Gears Turn in the Automotive Industry: Auto Worker Strikes Halt Business

Intense labor movements have been making global headlines recently; you might be aware of the strikes in Hollywood and the film industry, but let’s shift gears to the Three Giants and United Auto Workers (UAW). UAW has taken a bold stand against automotive giants - General Motors, Stellantis, and Ford. Select plants of these powerhouse companies are facing targeted strikes, all unfolding after the union’s contracts expired two weeks ago.

Since July, UAW and the automakers have been discussing new labor contracts. However, there has yet to be an agreement reached. In total, Stellantis has now laid off more than 1,300 workers due to the strikes. Similarly, Ford has laid off over 1,900 workers and GM about 2,300, affecting their workforce and approximately 13,000 employees at 90 parts suppliers of Ford.

Operations have stopped at three Ford plants in Michigan, Chicago, and Kentucky, two GM plants in Michigan and Missouri, and a Stellantis plant in Ohio. Furthermore, UAW members are striking at 38 GM and Stellantis spare parts warehouses across the US. The strikes aren’t confined to the USA; plants in Canada are also experiencing work stoppages. Canadian auto workers took a stand against General Motors as approximately 4,300 members of Canada’s Unifor union initiated a strike after the carmaker failed to secure a temporary agreement before the contract deadline. This walkout adds significant pressure on GM. 

Around 34,000 out of 150,000 UAW members employed by the three companies are on strike. The companies have offered wage increases of over 20% over four years and have proposed reducing the time for new workers to reach the top wage from eight years to four. However, the union demands include 36% raises over four years, ending wage tiers, a 32-hour workweek with 40 hours of pay, and traditional pensions instead of 401(k) plans. They also want cost-of-living raises restored. Post-2007 UAW hires missed out on defined benefit pensions and enjoyed fewer health benefits. To curb costs, the union gave up the general pay raises and cost-of-living adjustments. Top assembly workers earn $32.32 an hour, while temporary staff start at $17. Despite the disparities, full-time workers receive profit-sharing checks varying from $9,716 at Ford to $14,760 at Stellantis. Beyond immediate concerns, the union is also worried about potential job losses as automakers gear up production of electric vehicles.

As the Michigan economic consulting firm Anderson Economic Group (AEG) reported, the strike's impact on the economy has been significant. By the end of the third week, the losses incurred due to the union’s strikes against Ford, General Motors, and Stellantis amounted to a staggering $5.5 billion. The breakdown reveals the extent of the damage: workers suffered losses of $579 million in wages, automakers collectively lost $2.68 billion, dealers and customers faced a combined loss of $1.26 billion, and suppliers alone bore a substantial hit, losing $1.6 billion. The automotive sector contributes approximately 3% to the overall US economy’s gross domestic product, encompassing its entire production of goods and services.

The ongoing strikes between the United Auto Workers and the Three Giants have taken a toll on the automotive industry nationally and globally. With losses reaching billions, it’s clear that the situation is unsustainable. The financial strain and supply chain disruptions are causing significant threats to businesses and the economy. This challenging time emphasizes the delicate balance between workers’ rights and industry sustainability, underscoring the need for collaborative solutions to navigate challenging times.