been working through the weekend to try to reach a deal. “Everyone’s taking this very seriously,” he said. The goal, he said, is a “fair and equitable agreement, both for the employee and for the business.”
Automakers have stressed that hourly wages aren’t full-time workers’ only form of compensation. In a newspaper editorial this summer, Ford CEO Jim Farley said that “eligible UAW-represented employees earned a total of $42,000 in bonuses and profit-sharing during the past four years.” Including health-care coverage and other benefits, the average hourly UAW employee at Ford earns $64 per hour, he said.
Temporary workers, many of whom work more than 40 hours a week despite being categorized as temps, aren’t eligible for these bonuses or many of the benefits earned by full-timers.
In a statement Friday, Ford said it is “proud to build more vehicles in America and employ more UAW-represented hourly workers in America than any other automaker” and will work toward “creative solutions” with the union.
GM said it will “continue to work hard with the UAW every day and bargain in good faith to ensure we get this agreement right for our team members, our customers, suppliers, the community and the business.”
The union’s negotiations with Stellantis have become particularly acrimonious. In recent updates on Facebook Live, Fain has singled out the company for criticism, saying that its contract proposals were “trash,” and lambasting a Stellantis executive for vacationing in Mexico instead of attending bargaining talks. Stellantis didn’t immediately provide comment Friday.
Recent contract wins by other groups of workers have given the UAW hope for gains.
UPS workers and their union, the Teamsters, recently secured a new contract that some labor experts describe as the best for workers in UPS history, including nearly 50 percent raises over the next five years for part-time employees.
And UAW-represented workers at Deere & Co., the manufacturer of John Deere tractors, won significant gains in 2021 after a month-long strike, including 20 percent wage increases over a six-year contract, an $8,500 contract ratification bonus and the return of cost-of-living adjustments to wages.
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