Well, folks, the United Auto Workers went and did the thing they said they were going to do. One plant from each of the Big Three is now on strike, and more could follow if the automakers don’t come back to the table with terms the union finds more amenable. Sound like a threat? That’s exactly the point.
Today’s morning roundup looks at the fallout from the strike from a few angles. Let’s get right down to it.
Welcome To The Stand Up Strike
Unable to reach a deal with General Motors, Ford and Stellantis at the stroke of midnight, the UAW has ordered a historic “stand up strike” at three different plants—historic because it’s the first time all of the automakers have been hit by this, ever.
Here’s how this works: UAW workers at those three plants are no longer working, full-stop. The rest of the American auto industry is still business as usual. But over time, more plants—more locals, in union parlance–could be called to join the strike. You’d imagine you’d be have to be pretty tactical in the three plants you pick for this, and the UAW truly did that:
- GM Wentzville assembly in Missouri (Chevy Colorado and GMC Canyon)
- Stellantis Toledo assembly in Ohio (Jeep Wrangler and Gladiator)
- Ford Michigan assembly plant and paint (Ford Bronco and Ranger)
That’s where we’re at now. And all of those are important, volume-selling trucks and SUVs, but not the most important, most volume-selling trucks and SUVs. Not yet. It’s basically Shawn Fain saying, “Sure is a nice F-150 factory you got there. Would be a shame if something… happened to it, huh?”
The Toledo strike in particular feels like a very calculated middle finger to Stellantis, where labor relations are said to be the poorest and with workers drawing particular ire at the astounding $26 million compensation of CEO Carlos Tavares. That strike hits Jeep’s historic hometown and its most iconic current model—not to mention a profitable, popular vehicle. That one feels personal.
What does this mean for consumers? At the moment, probably nothing. But the longer these strikes go on—not to mention if they grow—the flow of those models to dealers will run out, leaving buyers with another supply crisis and higher prices, while guys like Stellantis CEO Tavares stand out on the freeway with their empty pockets turned out trying to hitch a ride to a bus stop in Chicago. OK, maybe not the last one. But the impact won’t be immediate, but the longer this takes, the more it will hurt the automakers’ bottom lines.
What Does The Union Want?
From the New York Times‘ Dealbook, here’s a quick refresher on what the union is after:
- “A 40 percent pay raise over four years, which would bring wages for many full-time workers to roughly $32 per hour.
- Reinstate cost-of-living adjustments, which have become a central plank in contract negotiations amid high inflation.
- A four-day workweek, a demand that’s grown in popularity since the pandemic scrambled workplace culture.”
I’d add that the four-day workweek is a tactical move that would likely result in more auto workers being hired, and thus a bigger union. It needs that because membership has been declining for decades now.
The union also wants an end to the hated tiered employment system that stratifies worker pay based on experience. As a quick refresher, the UAW is asking for a number of benefits they sacrificed to help keep their employers afloat during the Great Recession, and in recent years union leadership was too busy being corrupt and going to prison for corruption to fight for these things. Now, they have a guy up top who quotes Malcolm X on his social media channels.
Moreover, they’re fighting for their futures—union representation and commensurate pay at the EV battery plants (which are often joint ventures) to ensure that the likely electric auto industry of tomorrow comes with the fair pay and good jobs it once did.
Here’s Why That’s Bad News For Joe Biden
President Joe Biden has called himself the “most pro-union president in history” but also the biggest environmental champion America’s had in decades. (Feel free to disagree with me here, as is your right, but: I have my issues with how the EV tax credit scheme turned out, but I do think this administration has done an impressive job with green investments.)
The thing is, the Washington Post has the smart take about how those two things may be at odds right now—and it all comes down to the battery plant thing above. After all, none of the tax incentives around that are tied to whether the plants are union or not. And Biden’s relationship with the UAW is considerably frostier than you’d imagine:
Biden’s push to help the auto industry transition to clean energy technologies has become a key sticking point for autoworkers, who fear the shift to electric vehicles will mean fewer jobs and lower pay. The UAW — which has pointedly withheld an endorsement of Biden’s reelection — has specifically chided the administration for facilitating billions of dollars in tax incentives and loans for automakers without requiring them to share the benefits with union laborers.
Fain’s harsh comments about Biden’s approach to the EV transition earlier this year created a sense of tension with the White House, which did not know the upstart union leader well before his March election, according to a senior administration official who spoke on the condition of anonymity to discuss internal deliberations. Still, Biden invited Fain for a half-hour meeting in the Oval Office this summer and relations have improved in recent months, the official said.
Biden, who sought unsuccessfully to include certain pro-union provisions in the Inflation Reduction Act, has publicly urged the carmakers and electric battery companies to hire union workers and pay them a fair wage.
“We’re going to transition to an electric vehicle future made in America — and it will protect and expand good union jobs,” Biden wrote on X, formerly known as Twitter, on Tuesday.
As that story notes, unlike the railway strikes last year (which ended with real criticism of Biden on the labor side) it’s not clear how much the president will be able to intercede this time. And he he’s come off vaguely neutral so far; Biden “has not publicly endorsed the UAW’s list of specific demands or criticized the auto companies’ offers,” the Post said.
Which side are you on, boy?
