September 19, 2023

UAW Strike

Nearly one in 10 of America’s unionized auto workers went on strike [last] Friday to pressure Detroit’s three automakers into raising wages… The strikes are limited for now to three assembly plants: a GM factory in Wentzville, Missouri, a Ford plant in Wayne, Michigan, near Detroit, and a Jeep plant run by Stellantis in Toledo, Ohio…

“Union President Shawn Fain says workers could strike at more plants if the companies don’t come up with better offers. The workers are seeking across-the-board wage increases of 36% over four years; the companies have countered by offering increases ranging from 17.5% to 20%... In addition to the wage increases, union negotiators are also seeking: restoration of cost-of-living pay raises; an end to varying tiers of wages for factory jobs; a 32-hour week with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans; and pension increases for retirees.” AP News

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From the Left

The left supports the strike, arguing that the Big 3 automakers have not shared their recent profits with workers.

“When the financial crisis of 2007-9 jeopardized the automakers, the union agreed to give up its annual cost-of-living adjustments, which had begun in 1948. It also accepted expanded use of a two-tier wage structure. Today the starting wage is $18.04 an hour, which is lower than the 2007 starting wage of $19.60, Fain said. If the starting wage had kept up with inflation it would be around $29 today, he noted…

“Meanwhile the automakers rebounded from the financial crisis and began to make a lot of money — $250 billion from 2013 through 2022… G.M. and Chrysler were prohibited from issuing big dividends or stock buybacks to reward shareholders as a condition of the federal bailouts they received, but soon after the government sold the last of its shares… they resumed big payouts in earnest. They also boosted top executives’ pay…

“The automakers have argued in negotiations that they will need lots of money to make the transition to electric vehicles, but the big payouts to shareholders and executives somewhat undercut them.”

Peter Coy, New York Times

“There’s nothing wrong with a business enterprise in financial distress seeking concessions from its workers, as GM and Chrysler did during the Great Recession of 2007-2009. Nor is there anything wrong with a union agreeing to such concessions, as the UAW did…

“But as the Big Three prospered over the following decade and a half, they never seriously considered making autoworkers whole again—let alone cutting them in on the proceeds of the boom period they helped summon into being. Since 2013, profits at the Big Three have risen 92 percent, according to the nonprofit Economic Policy Institute. During that time period, the companies paid out nearly $66 billion in dividends and stock buybacks, $14 billion of that in this year alone.”

Timothy Noah, New Republic

Environmental groups are lining up on the side of the United Auto Workers against the Big Three… The green support for the union marks a relatively new development between two Democratic-aligned factions. Environmental groups have broadened their missions in recent years to address a range of social problems, including racial and economic issues, in part as an effort to build broader coalitions to support their campaigns to fight climate change and pollution…

“‘For the climate movement, which for years have said the words ‘just transition,’ this is the moment where they’re actually putting their words into action,’ [Center for American Progress senior fellow Mike] Williams said. ‘You can’t have a just transition if you don’t have good jobs on the other side of it.’”

Ben Lefebvre, Politico

From the Right

The right is skeptical of the strike, noting that the Big 3 automakers already have significantly higher labor costs than non-unionized competitors such as Tesla.

The right is skeptical of the strike, noting that the Big 3 automakers already have significantly higher labor costs than non-unionized competitors such as Tesla.

“[This is] pitting two parts of the traditional Democratic coalition against each other — the environmentalists against the blue-collar workers, or simply the greens against the blues…

“Fain has refused to endorse President Biden for another term because of the president’s insistence on following California’s lead and ending sales of new internal-combustion-engine vehicles by 2035. The blue-collar workers want their jobs, but the greens care more about trees…

“Ford Motor Company president Bob Farley estimates that the industry will need 40 percent fewer workers to produce EVs rather than gas-powered cars and light trucks. That’s 200,000 fewer jobs in 2030 and 400,000 fewer jobs in the long run… Electrification is leading not only to shrinking worker incomes but to a fundamental fracturing of the Democratic Party coalition. That might be the most damaging part of the UAW strike.”

Diana Furchtgott-Roth, National Review

“One thing is clear: Elon Musk has already won… Musk won before the strike began early Friday. He won before negotiations started two months ago. From the get-go, General Motors, Ford Motor and Chrysler-parent Stellantis were expected to spend more on wages because of the union’s pressure. The question is just how much of an increase…

“The Detroit companies’ labor costs, including wages and benefits, are estimated at an average of $66 an hour, according to industry data. That compares with $45 at Tesla, which isn’t unionized and was founded 20 years ago. Meeting all of Fain’s initial demands would boost average hourly labor costs to $136 for the Detroit companies, Wells Fargo estimated.”

Tim Higgins, Wall Street Journal

General Motors is losing money on every electric vehicle, a situation that it hopes to change by 2025, though the path is far from certain. Ford’s EV line is expected to lose $4.5 billion this year, up nearly 50 percent over last year… Ford’s Model E segment is losing $66,000 on every EV they sell, while competing firm Rivian is losing just under $32,000 per unit sold. By the time gas-powered bans and EV mandates go into effect, the Big Three will likely still be losing billions of dollars…

“The Big Three already pay nearly 20 percent higher labor costs than nonunionized foreign automakers with plants in the United States, and nearly 45 percent higher costs than Tesla… If the United Auto Workers succeeds in getting its way, it’s possible that the Big Three may shrink to the point of irrelevance, if not fade into the sunset altogether.”

Steve Delie, National Review

On the bright side...

Whales, From Above.
New York Times

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