The threat loomed. It came to fruition. After several weeks of unsuccessful negotiations around the implementation of new collective agreements, the United Auto Workers (UAW) automobile union has chosen three factories to initiate a strike movement in the United States. The General Motors plants in Wentzville, Missouri, that of Stellantis in Toledo, Ohio, as well as the Wayne, Michigan site, on the Ford side, were shut down this Friday, September 15.
Director of the program on worker power and economic security at the American think tank Roosevelt Institute, Alí R. Bustamante analyzes tensions in the automobile industry in the light of the transition to electric cars and in a context of rebirth of unions in the USA.
L’Express: Negotiations for the development of new collective agreements in the automobile industry have not been successful. In the absence of an agreement, a strike began in factories of the country’s three main manufacturers (Stellantis, General Motors and Ford). How can we explain that tensions are so high in the sector?
Ali R. Bustamante: There are three reasons. The first is that the American auto industry has performed very poorly over the past thirty years. As a result, employees did not benefit from progress over the period. On the contrary, they lost retirement benefits, for example. It has been a very tough time for auto workers, as well as the sector’s unions.
The second reason is that the inflation that we have been observing for a year and a half has eroded the purchasing power of employees. Particularly that of UAW members, whose contracts are renegotiated every four years. Current discussions therefore aim to enable them to improve their purchasing power and implement new mechanisms so that their salaries are adjusted in the event of high inflation before the end of the four years.
The third reason has to do with the fact that the Biden administration is massively subsidizing electric vehicles. However, in the aid that manufacturers benefit from to electrify their production, there are no preferences for unionized employees. The unions therefore feel threatened. This is why they are seeking to build protections not only for four years, but for the ten to fifteen years to come.
Electrification is therefore a major issue in these negotiations…
Yes, especially since the production of an electric vehicle is much simpler, which raises fears of numerous factory closures in the future. The Inflation Reduction Act (IRA), which is the main tool to support electricity, should help create around 100,000 jobs in the coming years. In comparison, UAW members represent nearly 150,000 people, and non-union members, around 120,000 people! This is a very important workforce in the United States. However, for the moment, around 12,000 jobs have been created in the electrical sector. This is mainly due to the fact that the United States has not invested in battery production until now.
The mobilization is focused around what we call the “Big Three”: what about Tesla? Could he be the big winner in this conflict?
If unions and employees are worried about the transition to electric, it is because they see the way in which Tesla has gone about it. The Tesla model is really the one they fear. It is based on the absence of unions and a much lower need for labor than among the “Big Three”. Through this manufacturer, employees and unions see what their future could be. Because if Tesla is experiencing such success, it is also thanks to the subsidies the group benefited from early on. This is an example of what happens when aid does not include provisions on union matters. Conversely, the employees of the “Big Three” hope to achieve a balanced model, in which the unions and the manufacturers are involved.
In terms of competition, Ford is the only one able to get even remotely close to Tesla’s market share in electric vehicles at the moment. For now, Elon Musk’s company remains light years away from the “Big Three” in the production processes of electric vehicles. By hiring non-unionized employees, they are also sure to benefit from advantages in terms of expenses, because the cost of labor is higher among the competition. Whatever happens, Tesla will benefit.
Do Stellantis, General Motors and Ford see Tesla as a model in the United States?
Yes. In recent decades, all the new factories created in the United States by automobile manufacturers, whether American or foreign, have been located in the Southern states, where unions are much weaker. The UAW has fully understood this strategy: this is the reason why this organization is so keen to capitalize on the current period. She hopes to preserve her role in the future.
The American auto industry is not the only one experiencing a potentially historic strike. In 2022, the railway workers threatened to cease their activity. A movement is also stirring Hollywood screenwriters today. In September you published an analysis on the rebirth of trade unionism in the United States: how do you explain the phenomenon?
At the end of Covid and for the first time since the Great Depression, the American government took recovery measures. After the 2008 financial crisis, it took about ten years for the American economy to get back on its feet and recreate all the jobs that had been lost. In less than a year, these recovery measures made it possible to return to pre-pandemic employment levels. This has created an unprecedented situation on the job market, with a historically low unemployment rate and major wage increases, especially for the lowest paid. This is a unique moment in the history of the United States, because periods of recession until now tended to result in austerity policies.
In the event of a strike, American law allows temporary workers to be hired to replace staff. But in a context which is approaching full employment, it becomes difficult to find replacements. Employees therefore have significant bargaining power in the labor market. We have already seen this with what has been incorrectly called the “Big Quit” [NDLR : la grande démission], during which they massively left their jobs to find another better paid one. Unions are now also benefiting from this strength of employees in the labor market. The level of support for unions is historic, as is their development.
A little over a year before the presidential election, what role can these mobilizations play on the political level? To what extent are they likely to weigh on the re-election of Joe Biden ?
Auto unions have always played a big role in the presidential election. This is due to a simple reason: the bulk of the sector is concentrated in the state of Michigan, whose vote swings between the Republican or Democratic party. Two elements will be central in the months to come: the first will be that of economic stability. Will inflation return? And if the automobile strike is massive, will it be likely to disrupt the country’s economy? Probably not on a large scale, but it could drive up the cost of cars. All of this could have a negative impact on Biden’s re-election. But at the same time, if the administration supports the UAW, it could help the Democratic camp secure Michigan, which is a key state in the presidential election.