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    U.A.W. Holds Strike at GM, Ford and Stellantis. Here’s What to Know

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    Negotiators for the United Auto Workers union and the three large U.S. automakers — General Motors, Ford Motor and Stellantis, the parent of Chrysler, Jeep and Ram — remained far apart as a limited strike began on Friday.The strike is not a full-scale walkout by the union’s roughly 150,000 members but a “limited and targeted” work stoppage by about 12,700 workers that could expand if talks remain bogged down. It began after workers’ four-year contracts expired.The union must negotiate separate deals with each of the companies on issues including pay and retirement benefits.What is the union seeking?The U.A.W. has demanded a 40 percent wage increase over four years — an amount that union officials said matches the raises the top executives at the three companies have received over the last four years. Those raises are also meant to compensate for more modest increases the autoworkers received in recent years and the concessions the union made to the companies after the 2008 financial crisis.The union is also seeking cost-of-living adjustments that would nudge wages higher to compensate for inflation. And it wants a reinstatement of pensions for all workers, improved retiree benefits and shorter work hours, as well as and an end to a tiered wage system that starts new hires at much lower wages than the top U.A.W. pay of $32 an hour.What have the companies offered?As of last Friday, the companies offered to raise pay by around 14.5 percent to 20 percent over four years. Their offers include lump-sum payments to help offset the effects of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about a third less than veteran union members.It was not clear how much progress the union and the companies have made on the other issues.What have the negotiators said publicly?The companies say that they are investing billions in a transition to battery-powered vehicles, which makes it harder for them to pay substantially higher wages. They say they are at a disadvantage compared with nonunion automakers like Tesla, which dominates the sales of electric cars.On Thursday, G.M. said in a statement that it had made a new offer to the union and that the company was engaged in “continuous, direct, and good faith negotiations” in an effort to avoid a strike.Declaring that “the future of our industry is at stake,” Ford said on Wednesday that it was “ready to reach a deal,” adding, “We should be working creatively to solve hard problems rather than planning strikes and P.R. events.”Stellantis said on Wednesday that its “focus remains on bargaining in good faith to have a tentative agreement on the table before tomorrow’s deadline.”In a 40-minute address on Wednesday, the union’s president, Shawn Fain, called the automakers’ offers “insulting.”“For the last 40 years, the billionaire class has been taking everything and leaving everybody else to fight for the scraps,” he said. “We are not the problem. Corporate greed is the problem.”What will striking workers get paid?The union plans to pay striking workers $500 per week and cover the cost of their health insurance premiums. The union’s $825 million strike fund is big enough to cover payments to workers in a full strike against all three companies for about three months — although the U.A.W. has said it would expand the limited stoppage only if talks bogged down.What does the strike mean for consumers?Only certain models of cars are affected right now, but if the strike lasts long enough to start impacting inventories, car dealers will have fewer vehicles on their lots and may start pushing up prices on the ones they do have.This comes at a time when car prices had already been rising, and the average interest rates on auto loans had been climbing — making it harder for buyers to afford cars. More

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    A Spirited Start to the U.A.W. Strike at a Ford Plant Near Detroit