The Wider Economic Effects Of A UAW Strike
Will America be sent into a recession if our supply of Wranglers runs out? Unlikely. And to be clear, I don’t think this will turn into some protracted, war-of-attrition long-term shutdown like the Hollywood strikes. Different product, different issues at stake (mostly) in the auto industry, and it’s in nobody’s best interest to drag this out forever.
Here’s the New York Times again, gaming out the possible impacts of this action:
According to an August report from the Anderson Economic Group, a 10-day strike against all three automakers would result in total economic losses of $5.6 billion. Around $3.5 billion of that would result from lost wages and production, with the remaining $2.1 billion borne by consumers, who wouldn’t be able to get necessary repairs and replacement parts, and by dealers and their employees.
Mr. Zandi said a six-week strike would have a “measurable but ultimately modest” effect on overall gross domestic product, perhaps a decline of two- or three-tenths of a percentage point. But he said damage would start to mount, given economic headwinds like rising interest rates, the return of student-loan repayments and a potential government shutdown in October.
If the strike lasted through the end of the year, Mr. Zandi said, “that would be enough to push this economy close to the edge of a recession, given everything else that’s going on.”
A 40-day strike against General Motors in 2019 had limited economic effects. One key difference this time is inventories. Total domestic car inventories, which includes new and used cars, have increased from a record low in February 2022 but are less than a quarter of what they were in September 2019.
Again, I think a strike through the end of the year is quite unlikely. But it’s going to sting. It’s also going to sting consumers if it drives up car prices, which I don’t have to tell you have been through the roof lately.
And, of course, the strikes will have wider impacts on suppliers as this a global, interconnected business. Here’s Bloomberg quoting the U.S. boss for Aisin, the Toyota affiliate that isn’t unionized here but has plants everywhere and makes all kinds of things:
“We would see a direct impact,” Scott Turpin, president of Aisin’s US subsidiary said Wednesday. “If they were to shut down or idle their facilities, obviously that would curtail our shipments to them,” he said of General Motors Co. and Stellantis NV.
“We do purchase from companies that also are direct suppliers to the Big Three,” he said in an interview at the North American International Auto Show in Detroit. “We’ve got a handful of suppliers that are fragile, so we worry about what might happen to that supply base.”
And that’s one example of many just in the auto industry.
Your Turn
What do you think happens next? What plants do they strike on after this, and who blinks first here?
Answer is simple: enrichen The Mexican economy. Move the car factories South of the fence, and tell Fain & The UAW members to take an aerial intercourse.
Even without moving any more work outside the US, the move to evs is going to cut the current UAW workforce drastically. The battery plants are all joint ventures with Asian companies and will have separate, less lucrative wage/benefit deals even at the ones that are unionized.
Which company do you lick the boots of, I mean, work for? You sound like a management troll.
either a management troll or someone deeply unserious who doesn’t understand things.
Found Farley’s burner account.
Win the battle lose the war. The Union has to keep in mind if the strikes fuck over to many suppliers, citizens, car buyers they lose the general public support. And if the last few years have taught us anything union support from the non union public is weak at best. If the big three have the desire and the balls hold out until the strike passes off everyone. No president Biden. Then God forbid felon in chief Trump a business man no fan of unions guts the charity flow allows big 3 to go overseas or anti union with the support of short term thinkers and the true death punch no more unions. It could happen. Don’t ignore possible things because you don’t like them and think everyone else thinks like you. Heck big 3 could shutdown every US plant they want bring in foreign built cars, maybe even rebrand them as theirs. Look what happened to the steel industry.
This can’t actually be considered a serious point. It’s like you didn’t read the article at all.
Saw it posted by a newspaper
yeah….no you didn’t.
Bad take Dave strikes again. His comment history is one of massive ignorance.
And yet the big three laid off 3,000 at nonstrike plants with more to come and no supplemental unemployment benefits due to the strike. With promises of more to come.
Yeah, let’s blame that on the UAW instead of the assholes making millions.
I am not blaming anyone I was just speculating on the story as to what could happen if the 2 sides don’t discuss it rationally but instead pose for the media and personal pride and attention.
You’re better off ignoring everything from that commenter.
The UAW sucks. Even other unions don’t like them.
What they should really do is demand that they make better cars. Demand that half the board is engineers and the other half labor.
The reason Ford/GM/Chrysler gets bad press is because their cars suck. If they made better cars, and decisions were actually made by engineers instead of accountants, maybe they’d be doing better.
I don’t know the conditions at every manufacturer or plant, but I can give my 2 cents and experience. I am a former tier 2 UAW employee. I was temp for a year and then converted. Some people hire just before me were temp for 2 years. Temp life is not the greatest as you don’t get all the benefits, but once converted I thought it was pretty good. Basically the best health care you could ever hope for. Exploded my knee and needed major surgery and a long recovery time with PT, $400 total out of pocket, mostly $25 copays. Bought a small modest house, not going to be in better homes and gardens but still nice. Bought some fun cars through the years, bought a new mid level truck at 1 point, cloth seats baby, and eventually a nice used boat. I grew my 401k pretty well during that time since the company auto contributed even if you didn’t. I used the tuition reimbursement they provided and took night classes to eventually get me where I am now.
