United Auto Workers President Shawn Fain is prepared to bring auto factories to a halt as contract negotiations with Detroit automakers hit a breaking point. Fain, known for his aggressive approach, has made it clear that the union will not extend the deadline for negotiations and is willing to strike if necessary. The UAW has filed unfair labor practice charges against General Motors and Stellantis, further intensifying the likelihood of a strike. Fain is taking a unique approach by negotiating with all three automakers simultaneously, rather than selecting a single target company. He has also been more confrontational with executives, leading to speculation that strikes may be necessary to prove the union’s dedication to its demands.
Experts and analysts in the industry believe that a strike, or possibly multiple strikes, may be necessary to convince UAW members that their leaders fought hard for their demands. Art Wheaton, a labor professor at Cornell University, expects a strike to occur, possibly starting with Stellantis and then pressuring GM and Ford to improve their offers. Strikes could take different forms, such as a nationwide strike or targeted work stoppages at specific plants. The impact of prolonged strikes against all three automakers would be unprecedented and would quickly disrupt the automotive supply chain and the US economy.
The Biden administration has shown interest in the negotiations, appointing longtime Democratic adviser Gene Sperling to monitor the situation. Wall Street has been warning of a potential work stoppage for months, and a survey conducted by Morgan Stanley revealed that the majority of investors believe a strike is extremely likely. The demands made by the UAW, including significant pay increases, retention of healthcare benefits, and a shorter workweek, have escalated tensions in the negotiations.
While Fain has the authority to call for strikes, the decision ultimately rests with the Union’s International Executive Board (IEB). Their approval, by a two-thirds majority vote, is necessary for a work stoppage to occur. The duration of a strike is uncertain, but the survey conducted by Morgan Stanley indicates that most respondents expect it to last longer than a week, with some predicting it could stretch beyond a month.
The UAW has a strike fund of over $825 million, which is used to pay eligible members during strikes. Assuming approximately 150,000 UAW members are covered by the contracts, the strike pay would cost the union approximately $75 million per week. However, this does not include additional healthcare costs that the union would have to cover. Historically, UAW members have mostly approved the agreements negotiated by their leaders, but recent negotiations have required returns to the bargaining table after tentative agreements were voted down.
Spokespeople for General Motors, Stellantis, and Ford declined to comment on the ongoing negotiations but reiterated their commitment to bargaining in good faith. The automakers are hopeful of reaching agreements that will benefit both sides.
