Looming Strike in the Auto Industry?

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Looming Strike? The Detroit “Big Three” dig their heels in.

The auto industry is currently facing the possibility of a strike when the United Auto Workers (UAW) contract ends on September 14th. The UAW has pressed the Big 3 automakers with “audacious” demands, including a 46% pay raise, a 32-hour week with 40 hours of pay, and a restoration of traditional pensions. The automakers have dismissed these demands as unrealistic, arguing that they’re facing fierce competition from Tesla and lower-wage foreign automakers as the world shifts from internal combustion engines to electric vehicles.

The wide gulf between the two sides could mean a strike against one or more of the automakers, which could send already-inflated vehicle prices even higher. A potential strike by 146,000 UAW members comes against the backdrop of increasingly emboldened U.S. unions in all industries. The number of strikes and threatened strikes is growing, involving screen actors and writers, sizable settlements with railroads, and major concessions by corporate giants like UPS.

The “Detroit Big Three” (General Motors, Ford, and Stellantis) have emerged as robust profit-makers, collectively posting net income of $164 billion over the past decade, $20 billion of it this year in 2023 alone. UAW President Shawn Fain has characterized the contract talks with Detroit’s automakers as a “form of war between billionaires and ordinary middle-class workers.”

A strike is looking increasingly probable, and a lengthy walkout in such a major manufacturing sector would be a hit to a vulnerable US economy. However, U.S. President Joe Biden said on Monday that he did not think workers at the nation’s three large automakers were likely to go on strike, despite a looming contract deadline later this month.

The possible auto industry strike could have significant impacts on both the industry and the economy. The outcome of the negotiations between the UAW and the automakers remains uncertain, but it is clear that both sides are taking a hard stance. It will be interesting to see how this situation develops in the coming weeks.

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Jim Kelly

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