I think the UAW should always advocate for more money and the best benefits you can get, but the work and pay were not that bad if you stuck around and did your job. Certainly not crippling like what is being reported. I think any provision to make sure you cannot get stuck in Temp status is the most important thing this contract should include. I have talked with my former union steward and even he thinks some of the demands are outlandish and he is not a fan of Fain’s theatrics. Hopefully some common ground can be found relatively quickly and it doesn’t decimate the entire SE Michigan economy and all the suppliers located elsewhere.
I continue to have no prediction about how this turns out, but I guess Fain really hates midsize trucks. 😉
The targeted plants are strategic but certainly not the most important, at least for Ford or GM. They did not go after the big, profitable trucks. Jeep has so much inventory, they likely are less worried than GM and Ford, both roughly around 50 days supply vs 75 days for Stellantis. Seems like more of a warning shot from the strikers so they can say they are striking but still not fully impacting operations.
I have a SMALL local dealer near me, he had 13 fucking broncos on his lot when I drove by two days ago. His entire large parking area in the back was over flowing with cars more than it did pre-pandemic. They stocked up for this and there is plenty of Ford product around. They have been offering discounts on their trucks for a bit, same as GM. I don’t think this strke will have any impact unless it goes for 4+ months.
um…bub, this is exactly what the article said
This whole thing could have been avoided if the workers got a few more pizza parties throughout the year.
Fain could probably use a Music Dance Experience
One point to consider. CEO pay has gone WAY up in the past 30 years. GM CEO makes 329 times as much as their average union worker. So that worker would have to work 16 years to make what Mary Barra CEO makes in a month.
I think worker pay should increase for all fields of work across the country, and CEO pay can be where it comes from. She got 29 million last year. I’m sure if she got 4 million it would still be a living wage for a CEO.
In the 1960’s, CEO pay was something like 35X what the average workers was.
Not sure why today’s CEOs deserve 10X that ratio.
They don’t
…but lets put this into perspective. Fine give Mary Barra 4 million and split the other 25 million among the ~50000 UAW workers. That works out to workers getting about $500/yr or <$0.25/hr. That amount will make no difference to the average worker and will only result in Mary seeking employment elsewhere. Neither of these things will be beneficial to the company, shareholders, or workers.
But Barra isn’t the only overpaid executive and it is bullshit that hard working Americans aren’t getting raises while CEOS, and other top execs do. Even if it was a symbolic gesture, it would still be the right thing to do.
I do totally agree that CEO pay is out of wack. I also think middle class wages overall are too compressed. Would be nice to see a more linear pay scale between janitor and CEO.
Even just that $500 means a lot more to the workers than the 25m means to Barra.
But isn’t this CEO raise just stock? And the rites to purchase the stock at a low price. Can’t sell it for over a year and if stock goes down bonus goes down? I am just asking it is what I read. So don’t jump all over me I had a rough week.
Maths!
She is overpaid because CEOs all sit on each others boards and get to decide CEO pay. And let her seek employment elsewhere – that’s what every worker that complains is told to do.
If you think CEOs have some crazy skill set that can’t be replaced you are naive. Spend anytime around corporate management and you quickly realize that most middle managers could easily do the CEOs job, and are often the ones actually making and executing policy. For most CEOs, rising to the top corporate job is about who you know and gladhanding your network more than anything else.
I think that the 32 hour workweek could easily be changed to a 36 hour workweek, which could work really well for both sides. You can do this via 3 twelves. Workers get even more days off. You probably get more productivity, since you generally assume some time lost as workers start and end their shifts.
Or, they could do what my workplace does for shift workers. 12 hour shifts with 3 day/4 day weeks. You get some guaranteed overtime every other week and more days off. The Big 3 could include that OT in their pay raise calculations, and the workers end up with more money and more days off, while still averaging 40 hours per week.
I don’t actually know how they run their operations, so this may not be as simple or feasible as I think, but it works in places that strive for 24-hour production.
Yep. Semiconductor fabs use the 12-hr shifts like you describe. It also reduces the number of shift changes to 2/day, reducing a chance of tasks getting dropped during handovers.
That’s actually where I work and why I think it would work well. And good add about the reduction in handoffs.
That said, I don’t know if it would work as well in auto manufacturing. I know the work and expectations are different. Lose the cleanroom gowning, but the work could be more physically demanding. Both have a lot of automation, but I don’t know if auto work requires extra downtime for equipment. And the gowning procedures certainly add time at the beginning and end of each shift that makes 12 hour shifts very attractive to the employer.
But I think I’d put it on the table if I were negotiating. At least from the manufacturer side, it’d look more attractive than 4×8 and would be a concession on that front.
Nah… Here’s a better idea… Work 40hrs spread over 5 days a week.
Shut up and do your job.
F*ck the Union.
Corporate boot can’t be that delicious, can it?
It’s about time that someone stood up for the middle class. The timing is perfect – hamstringing Biden to not be able to kneecap them like he did with the Rail union.
UPS got theirs not it’s time for the UAW to get a fair share.
It’s comical to see all the folks at rags like CNBC slinging propaganda left and right about it negatively affecting the economy as if decades of constant erosion of the middle class has not.
