By Edwin Buiter
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America went on strike Sept. 15. In a historic first, the UAW went on strike against the three major American automobile manufacturers simultaneously: General Motors, Ford, and Stellantis. The UAW, which hasn’t gone on strike since 2019 according to NBC News, is demanding better pay and benefits.
One of the primary demands of the UAW is an increase in pay. The big three automakers have all made record profits in recent years, and workers are failing to see increases in pay. The UAW is asking for a 36% increase in pay over the next four years, according to The Associated Press. The UAW is also asking for benefits it gave up to manufacturers during the 2007-2009 financial crisis. Among these benefits is cost of living adjustments, or COLA, which would adjust worker income based on inflation. Another demand of the UAW is the removal of the tiered wage system, in which workers who had been at the company a certain number of years make more than newer hires, despite doing the same work. The manufacturers have been slow to make concessions to the UAW saying they need to invest profits into increased electric vehicle production and transition.
On Sept. 23, the UAW expanded their strikes against the manufacturers after having limited success in negotiations. 5,600 union workers have joined the initial 13,000 to walk out of work and join the strike. However, the strike against Ford was not expanded due to the company making more progress in negotiations with the union, according to the UAW website. The strike is targeting an assembly plant at each of the three manufacturers, and the expansion is targeting GM and Stellantis parts distribution centers, which provide parts to assembly centers as well as dealerships.
The strike is likely to have long term effects on automobile production and the supply chain. Striking at parts distribution centers leads to parts suppliers slowing or halting production, and if the strike continues longer, vehicle production will slow or stop. Initially, the effects will be felt by dealerships unable to get parts to repair customer vehicles. Once the supply of new vehicles runs out, the cost of cars will begin to rise. The UAW is hoping to use this consumer and supply chain pressure as leverage against the automakers, to quickly come to a deal that meets their demands.