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    Rodney Cornett got up at 4:30 a.m. on Friday, hopped in his F-150 pickup and reported as usual for a morning shift at the Ford Motor plant in Wayne, a gritty city just west of Detroit.But this morning Mr. Cornett, 56, a veteran union member who has worked at Ford for 28 years, wasn’t heading to the axle assembly area where he’s a team leader. Instead, his work was putting in six hours on the picket line with a dozen co-workers at the plant’s Gate 1 as part of the strike called by the United Auto Workers late Thursday.“We really haven’t had much of a raise in 15 years,” Mr. Cornett said, holding a sign that read, “Fair Pay Now!” while cars and trucks constantly whizzed by, honking in support of the strikers. “We’ve gone through several contracts, and the company keeps saying how they’re hurting, but they’re making record profits. It can’t be the status quo.”The U.A.W. has been negotiating a new labor contract with the three Detroit automakers, but since the sides remain far apart on wages and most other issues, the union called a strike that began when the current bargaining agreement expired at midnight.In a first, the U.A.W. is striking against all three manufacturers — General Motors, Ford and Stellantis — but has limited the stoppages to one plant at each of the companies. At Ford’s Michigan Assembly Plant in Wayne, only the 3,300 workers in the assembly area and paint shop have walked off the line, but that is enough to idle the factory.Dottie Lenard, center, with her sister Gail Spring, left, and daughter Rebeccah Lenard. They were on strike on Friday in Wayne.Shantell Johnson works at the Ford plant.All 5,800 U.A.W. workers at Stellantis’s Jeep complex in Toledo, Ohio, and 3,600 union members at G.M.’s pickup truck factory in Wentzville, Mo., also went on strike.While limited, the strike will have an impact on the automakers. The affected vehicles are among their most popular and profitable. The Ford plant makes the Bronco, a rugged sport utility vehicle, and is preparing to make a new version of the Ranger pickup. Jeep makes its Gladiator and Wrangler models in Toledo. The G.M. plant produces the Chevrolet Colorado and GMC Canyon pickups.The U.A.W.’s president, Shawn Fain, said the union could extend the strike to additional plants if the talks failed to produce an agreement. “That will supercharge the leverage we have in negotiations, and will create confusion for the companies,” he said in a video streamed on Facebook on Thursday night.Mr. Fain joined workers outside the Ford plant in Wayne after the strike began at midnight. The union broke off discussions with the companies for a day but said it expected the talks to resume on Saturday.The union has demanded wage increases of 40 percent over the next four years, roughly the same pay gains the chief executives of the three companies have seen over the last four years.A U.A.W. member who isn’t on strike showed support for the walkout at the Wayne plant, which produces the Bronco sport utility vehicle and is preparing to make a new version of the Ranger pickup. Among its other demands, the union wants to end a pay scale where new hires make about a third less than the veteran wage of $32 an hour and have to work eight years before reaching the top of the pay scale. It also wants the companies to pay for health insurance for retirees, offer more paid time off and provide pensions for workers who now have only 401(k) savings accounts for retirement.The companies have offered wage increases of roughly 20 percent but have denied most of the union’s other wishes.At the Ford plant, several strikers said a raise of 30 percent or more was needed to make up for concessions that the union had to make in previous years to help the automakers survive the 2007-8 financial crisis.Jason Vinson, 42, a forklift driver, started as a temporary worker in 2007 making about $17 an hour, then worked his way up to $25 until he was laid off. When he was rehired in 2012, he had to start over at $17 an hour, he said.“I had to get used to it, just pay the necessities,” he said with a shrug. Now he earns $32 an hour, he said, but thinks a substantial raise is warranted because of the profits his plant generates and the sacrifices he made in the past.The strikers, many wearing red T-shirts, waved placards and acknowledged honks of support from passing motorists. The picketing is being conducted in six-hour shifts; the plan is for union members to take on one shift per week.Drawing on a strike fund of $825 million, the union will pay the striking workers $500 a week and cover their health insurance premium. That helps, but still puts some workers in a pinch.The union is demanding 40 percent raises over the next four years.Lisa Bell at the Ford plant in Wayne.“I’m getting rid of my cable TV,” said Diana Osborne, 42, an assembly worker who has worked for Ford for 16 years. And her 18-year old daughter, who just enlisted in the National Guard, has offered to lend her money if things get really tight.Mr. Cornett, the team leader in axle assembly, makes $32 an hour but said he fretted about sending his son to college. If he works 40 hour a week, he will earn about $67,000 a year. “There’s college, plus property taxes are going up, the price of gas is through the roof,” he lamented.Aside from a raise, the thing he wants is an end to the tiered wage system, under which newer workers and veterans are paid on different scales, saying it’s “disheartening” seeing colleagues doing the same work while making $22 or $24 an hour.“We all labor hard,” he said. “You have a precise amount of time to do your job on the line, and our jobs are timed to the second. When the line starts, it doesn’t stop until we go on break. A lot of new hires come in and they have aches and pains, the same aches and pains that I have, so they should get paid the same as me.” More

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    U.A.W. Goes on Strike at 3 Plants in Midwest

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    Workers walked off the job at 3 initial sites in a targeted labor action against Ford, General Motors and Stellantis — the first ever of all three at once.In Detroit, Shawn Fain, president of the United Auto Workers union, announced a strategy on Thursday calling on select facilities to strike in order to “keep the companies guessing.”U.A.W. via ReutersThousands of members of the United Automobile Workers union went on strike Friday at three plants in three Midwestern states in what was the first strike simultaneously affecting all three Detroit automakers.The union and the companies — General Motors, Ford Motor and Stellantis, the parent of Chrysler — remained deadlocked in negotiations over a new collective bargaining agreement when the current contract expired at 11:59 p.m. on Thursday.As the deadline neared, workers started to fan out at the targeted plants — in Michigan, Missouri and Ohio — to protest.At the outset, the strike will idle one plant owned by each automaker, and could force the automakers to halt production at other locations, shaking local economies in factory towns across the Midwest.“We are using a new strategy,” the union’s president, Shawn Fain, said in a video streamed via Facebook on Thursday night. “We are calling on select locals to stand up and go out on strike.”In the 88 years since it was founded, the union has called strikes aimed at a single automaker, and a handful have halted production for several weeks. G.M. plants were idle for 40 days in 2019 before the company and the union agreed on a new contract.The plants designated for walkouts on Friday represent only a small portion of all the unionized factories of G.M., Ford and Stellantis and of those companies’ 150,000 U.A.W. members.Where Auto Workers Are Walking Out More

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    U.A.W. Prepares for Partial Strike Against Detroit Automakers on Friday