I wish the union folks the best of luck, its a fight for the future of our country. A fight about whether or not we want to have a strong middle class that can drive our country forward. A fight about whether or not a person who puts in an honest days work deserves the same compensation as the wall street pencil pushers.
The american public is fed up with the capitalizing of profit and the socializing of risk.
As far as car supply drying up and prices going up…SO WHAT?
Many middle class or working poor are already priced out purchasing a new car. Out of reach is out of reach, a few thousand doesn’t matter if it never was an option.
That is in fact what these fights are all about.
I award one Ron Swanson nod to you, my friend.
“Many middle class or working poor are already priced out purchasing a new car. Out of reach is out of reach, a few thousand doesn’t matter if it never was an option.“
Nailed it. Our family is your ‘ideal’ middle class, I work, my wife stays home, two kids, one family car and a company truck. We don’t have a huge amount of disposable income and a new car is not even remotely a possibility for us. I couldn’t care less if prices go up a bit from this, I’m not buying one any time soon anyway.
I honestly can’t fathom how a lot of people even make it day to day in this country anymore..
Socialism much, do you?
ICOTD: Idiotic comment of the day
My grandfather on my moms side came back from france after the war and took a job as a union rail road worker – he provided for his family and sent both my mom and aunt to college. They lived in a modest house but he was able to eventually afford a cabin and a winter townhome in Arizona.
My grandfather on my Dads side came back from North Africa and Italy after the war and purchased a GI Bill home – he worked as a union truck driver and was able to send my dad the first of their family through college.
People love to talk about the nostalgia of days gone by but they try and slap some anti labor slant on it like “socialism”.
The middle class built this country into what it is, at some point greed got the better of us and through programs like 401ks people slowly let corporate interests have too much pull.
It’s time to take a stand and decide if we want a middle class or if we are going to continue hollowing it out.
It sounds like perhaps you’ve decided what side you’ve chosen- through my shared experiences I suppose it’s pretty clear what side I’m on.
Similar story in my family. My grandfather on my Dad’s side was a Seabee, he was able to raise a family of 5 on his sole income of driving a garbage truck for the city. (That position doesn’t exist anymore, they’ve long since contracted that out).
My mom’s dad was a little younger, he did a few years in the Army as Korea was winding down. He was a factory worker, he was able to purchase a new house in the early 60’s in the town he worked in, also supporting a family of 5 on his income.
I work in the same area as both of my grandfathers did, in a more white-collar aspect of manufacturing. I have no kids and zero dept, and I would have to at least DOUBLE my income to be able to afford the cheapest single-family home in this town.
My parents were both born in 55, and they both had to work in order to provide the same. We blame the boomers, but most of them had to work too. Things started going to shit around 1970, a lot of boomers were still in high school.
I was born in 78, technically Gen X, but there’s a big overlap with old millennials too.
It’s way past time for the labor unions to totally disappear and stop bullying
Pay raises are EARNED not a requirement
I don’t have a problem with performance based bumps. If you’re reliable and do good work you should get paid more than someone that does the bare minimum and calls off two or three times a month. Cost of living increases should still be in there too though.
Does the UAW allow merit increases? Most unions are “time served”. I have personal experience in how sucky that is.
Somehow that doesn’t apply to the top brass. They get their $$ even when their plans fail miserably.
great troll, 10/10 woul laugh again
Who is going to stand up for the common worker? Capitalist driven executives won’t. And the US government clearly isn’t interested. So sure, we can get rid of unions, consolidate wealth, and allow America to accelerate our downward spiral.
… come back when you can offer input into a coherent adult conversation.
“Coherent adult conversation,” like calling everyone who doesn’t agree with you a socialist?
You really are just a bootlicking shitheel, aren’t you? Shut up, jackass. You’re contributing nothing of merit to this conversation except stirring shit.
Don’t be that guy.
How’s that corporate boot taste?
Bullying would be insisting that the folks with less power sign arbitration agreements. Bullying would be having one side with a legal team helping determine what they can get away with and the other side on their own. Bullying would be considering one person to have the same bargaining power as the side with the legal team and forced arbitration.
Unions just level the playing field.
Nope. Unions practice extortion, with legal protection.
Now, back to your PlayStation.
“Now, back to your PlayStation.”
Oh, this must be the adult conversation you were referring to. Belittling people who don’t agree with you. Super mature.
Won’t someone please think of the multibillion-dollar corporations?!? :'(
This has to be a joke. A very bad one, but a joke all the same. Or maybe you’re just a joke.
Biden is probably more pro-union than Trump. But he’s still a shill for big businesses. If Biden was truly pro-union, then our government wouldn’t have stopped railroad workers from going on strike.
Both sides are bought and paid for by the 1%. Republicans want outright Christian/corporate fascism, Dems want to maintain the status quo but make it a wee bit softer around the edges. So basically we get to choose between a boot on our throat or the continued slow erosion of the economic prospects of anyone but the 1%…but at least there will be a little more diversity in our oppressors, so….yay, I guess?
The 4 day work week is not a serious demand, its a tactic that Cons & Thieves use in negotiating. Ask for 3 things which can happen once we iron out the numbers and 1 ridiculous thing I will drop as a concession, giving up the 4 day thing is just to sucker them into the other 3.
