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The Automotive Industry Could Grind To A Halt If This Major Union Strikes

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• The United Auto Workers (UAW) are in negotiations with the Big Three automakers, Ford, General Motors and Stellantis, over the contracts of 150,000 autoworkers that are set to expire on Sept. 14, according to a UAW announcement.
• If the UAW were to strike, it could result in an economic loss of $5.6 billion after just ten full days, with workers losing out on a total of $859 million in wages, according to an analysis by the Anderson Economic Group.
• “Either of the two most likely outcomes of the UAW-Big Three negotiations are not encouraging,” Peter Earle, an economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “If the union gets its way, it means billions of dollars in additional costs for an industry with its brightest days behind it. If the firms resist the union’s demands, of course, it means strikes.”

One of America’s largest unions is embroiled in negotiations that could soon bring the entire automotive industry to a halt.

The United Auto Workers (UAW) are demanding higher wages, support for retirees, greater job security and an end to wage tiers in negotiations with the Big Three automakers, Ford, General Motors and Stellantis, according to a UAW announcement. Shawn Fain, UAW president, announced Tuesday that the union would be holding a vote next week to authorize a strike, allowing union leadership to call a strike at any point before the contract of 150,000 autoworkers represented by the union expires on Sept. 14.

“Either of the two most likely outcomes of the UAW-Big Three negotiations are not encouraging,” Peter Earle, an economist at the American Institute for Economic Research, told the Daily Caller News Foundation. “If the union gets its way, it means billions of dollars in additional costs for an industry with its brightest days behind it. If the firms resist the union’s demands, of course, it means strikes. The pandemic, followed by two years of inflation at 40-year highs, have encouraged labor-management brinkmanship.”

If the UAW were to strike at all three companies, the total economic loss after just ten full days would be $5.6 billion, with workers losing out on a total of $859 million in wages, according to an analysis by the Anderson Economic Group. The UAW struck against just GM in 2019, sending Michigan into a single-quarter recession.

“The UAW wants to unionize a number of factories that are currently outside the purview of their agreements with automakers,” Earle told the DCNF. “The automakers, meanwhile, are trying to keep costs under control as a series of paradigm shifts, including the continuing development of electric vehicles, develops.”

The UAW and Biden have been at odds over the president’s green energy agenda, which includes huge subsidies for the electric vehicle (EV) industry. The UAW has held out on endorsing the president for the 2024 election, citing the low wages of jobs related to EV manufacturing due to the fact that they are not covered under current union deals, referring to such wages as “poverty-level.”

“Bidenomics has already contributed to inflation and supply chain disruptions in many ways, and Americans should be concerned about further supply chain disruptions to the economy, this time particularly around the automotive industry as a result of aggressive union demands,” Austen Bannan, an employment policy fellow with Americans for Prosperity, told the DCNF. “If their aggressive demands are met, costs may increase significantly over time for consumers, but strikes could cause the same.”

Sept 14 isn’t a reference point. It’s a deadline.

Tick tock ⏰#UAW #strikeready #1u pic.twitter.com/V1nqclXBdu

— UAW (@UAW) August 15, 2023

“The discussions between the Company and the UAW’s bargaining team continue to be constructive and collaborative with a focus on reaching a new agreement that balances the concerns of our 43,000 employees with our vision for the future — one that better positions the business to meet the challenges of the U.S. marketplace and secures the future for all of our employees, their families and our company,” Stellantis told the DCNF.

The Big Three make up 40% of the U.S. automotive market and have enough pull so that if union workers get a raise in wages and benefits, other nonunion employees in the automotive sector will most likely see gains, according to Fortune.

“This exemplifies the problems with collective bargaining and its one-size-fits-all approach to taking care of employees,” David Osborne, a fellow at the Institute for the American Worker, told the DCNF. “We’d all agree that high-performing employees should be paid well, but when union executives insist on pushing ‘green manufacturing’ or fighting climate change at the bargaining table, it sends a mixed message to management about what employees want. Before going on strike, rank-and-file employees should ask themselves whether those running UAW have been helpful or harmful to their cause.”

“We’ve been working hard with the UAW every day to ensure we get this agreement right for all our stakeholders,” GM said in a statement to the DCNF. “We know that our U.S. economic impact supports more than six jobs for every job created by GM. We take that responsibility very seriously, and we continue to bargain in good faith each day to support our team members, our customers and dealers, the community, our suppliers, and the business.”

“Ford is proud to build more vehicles in America and employ more UAW-represented hourly workers in America than any other automaker,” Ford told the DCNF. “We look forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.”

The UAW did not immediately respond to a request to comment from the DCNF.