UAW opens contract talks in an angry mood
DETROIT — The three Detroit automakers and the United Auto Workers union have begun negotiating a new labor contract in what could become the most contentious talks between the two sides in perhaps half a century.
The discussions, which formally started Thursday, come as General Motors, Ford Motor and Stellantis have posted a long streak of strong profits in North America, and after the UAW elected a president who has vowed to win back many of the wage and benefit concessions the union has ceded over the last two decades.
Shawn Fain, an outsider candidate, prevailed in an upset election victory over the incumbent UAW president this year largely by promising to take a more militant approach to contract negotiations than his recent predecessors. Since then, he has expressed a readiness to shut down factories to achieve the goals of the union, which represents 150,000 hourly workers employed by the three Detroit companies.
“If the Big Three don’t give us our fair share, then they are choosing to strike themselves,” Fain, 54, said Wednesday as he greeted workers ending their shift at a GM electric vehicle plant in Detroit. “We are not afraid to take action. Our union is united. We can’t be afraid to stand up and fight.”
A day later, Fain underscored his view by breaking with tradition and declining to take part in the usual ceremonial opening of negotiations, where in the past, the UAW’s president shook hands with the automakers’ CEOs as a gesture of harmony for photographers and television cameras before the two sides got down to bargaining.
“I’m not shaking hands with any CEOs until they do right by our members and we fix the broken status quo,” Fain said.
The bargaining is taking place as the labor movement is showing renewed strength in the United States. A strike by Hollywood writers against movie and television producers just entered its third month. Hollywood actors went on strike Friday. Graduate student teachers — some represented by the UAW — have been on strike at universities across the country since April. Hotel workers in Los Angeles walked off the job for three days in June.
In the last few years, more than 300 Starbucks stores as well as some Trader Joe’s stores, Chipotle restaurants and an Amazon warehouse in New York have unionized. The Teamsters union is threatening to strike against UPS in August if the two cannot agree on a new contract.
“We are seeing in very diverse workplaces a new interest in unions and a willingness to strike,” said Harley Shaiken, a professor emeritus at the University of California, Berkeley, who has followed the labor movement for more than three decades. “What we don’t know yet is how large this movement is going to become and how far it is going to go.”
In Detroit, the contract talks are playing out amid a momentous transition to electric vehicles.
GM, Ford and Stellantis have been investing billions of dollars in new technologies and battery plants, although so far, they have introduced only a handful of new EVs, sales of these vehicles are growing but low, and none of the three automakers has yet made money off EVs.
This transition presents a concern for the union because EVs have far fewer parts than conventional autos — they have no exhaust system, no transmission, no fuel system — and require fewer workers to produce them. GM, Ford and Stellantis have started building battery plants with joint-venture partners, which are not automatically covered by the UAW’s labor contract.
The union has organized a GM battery plant in Ohio, but workers there must negotiate their wage rates and terms separately from the main UAW agreement.
“Electrification presents problems,” said Earl Fuller Jr., the GM chair at Local 160 in Warren, Michigan. “We see jobs going away, and that needs to be addressed.”
While investing heavily in EVs, the automakers are still generating substantial profits* off sales of pickup trucks and SUVs, helped by near-record prices of new vehicles. Over the last 10 years, GM and Ford have typically made a pretax profit of $7 billion to $11 billion a year in North America. Stellantis, the smallest of the three, has usually earned somewhat less, although its pretax results in the region topped $13 billion in 2021 and 2022.
Shaiken said the union had considerable leverage in the negotiations. “The stakes are very high for the auto manufacturers with this EV transition taking place,” he said. “A strike could be very costly for the companies.”
In his estimation, a strike is likely but not certain.
The automakers maintain that they bear a disadvantage in labor costs. According to Ford, its hourly cost of UAW labor is $64, and it estimates that is $9 more than the labor cost for foreign-owned automakers with nonunion plants in the United States, and $14 to $19 more than that of Tesla, which also uses nonunion workers.
In the past, GM, Ford and Stellantis have often lost money or made little. Each needed concessions from the union to survive, and the union steadily agreed to many of the automakers’ demands in a series of contracts beginning in 2003.
The cost of health care for UAW retirees has been shifted from the automakers to a union trust fund. The union agreed to allow the manufacturers to start new hires at about half the $32 hourly rate that veteran workers earn. New workers get 401(k) accounts for retirement instead of guaranteed pensions. While the manufacturers have been paying substantial profit-sharing bonuses — sometimes more than $10,000 for each worker — the UAW has gone without costof-living adjustments that in the past protected workers from inflation.
In contract talks four years ago, the union sought to regain ground on those issues. The automakers agreed to increases in hourly wages and profit-sharing, improved terms for temporary workers and modified wage tiers but stopped short of scrapping them for a single wage rate.
Workers at GM also demanded that the company reverse a plan to close a factory in Lordstown, Ohio, and went on strike for 40 days but ended up ratifying a contract that allowed the shuttering of the plant.
The 2019 contract did include provisions for GM to invest $3 billion in its plant in Detroit, which had also been designated for possible closing. The money was used to convert the site into GM’s flagship EV plant, now called Factory Zero, which produces an electric Cadillac SUV as well as the electric GMC Hummer.
Margaret Hudgins-Washington, 56, a battery operator at the plant, was one of several dozen who stopped to talk to Fain on Wednesday. She has worked there for about a year, makes about $16 an hour and wants to see an end to the two-tier wage structure.
“Our workers have regressed with inflation,” she said. “So I think we need better pay.”
She and many others uniformly endorsed Fain’s tougher approach.