I’d love the 4×10 work week to gain traction in the US, its becoming popular in Europe. Also like the modified school schedule where kids aren’t home all summer.
The Teamsters siding with the UAW, we’ll duh if the plant is shutdown you are not going to be picking anything up…
Regarding Fain not involved in negotiations, he should make an appearance or two, who knows if his guys are doing a job without seeing it first hand. Fain just sitting in his ivory tower posting updates is just like most of the incompetent corp mgmt elsewhere unaware of what’s happening in the trenches or if the employees are actually any good..
Their initial ask wasn’t 4×10, but 4×8, but compensated for 40.
Which isn’t as outlandish as it sounds, there are many studies that show this is effective and productivity and profits can actually increase, while also providing many benefits to the worker.
I actually have the VP of Operations on board with this, but he’s having a hard time convincing corporate, they’re all “live-to-work” types.
Those studies may apply to salaried creative types but an hour on the assembly line is an hour on the assembly line.
I don’t know if it’s been studied, but I’d be interested to see if there’s any change to reject rates if you reduce production hours. That may be why they use 8-hour shifts there; maybe they’ve found that they had reject rates increase if people worked longer hours per day.
If a longer day doesn’t hurt productivity or failure rates, a 36 hour workweek could be better for everyone. 3 days of 12-hour shifts would reduce the time spent getting going and getting ready to leave, so it would likely be more productive than 40 hours spread over 5 days. Of course, if 12 hours at a go leads to mistakes, it may not be ideal.
We run 12s in semiconductor manufacturing, though that’s certainly different work.
Have you ever worked on a line? How would you like to apply the same set of screws for 8 straight hours? Now think about having to do 4 more.
Like I said, it works in semiconductor manufacturing, where it’s 12 hours suited up in a clean room. That’s making sure the same tool is doing what it’s supposed to and moving stacks of wafers all day. I don’t know how equivalent the work is, but for four days off, people are good with it here.
But, like I said, I don’t know if it’d be ideal. Just another option to consider.
That said, you do make a good argument for the 4×8 shift. If we’re asking someone to screw in the same 6 screws 8 hours a day, they could probably use another day off.
His comment doesn’t say it wouldn’t suck. He’s talking about fail rates. And mental health/boredom/tiredness would definitely impact fail rates during the later hours of the shift. His point seems to be is there any data to use to define that as an actual occurrence, not just a reasonable supposition.
I understand. My point is that people might be able to do it but it would really suck. Many union members might not appreciate being forced into longer hours per day.
Yeah I agree. I haven’t worked on a line like that ever. The only line work I’ve done was a very small assembly facility building a specialty light box. So I can’t speak to that part of it. I think its the kind of thing that would be a good use of the union voting maybe?
This is why we work extra hard to develop assembly robots – remove the humans. No UAW.
… taking that job is a choice.
Yeah, 12 hr shifts for anything is a joke (I do understand certain fields it’s required, and have done it a lot myself) it depends on a lot of things/type of work/breaks/etc but what it comes down to is mental: You can’t wait to go home after a while (which feels like forever) and also after enjoying days off you’re dreading going back; and when you go back it’s a grind and miserable to get through til the next long weekend. Of course it’s all perspective I guess, because if someone loves their job, they never work a day in their life
I could see the argument for improvement on an assembly line as well. Sure, one may not screw together more widgets because the speed of the line will stay constant. However how many fewer times will someone miss a screw, or miss a torque for a screw because they are (ostensibly) better rested and happier?
The better rested/happier is one of the ideas a 4-day, 32-hour week is supposed to provide, so it could be applied more broadly than just “salaried or creative types.”
I hear you. I don’t have the answer as to how that could be successfully implemented in assembly line work, I’ve never done it. I work in mfg, but we are not an assembly line type industry. We could easily do it here, I would think the most logical would be split shifts where team 1 works Mon-Thurs, team 2 works Tues-Fri. We always have a good amount of people out of Fri and Mondays, and those are the least productive days, so I feel like that would be easy to implement.
Armchair business majors are funny
“The 4 day work week is not a serious demand, its a tactic that Cons & Thieves use in negotiating. Ask for 3 things which can happen once we iron out the numbers and 1 ridiculous thing I will drop as a concession, giving up the 4 day thing is just to sucker them into the other 3.”
My man, that is not a “Cons & Thieves” tactic. That’s how all negotiations go. Nobody asks for more by asking for the least and magically hoping for more. You gotta shoot for the moon and hopefully get a nice seat on the flight to 40,000 feet.
I’m excited to hear that Fain is only getting paid strike wages during this UAW clown circus… Gotta be one of the Brotherhood.
Why no mention of the Teamsters who have gone on record sayiing that they will honor the strike lines of the UAW. Seems that this could be a significant factor.
That was in yesterday’s Morning Dump! https://www.theautopian.com/how-tesla-made-gigacasting-the-most-important-word-in-the-car-industry/
Ah, so it was. Probably where I got the news initially. Still think it deserves wider dissemination.
Honestly I don’t care. The UAW is shit, none of the big 3 are selling any automobiles in the US currently that I want, and IF they do so in the near future it would probably be the Fiat 500e and that won’t be made by UAW.
