Autoworkers are readying themselves for a potential strike as contract negotiations with the so-called “Big Three” drag on. The United Auto Workers (UAW) is negotiating on behalf of nearly 150,000 workers at Detroit-based auto manufacturing plants run by Ford, GM, and Stellantis NV (formed from a merger between Fiat Chrysler and PSA Group). On the face of it, UAW’s demands sound audacious: a 46 percent pay raise and a four-day workweek, among other things. But in the broader context of a decades-long decline in labor rights and wages, it is immanently reasonable.
What is unreasonable is massively profitable corporations’ insistence on squeezing every last drop of productivity from their workers with paltry wages, long hours, and little-to-no job security, and then feigning outrage at union demands.
The Big Three made more than $20 billion in profits in the first half of 2023 alone. Their CEOs are financially compensated to the tune of tens of millions of dollars a year. Meanwhile, even the top-paid autoworkers earn less than six figures a year. Temporary workers start at only $17 an hour.
UAW president Shawn Fain has directly linked worker salaries to CEO compensation—a politically savvy move—saying, “record profits mean record contracts.” As unions remain popular, the idea of sharing the wealth appeals to a basic sense of fairness among the public.
Pro-business forces trot out their usual tired responses to contract negotiations: higher salaries could mean job cuts—as if they are simply looking out for workers. Stellantis NV executive Mark Stewart claimed that meeting union demands, “could endanger our ability to make decisions in the future that provide job security to our employees.”
I occasionally respond to my children’s unreasonable demands of ice cream for dinner with the retort, “I’m your mom, so I know better than you what’s good for you.” But workers are not children, and employers are not their parents. Moreover, workers are demanding fair pay and benefits, not ice cream. No wonder Fain threw Stellantis’s meager offering in the trash—literally!—and dismissed Ford’s less-than-generous counter-agreement as “insulting.”
A related threat that pro-business institutions make in response to potential strikes is that it could trigger a recession. Anderson Economic Group estimated that a 10-day strike could cost the economy more than $5 billion. Workers would lose $859 million collectively in salaries, while their bosses would lose $989 million.
These could be underestimates. When GM workers went on strike in 2019 for 40 days, the cost to the company was far greater than anticipated—nearly $4 billion. Meanwhile, NBC estimated that meeting the union’s salary demands would cost the companies comparable amounts spread out over much longer periods; specifically, “agreeing to a 40 percent wage bump for UAW members would cost GM $4 billion to $5 billion and Ford $5 billion to $6 billion over four years.”
In other words, the companies could lose billions over a few months by refusing to meet worker demands. Or they could spend those billions over several years by meeting worker demands. This would have the added benefits of ensuring no disruptions to their inventories and to the local economy.
What more incentives do the big companies need?
Rather than offer salary raises—a steady salary enables people to budget their lives, buy homes, project expenses, etc.—the Big Three automakers want to pay workers individual bonuses during years when profits are high. Their ostensible reason is to remain flexible at a time of massive upheaval as the industry is being pressured into evolving away from fossil-fuel based vehicles to all-electric vehicles in the face of a warming climate.
But President Joe Biden’s administration just announced a massive funding plan to boost EV production and tied it to labor rights. Biden said, “building a clean energy economy can and should provide a win‑win opportunity for auto companies and unionized workers who have anchored the American economy for decades.” Fain issued a statement saying, “We are glad to see the Biden Administration doing its part to reject the false choice between a good job and a green job.”
Biden and Fain are right. Automakers can unlock federal funding, avoid disruptions to their inventories, and ensure that their financial losses are spread out over several years rather than just a few months—all by simply meeting UAW’s salary demands.
There’s another beautiful win-win opportunity for workers and automakers embedded into transitioning the auto industry toward EV production. It takes significantly less labor to make an EV compared to a gas-run car. According to Ford, it’s 40 percent more labor efficient to make EVs.
Given that autoworkers, according to UAW, “are working 60, 70, even 80 hours a week just to make ends meet,” the labor savings can, and should, be passed on to workers. Moreover, studies show that the companies are likely to remain profitable while better retaining employees when they switch to a four-day workweek with no loss of pay. Within this context, UAW’s demand for shorter hours is hardly unreasonable.
Vermont Senator Bernie Sanders echoed this idea in a Labor Day op-ed saying, “It’s time that working families were able to take advantage of the increased productivity that new technologies provide so that they can enjoy more leisure time, family time, educational and cultural opportunities—and less stress.”
Cutting worker hours and raising wages ensures a content workforce—the most critical standard by which any people-centered economy should be measured.
But we are ordered to accept the constraints of a profit-centered economy instead. Employers can, and will, squeeze profits whenever, wherever, and however they can. Merely pointing out the mutually beneficial rewards of meeting union demands is not enough to sway corporate shareholders and their allies.
To that end, Sanders underscored the importance of union militancy in winning worker concessions: “changes that benefit the working class of our country are not going to be easily handed over by the corporate elite. They have to be fought for—and won.”
UAW appears to be embodying that message. Its militancy is on display as it withholds its endorsement for Biden’s presidential candidacy in spite of the president’s pro-union position. “Our endorsements are going to be earned not freely given and the actions are going to dictate who we endorse,” said Fain, urging Biden to “pick a side” rather than merely urging automakers to negotiate.
Paraphrasing Malcolm X, Fain told workers in a recent address, “If you truly value freedom, you must fight for freedom by any means necessary… How far are you willing to go to win the contract you deserve?” It remains to be seen how much autoworkers can flex their power. The Big Three can certainly test their patience and find out.
This article was produced by Economy for All, a project of the Independent Media Institute.