For almost seven weeks already, strikes have been paralyzing America’s ‘big three’ automakers. Now, the United Auto Workers (UAW) union has announced that an agreement in principle with the ‘big three’ has been reached.
Overall, the agreement still has to be ratified by the workers, but that can last a few weeks. According to the UAW, all workers see their wages rise by 25%, complemented by an inflation correction to a final result of 30% spread over the next four years. Interim workers, who are usually underpaid, get rises up to 150%, and pensioned people get additional bonuses, but that can be different between the companies.
The simultaneous strike in the ‘big three’ plants in the US was the first in its 88-year-old history. It got much attention in the States, and even President Biden and Donald Trump went to the workers to offer their support.
The deal is a significant victory for the union. UAW President Shawn Fain: “We told the car manufacturers that they urgently had to do something, and they did. We have obtained results that nobody held possible.” This result is a big boost for Fain, who was elected UAW President on the promise of a far more active union.
In a last call, he had threatened to spread the strike in all Ford plants, also the most profitable ones, and Ford had to give in as the first of the big three. According to estimations of Deutsche Bank, the strike has cost Ford alone more than one billion dollars. The damage for the other two seems even bigger.
Stellantis and GM follow
Two days after Ford, last Saturday, Stellantis concluded a provisional agreement with the UAW. The Group has also engaged itself to create 5 000 new jobs, while it foresaw a workforce reduction by closing its Belvidere plant in Illinois. The plant apparently stays open and will build a new vehicle, Rich Boyer, UAW Vice President, proudly announced.
Yesterday, GM was tacking to. Its plant in Arlington, Texas, was also included in the strike. The manufacturer has just published its Q3 results with revenues superior to the forecasts.
The UAW was increasing the pressure on GM by going also on strike in an assembly plant in Tennessee. “We are disappointed in the unnecessary and irresponsible refusal by GM to come to a fair agreement,” Shawn Fain declared.
In a reaction, GM CEO Mary Barra accused the UAW frontman of planning additional actions to put himself in the spotlight. Now, she seems to have softened her tone of voice: “GM is satisfied to have come to a principal agreement with the UAW. It allows us to invest in the future and provide good jobs in the U.S. I can’t wait to see everybody return to work.”
The UAW has already announced that all striking workers will be asked to start to work again, even when the ratifying votes haven’t taken place yet. The movement started on the 15th of September, and at a certain point, more than 45 000 workers on the 146 000 UAW members within the big three were on strike.
The turnaround apparently began when UAW switched the strike movement from secondary and less important plants to the most important (and beneficial) ones at each manufacturer.
Warnings fell on a cold stone
At the beginning of the strike, the top managers of the manufacturers warned that their companies would become uncompetitive if they had to consent to the rise in wages. At that time, Ford was offering a raise of 9%.
Workers in other (mostly more recent) industry companies are paid less because their union membership is very low. The ‘Detroit three’ explained that they needed the profits they made recently to win the ‘electric battle’.
“Toyota, Honda, Tesla, and all the others adore this strike because the longer it takes, the better it is for them,” said William Clay (Bill) Ford, great-grandson of Henry Ford. But the workers and the union didn’t give in.
During the financial crisis in 2009, many workers agreed to tighten their belts to save their companies. Since then, they haven’t gotten many pay raises while their companies (and the executives) accumulated profits and bonuses. Now it’s high time they get rewarded, too, they claim.
“The workers never had so much leverage as today,” says Professor Susan Schuman, working relations specialist at Rutgers University, talking to AFP. “Workers made huge sacrifices in the car industry when the whole sector had to be saved after the 2008 financial crisis. Now that everything is going better again, the managers received a lot of money, and the workers want their part of it.”
President Biden, supporting the workers from the beginning, concluded: “These agreements reward the workers in the car industry who have sacrificed a lot to save the sector and to make it continue working during the big economic crisis in 2008-2009.”
Also, in Canada, the local Unifor union had 8 200 of its member workers in two Stellantis plants, striking for better wages and higher pensions. The strike started after negotiations failed. A few hours later, Unifor announced a principal agreement.
Details of the agreement aren’t known yet. Still, Unifor President Lana Payne said that the agreement was a good response to “the most important economic demands of the union and specifically at Stellantis”.
Unifor put the pressure on GM and Stellantis after it had reached an agreement with Ford earlier on. An agreement with GM was met at the beginning of October after a strike lasting only 14 hours. This agreement foresees a wage hike of almost 20% for the production workers and 25% for the specialized jobs.