Automobile: this threat of strike in the United States which worries the “Big Three”

Automobile this threat of strike in the United States which

These are tense union negotiations, made even more difficult by the biggest change the auto industry has seen in nearly a century: the transition to electric vehicles. The “Big Three” – the “Big Three”, namely General Motors (GM), Ford and Stellantis – have been feuding for several months with the United Auto Workers union (UAW), chaired by Shawn Fain, to design the new collective agreements before the deadline of Thursday September 14.

The two camps exchanged proposals and counter-proposals, with Shawn Fain publicly expressing his dissatisfaction. “If we arrive at 11:55 p.m. on Thursday without an agreement with any of the three major manufacturers, there will be a strike among the three manufacturers if necessary,” he warned on September 8 during a progress update. . The UAW union represents around 150,000 employees from the three groups, 97% of whom have agreed in principle to a strike.

According to Shawn Fain, elected in March 2023 as head of the union, employees deserve the same 40% salary increases granted to builder bosses. But the latest proposals from the “Big Three” showed levels well below.

“An insult”

Ford is offering the UAW an across-the-board wage increase of 9% over the four years of the collective agreement and the payment of a one-time bonus of 6%. A proposal rejected by Shawn Fain: “[Cette offre] represents an insult to the value [des employés], he estimated. The offers made by Ford and GM are called “insulting” by the president of UAW, given the considerable increase in profits of the automakers in recent years.

Stellantis, for its part, unveiled its offer on Friday September 8. The owner of Chrysler is prepared to grant a 14.5% wage increase, a one-time bonus of $6,000 in the first year, then $4,500 for each of the following three years. “It’s an evolution,” reacted Shawn Fain, former Stellantis electrician. “We’re going from 9% at Ford to 14.5% at Stellantis. It’s because we’re putting pressure. But it remains deeply inadequate,” he said. he scolded.

“It does not compensate for inflation. It does not compensate for decades of falling wages. And it does not reflect the very significant profits that we have generated for this company,” continued the unionist.

The UAW further wants the return of traditional pension plans and health care for all its members, says CNN. Workers hired before 2007 still receive these benefits, while those hired since then do not. The union is also demanding a limitation on the use of temporary workers and forced overtime, as well as more free time for workers, including a move to a four-day work week.

A disadvantage against Tesla?

As noted THE New York Times, United Auto Workers are increasingly concerned that the transition to electric vehicles will eliminate jobs and, over time, reduce wages and benefits. Automakers are also worried about the transition. GM, Ford and Stellantis are spending tens of billions of dollars to build new factories and scouring the world for battery raw materials, such as lithium.

Executives at these companies say the UAW’s proposal to raise wages significantly could put them at a significant cost disadvantage compared to Tesla, which dominates the U.S. electric car market and employs non-union workers.

The automobile industry is the largest U.S. manufacturing sector and accounts for approximately 3% of the nation’s economic output. Detroit’s three automakers operate dozens of factories that make about 500,000 cars a month.

A strike that would penalize car manufacturers

Given the persistent gulf between the two camps a few days before the deadline, many analysts see the prospect of a work stoppage. Harry Katz, professor at the School of Industrial and Labor Relations at Cornell University (New York), told AFP that Shawn Fain’s “acerbic” remarks, combined with the short time remaining, accentuate the risk of a strike.

The last work stoppage at GM dates back to 2019, it lasted six weeks. If a strike within the three automakers were called, it would be unprecedented, assures Gavin Strassel, UAW archivist at the Walter P. Reuther Library at Wayne State University in Detroit, interviewed by CNN. This would be the biggest strike the country has seen in twenty-five years.

The work stoppage would particularly have an impact on suppliers, which could lead to workforce reductions. A strike would also be costly for automakers. GM estimates the cost of the six-week UAW strike in 2019 at $2.9 billion. And that would be costly to the economy. The Anderson Economic Group, a research firm based in East Lansing, Michigan, calculated that a 10-day strike at the three firms would reduce their profits by $1 billion and employee wages by $900 million. , reports the New York Times.

The threat of a strike looms as the Detroit Auto Show, which should be an opportunity to present new electric vehicles, opens its doors to the public on Saturday September 16.