In the USA, the powerful United Auto Workers union is flexing its muscles: For the first time, the factories of the three major car manufacturers are going on strike at once. The collective bargaining conflict could also put US President Biden in trouble.
In a first-of-its-kind step, the influential United Auto Workers (UAW) union is simultaneously going on strike at plants belonging to the three major US car manufacturers General Motors, Ford and Stellantis. The work stoppages began on Friday night after the deadline for collective bargaining expired. The union has around 150,000 members.
A prolonged nationwide strike in the auto industry could have a significant impact on the US economy. The labor dispute also puts President Joe Biden in a quandary a year before the next race for the White House.
Significant wage increase and social benefits required
The UAW’s main demand in the negotiations was a 36 percent wage increase over four years. The original demand was 40 percent – because the income of the top management of the large car companies had grown by this amount.
The car manufacturers were prepared for increases of up to 20 percent over a period of four and a half years. UAW Chairman Shawn Fain, elected in March, argued that these offers were inadequate given inflation and the companies’ profitable situation.
Ford boss defends himself against demands
Ford CEO Jim Farley said in an interview with business broadcaster CNBC on Thursday that his company could not pay the increase demanded by the UAW without sliding into bankruptcy. The union countered on the online platform X (formerly Twitter) by pointing out that Farley received an income of $21 million last year. The union is also calling for the return of some benefits that were cut after the 2008 financial crisis.
The strike began at GM plants in Missouri, a Stellantis plant in Ohio and a Ford factory in Michigan. The US car giant Chrysler belongs to the Peugeot group Stellantis. The initial work stoppages affected several popular models such as the Jeep Wrangler and Ford Bronco. The UAW typically strikes the auto companies individually rather than simultaneously. Now all three companies do not know which of their plants could stop work next.
Biden in a quandary
President Joe Biden, who has traditionally presented himself as pro-union, now faces a dilemma. A setback to the US economy could hurt his hopes of re-election in just over a year. In addition, his ambitious environmental plans to expand the production of electric cars in the USA are one of the triggers for the strike.
The UAW recognizes that moving away from combustion engines could lead to the closure of traditional plants. There are disputes over income in new locations such as battery factories, which are often operated as joint ventures with companies from Asia. The workers at electric car competitor Tesla are not unionized.
Biden spoke with Fain and leaders of the auto companies on Thursday “about the status of the negotiations.” With the help of the White House, several potentially serious strikes have been averted in recent years, including in rail freight traffic. The Washington Post reported that the government is preparing support measures for industry suppliers that could be affected by the strikes.