I think the automakers make shit products, the UAW assembles their shit products for massive fees used to prop up the UAW organization instead of helping the workers it was created to help, and they both expect me to give a shit. Burn it all, get rid of the chicken tax and the footprint rule, let the non-union factories and the quality unions like the ones in Japanese auto factories in Japan win out.
It seems like you’re from modern times because you referenced the 500e, but everything else in your post is from 40 years ago. Weird!
I thought of a new UAW made automobile I would buy. Production version of the Wrangler Magneto concept. I’d subsequently remove the doors, tailgate, hard top (if it came with one) carpets, front fenders, etc.
What happens next is that Farley continues to publicly say that Ford will be bankrupt if they give the union what they want (while Ford starts making better counteroffers to the UAW). Stellantis and GM will each come to the table in earnest, each one hoping for first mover’s advantage on the deal.
When it all shakes out, I suspect that the 4 day workweek may be achieved. It’s really hard to say you can’t do that when you are also saying you’ll need fewer employees as you transition to EVs. The pay will probably come up less than the union wants. 15-20% with the 4-day or 25-30% without?
The real dark horse here is separated contracts. If they end up with different things, not only will there be direct impacts, but it could start to move the most experienced workers to the company with the best deal. Or perceived best (most money or best workweek could be in competition).
As an employee of a Tier 1 supplier for the Big 3 + the rest of the auto industry, including Europe and Asia, everyone is taking a 20% pay cut for the next weeks. When I say everyone, is everyone, even if you are working for Tesla as a customer. The bad side of this, the factory workers that make our product will be the more affected since their lines are going to shut down at some point
There are cities in other countries like Mexico that depend on our company, those factories are the main income for small towns.
The impact for now will be huge but if the UAW accomplish something good out of this, the net benefit will be a stronger middle class at some point
If they start shutting factories where they produce the F150 or Chevy Tahoes, the Big 3 will react fast
YES. The middle class can then pay more taxes, and car prices have nowhere to go but up.
I am pro union and think they should get paid more but the bigger issue is the pension. It’s a massive liability on the companies. They have had lump sum payments instead and other issues over the years with pension obligations. They have encountered issues over the last 2 decades. Pensions are around $20k a year. They raided the pension in the last recession to pay severance, a legal tactic, and after the last recession did not have to contribute to the pension for 4 years as part of the bankruptcy. It’s a growing problem and I have no idea how we balance it.
One part is healthcare, if we had universal healthcare then one major issue would be resolved.
I recall reading back after the 2008 crash and the bailout that the UAW benefits added something like $1200 to the price of every car sold by GM. I’m afraid its just going to be that way again. It will just mostly be a pass through to the consumer, with minimal cost added to the manufacturer. It might take them a couple of years to finagle that, but thats still where I see that going. And $1200 in benefits 15 years ago is now what, $2500? $3500? So even at current car prices, flat adding that amount across the vehicles will be noticeable. In great battles between unions and employers, I think its mostly the consumer who loses in the end.
“… UAW benefits added something like $1200 to the price of every car sold by GM.”
How much do you think the costs of employee pay and benefits contribute to the prices of cars built by, say, Toyota in Japan or Audi in Germany?
Hint: It’s as much if not more.
I mean pensions are nice and all, but if you have a decent understanding of finances and discipline, you can do better. Having a pension system gives you some insulation from cyclical financial patterns and bad decision making, but you are still paying a percentage to someone else and run the risk that the pension plan will be raided or poorly managed to the point you have no retirement income.
Good healthcare is something that seems to be a no-brainer for a company. Healthy employees are generally more happy and productive.
Pension funds are generally invested to help fund them. They are guaranteed whereas a private investment is not. The 401k was created to augment pension plans and not replace them. With stocks you pay to trade, nothing is free. You mentioned discipline and understanding of finance. Most do not have those traits. Someone with a high school education does not understand finance. A pension is an investment account. We need stronger laws protecting them where they are in place.
Maybe I’m misunderstanding what you are saying, but 401K are investment vehicles, so if you treating them like savings accounts, you are doing it all wrong. You are correct that pension accounts are managed investment entities.
Most of my investments in retirement accounts don’t have transaction fees. Just keep an eye on the net of other fees and you should do just fine. Don’t be like my aunt that pays a broker (real live living guy) $50 per transaction.
And while pensions do have some ‘guarantees’, there are many pensions that go belly up, leaving people with pennies on the dollar, if anything. There are government backed pensions, but those are still not guaranteed at 100% and becoming less available.
I have a 401k, and I have very little confidence there will be anything left in it when I actually need it. I know a lot of people who took a huge haircut in 2008 on their 401Ks.
I had coworkers delay retirements after that haircut. Some left just at the onset of the pandemic. We had furloughs, 3 days a month, that made it difficult as well.
It’s fine to be conservative in your retirement outlook (I certainly am not planning for Social Security to be a meaningful part of my retirement in ~2050), but a broadly market-based 401k going to literal zero implies societal collapse on a scale we’ve never seen.
Someone who took a haircut in 2008 and rode it out through 2009 was rewarded with the longest bull market in history. The S&P was some 700% higher than its 2009 trough by the time of the peak.
Yeah, I really don’t have confidence some sort of societal collapse isn’t going to happen. I’m hoping that Dave Ramsey is correct when he says a 401k will generally double every 7 years, but I also wouldn’t put it past our political leaders to completely drive the economy off the cliff.
Dave Ramsey is rarely correct, but he is right that a broad stock portfolio has been a reliable source of long-term wealth building for more than a century.
The #1 thing giving me confidence that our leaders won’t crash the stock market is that they are all more exposed to it than I am.
Excellent point about our leaders being invested in the stock market! If it weren’t for the insider trading, why even run for office??
Honestly I’m delighted that pensions still exist somewhere in this country, and I’m happy for those who have them. But in terms of 401k, one does not need to be a financial expert. Just use a basic S&P 500 index fund, because even with severe market dips like 2008, it’ll give consistently solid returns over time (provided you are not looking to retire directly in the middle of said dip).
A broad stock portfolio has been a reliable source of long-term wealth, so long as you are in a position to ride out the sags no matter how long they last. The fact that it’s been that way “for over a century” isn’t much of a guarantee when you’re shooting to live for a century yourself.
Thing is, with personal investments, you start to spend them down when you retire. So the older you are (which is when your expenses start to skyrocket), the less cushion you have to ride out that sag.
If you believe in societal collapse you should be investing in guns, MREs, fuel, and a bunker to put them in. Money, especially digital money, is worthless post apocalypse. But really, we’ll all be fine.
I also took a sizable haircut in 2008, but I kept the course and reaped the gains in the years following. The money that I kept investing during the low times gained insane growth and the money that was there before came back up over time with the market in general.
Those that I’ve talked to that say they didn’t have a 401K recovery in the years following were those that pulled back from ‘value’ and ‘growth’ funds and either put it all in ‘bonds’ or converted into cash. They screwed up and forgot the markets historically recover. A few just had questionable investments and/or were not at all diversified.
I don’t really understand why US companies aren’t screaming from the rooftops for universal healthcare so that they don’t have to deal with it anymore. I guess they prefer the level of control being in charge of their employee’s healthcare gives them.
It’s another way to ensure employees don’t quit. When your healthcare is attached to your job it’s another reason to no leave.
Because Corporations write off the costs of employee benefits – such as healthcare – on their taxes.
Universal healthcare would eliminate cost, but also that write-off – resulting in a net increase in Corporate taxes to help pay for it.
Oh, and F*ck Universal Healthcare. It’s not the panacea you think it would be…
Listen up, you dimwitted fuckwit, I lived in New Zealand and Australia for 18 months, and got to witness first hand how far more effective their universal healthcare system is.They also have a private insurance sector component unlike Canada; their system ergo works far better, their private insurance sector has far lower costs than the American sector because they have smaller risk pools, and also don’t allow Big Healthcare and Big Pharma to price gouge the everliving shit out of consumers like they do in the US. We can upscale their system, tailor it to the population size we have, and end up paying far less in the long run with better health outcomes. They also have high taxes on their alcohol and on religious organizations in the 20% range which are directed towards healthcare costs, that also offset the cost to taxpayers to reasonable levels; far below what we Americans pay into our broken, ineffective and greed driven system.
Actually, it would work much better for the US to adopt a hybrid universal+private system, you just are parroting all the anti-universal healthcare propaganda you’ve been drip fed from right wing news sources for decades, so please, STFU, Bryan Davis.
Based on your perpetual inane commentary, you read as a privileged Boomer who went to college and paid for it in full working 20 hours a week slinging pizzas in the late 70’s/early 80’s when higher education was AFFORDABLE and then rode the wave of Reagan’s union busting and middle class wealth destroying bullshit to the top and have no desire to let any generations below yours have any chance of the success and prosperity you enjoyed.
Here is the problem with the strike. It’s now not just about the workers, it’s about the suppliers and all the ancillary services around these plants like the gas stations/party stores/restaurants, etc. that are going to get hurt really badly IF this lasts for a while. I saw it firsthand in 2007 before I moved out of Detroit (pre-bankruptcy and when the lending crisis was just ramping up, looking at you, GMAC). It was really bad for many, many people.
I hope the workers do get a nice deal, end the two-tier employment, lower the timeframe for full pay, restore the bennies that they had before 2007, and all of that. The 32-hour workweek will probably not make it to the finish line. It just needs to get resolved quickly before it truly affects the rest of the people in the communities around wherever the striking plants are.
I read the strike targets as a “I’m not unreasonable, let’s make a deal” message to the automakers. And yes, it had a “Don’t make me hurt you” aspect implied.
I think it’s a good strategy. More along the lines of a “good faith” negotiation than a 100% walkout.
Also, I don’t think it was mentioned in the article, but the UAW says they’re open to negotiating with each manufacturer individually. It will be interesting to see who blinks first.
Yeah, I heard the news on the radio this morning about the plants involved I knew the Wentzville and Toledo plant’s products, had to look up ford, but when I did I had to smile, very clear message
A 4 day work week should be the norm, change my mind.
I’ve worked 4×10’s for 5 years and wholeheartedly agree!
I’m pretty sure that the UAW wants 4 eights, not 4 tens!
I don’t see that happening, but you gotta start the negotiation somewhere.
That’s what I’m saying as well
I agree with Serial Thriller below in not seeing it happening. A move to 4×8’s would require a 20% pay increase to not lose pay. Given they’re asking for a 40% increase that will likely end-up somewhere around halved, it just doesn’t seem likely.
More power to them if they get it, they deserve their share of the billions of profits the manufacturers have made over the past few years.
*In my original comment I assumed they were fighting with management to just have the 4×10’s as an option. Most management is too thick-headed to understand it’s a cost-free way to increase productivity and generally improve worker morale.
It’s not cost-free, though. When you hire more people you also have to train them (not a huge deal in the factories) but also have to pay for their healthcare and other bennies.
You don’t need to hire more people, just use the ones you have more efficiently. You still have the same number of people at work for 40 hrs/week, with 4×10’s you just have fewer breaks and less startup/wind-down time.
Four tens don’t work if you’re running three shifts.
I can hear the automakers thought process. Ok, let’s go with 3×8 work weeks, 6 day plant operation, and everyone is a temp.
Are you expecting all companies to hire more people? Or are you willing to have all those businesses shut down for an extra day a week? Are employers expected to pay what is now 40 hour pay, for your 32 hours of work? And then also pay that increased amount to the new laborers? The US unemployment rate has been hovering at like 3%. Are there even enough people in the US labor pool to get anywhere near “norm” of a 4 day work week?
As worker productivity has risen, both the workweek and the pay have lagged behind it. Considering the automakers have been saying they’ll need fewer employees as they transition to EVs, this is a solid way to help keep people employed as that happens.
Who said you have to shut down businesses an extra day each week?
If your employees only work 4 days instead of 5, you have to choose to hire more people to fill in the extra time, or you have to be closed. Is there an option in that mix that I’m missing?
Yes, and it’s probably the one they’re secretly hoping for:
If 32 hours is the normal work week, then OT rates kick in at the 33rd hour. Why not just work the old 40 hour schedule and make 1.5X for 8 hours a week?
I could see the UAW trying to mandate that. That makes sense. But for it to apply as the “norm” it would require an substantial update to the existing labor protection laws across the country. My statements are all directed more at the “norm” aspect of the original comment, as opposed to just how it might impact the UAW.
That would be an interesting tack for a manufacturer to take: “We’ll give you the 32-hour workweek for regular hours, but we’ll ask for 40 hour weeks, 8 hours at OT rate. We’ll get everyone up to the pay you request if they work 40/week.”
Then you end up with people taking vacations at 32 or 40 hours of regular pay per week, rather than a regular week of pay, plus anyone taking one day off in a week saves the company money, since they lose the OT pay.
It’d look good at a glance, still be an improvement for workers, but not be anywhere near all of what the UAW is asking for.
I think it would end up frustrating workers later and might not be accepted by the union (probably rightly so), but it would certainly be hard to claim it wasn’t serious negotiation.
Few people could afford a 20% pay cut.
HELL YEAH!!!! Life is too short to waste 70% of it at work. These last few years have really shown me that.
It really is time for a change, the 40Hr workweek came about almost 100 years ago, at the time it was thought it would go down to 32 within a few more years. Instead, it’s going back up.
In the late 40’s it was predicted that we’d be working twenty-something hour weeks as technology moved forward, and productivity increased.
Studies have shown the 4/32 week to be beneficial to both employees AND employers, it’s time to make the switch. The UAW even talking about it is a good step in getting people talking about it, and them actually getting it would be a huge step towards normalizing it.
I like my 11 hours of overtime.. Nice addition to paycheck
Overtime is great, if working it is your choice. Last winter I was working about ten a week, agree it’s nice to see in the paycheck. Once the weather got nicer and I had better things to do than work, I dropped back down to 40.
I accept that car prices are going to be absurd regardless; at least in the context of the UAW strike, it’s for the betterment of the working class, not just the greed of dealerships.
GM made $22 billion last year. If they doubled the pay of all of their UAW represented employees they would have profited $18 billion.
Seems like a pretty reasonable tradeoff to me. I’m pulling for Mr. Fain et al.
net profit was ~$10B. still insane but not sure where you’re getting $22B from.
https://www.detroitnews.com/story/business/autos/general-motors/2023/01/31/gm-reports-nearly-10-billion-in-profit-in-2022/69856635007/
You’re right, I had gross and not net figures.
Nothing wrong with $6B in profit in my book.
The UAW (specifically the retiree medical plan for example) is a significant owner of GM stock and rely on earnings/dividends. They also have a vested interest in stock price as they sell some off from time to time to raise funds. So it’s a little bit more complicated than that.
But won’t somebody think of the shareholders????
Fuck ’em, they can afford it. I’m with Fain.
It’ll be interesting to see how this plays out.
I’m thinking the 4 day work week will get nixed, the compensation increase halved, and the CEO’s somehow getting larger bonuses for their hard work.
We have to make sure the suits get their fair share, their contributions can’t be
overunder-estimated……can’t be
overunder-estimated…Next, without a contract the Big3 close all the existing plants, move & build new plants in Mexico or non-union plants. UAW fails to exist anymore, we gift the city of Detroit to Canada along with the 150,000 former UAW workers, BONUS they now have free Canadian healthcare.
I think you just called Canada stupid.
COTD
The big three are going to have to blink first, Campaign Bears don’t back down.