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    The union’s president, Shawn Fain, said negotiators were nowhere near an agreement and ruled out a contract extension while talks continued.Barely 24 hours before the contract deadline, the United Auto Workers leader said Wednesday that his members were prepared for a strike against the three Detroit automakers — first at a limited number of factories, with the walkout expanding if talks remain bogged down.The U.A.W. president, Shawn Fain, also ruled out any extension of the existing four-year contracts with General Motors, Ford Motor and Stellantis after they expire on Thursday night. “September 14 is a deadline, not a reference point,” he declared in an address to union members on Facebook Live.He said the initial strike locations would be “limited and targeted,” and would be communicated to members on Thursday night ahead of a Friday walkout.This tactic — a departure from the union’s usual strategy of staging an all-out strike against a single automaker chosen as a target — is intended to give the U.A.W. negotiators increased leverage in the talks, and to keep the manufacturers off balance.“It will keep them guessing on what’s going to happen next,” Mr. Fain said.Striking at even a handful of plants would disrupt the automakers’ production while ensuring that a large portion of the 150,000 U.A.W. members at the three companies continued to work and receive paychecks.The union plans to pay striking workers $500 per week and cover the cost of their health insurance premiums. The union has a strike fund of $825 million, which would cover payments to workers in a full strike against all three companies for about three months.In its initial proposal to the companies, the union demanded a 40 percent increase in wages over four years, on the premise that pay packages of the companies’ chief executives have on average risen that much over the last four years. The union has also sought regular cost-of-living adjustments that would nudge wages higher in response to inflation.The union is also seeking pensions for all workers, improved retiree benefits, shorter work hours and an end to a tiered wage system that starts new hires at about half the top U.A.W. wage of $32 an hour.The companies — each negotiating separately with the union — have made counterproposals raising wages by roughly half what the union is asking, according to Mr. Fain, and have done even less to satisfy the other demands.After Mr. Fain’s announcement, General Motors issued a statement saying in part: “We continue to bargain directly and in good faith with the U.A.W. and have presented additional strong offers. We are making progress in key areas.”Declaring that “the future of our industry is at stake,” Ford said it was “ready to reach a deal,” adding, “We should be working creatively to solve hard problems rather than planning strikes and P.R. events.”Stellantis said it had presented its latest offer to the union on Tuesday. “Our focus remains on bargaining in good faith to have a tentative agreement on the table before tomorrow’s deadline,” the company said.A week ago, the U.A.W. filed a complaint with the National Labor Relations Board saying G.M. and Stellantis had failed to respond to the union’s proposals and were bargaining unfairly.Erik Gordon, a business professor at the University of Michigan who follows the auto industry, said a strike was very likely. “I think they can reach an agreement on wages,” he said, “but these other issues are complicated and can’t be resolved in the last 36 hours by splitting the difference.”Mr. Fain’s 40-minute address was highlighted by citations from the Bible; memories of his grandfather, who was also a union autoworker; and plenty of fiery language.“For the last 40 years, the billionaire class has been taking everything and leaving everybody else to fight for the scraps,” he exclaimed at one point. “We are not the problem. Corporate greed is the problem.”He also showed a series of slides listing the union’s demands for wages, benefits, job security and other issues alongside what he said were the companies’ responses. And he contrasted his leadership team’s approach to the negotiations with that of the predecessors they ousted last year.In the past, the U.A.W. leadership typically gave union members little information on the state of the negotiations until a tentative agreement was reached. Mr. Fain said that members were “fed up with the company-union philosophy” and that dealings with the companies would be transparent to union members, “not behind closed doors as in the past.”The prospect of a large-scale strike comes as the automakers are reaping near-record profits but also contending with the transition to electric vehicles. G.M., Ford and Stellantis — the parent of Chrysler — are investing tens of billions of dollars to develop new technologies and electric models, build new battery plants, and retool older factories.The union is concerned about the potential loss of jobs as a result of the transition. Electric vehicles — which don’t have components like transmissions or fuel systems — require fewer workers to produce.All three companies are also building battery plants with partners that are not automatically covered by the U.A.W. contract. Workers at one G.M. battery plant in Ohio that started production late last year voted to join the U.A.W. and are negotiating a contract of their own with the company.Kurtis Lee More

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    What to Know About the Potential Autoworkers Strike

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    The union and the carmakers remain far apart on wages.The United Auto Workers union, which represents about 150,000 workers at U.S. car plants, could strike against three of the country’s largest automakers on Friday if the union and the companies are unable to reach new contracts.The three automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — could be forced to stop or slow production if an agreement isn’t reached by midnight on Thursday. The president of the U.A.W., Shawn Fain, said that Thursday was the “deadline, not a reference point.”The union is negotiating a separate four-year contract with each automaker. The U.A.W. has never struck against all three companies at once, preferring to target one at a time. But Mr. Fain has said he and his members are willing to strike against all three this time.What’s at issue in the labor dispute?Compensation is at the forefront of negotiations.The U.A.W. is demanding 40 percent wage increases over four years, which Mr. Fain says is in line with how much the salaries of the companies’ chief executives have increased in the past four years.As of last Friday, the two parties remained far apart, with the companies offering to raise pay by 14 to 16 percent over four years. Mr. Fain called that offer “insulting” and has said that the union is still seeking a 40 percent pay increase.What role is the switch to electric cars playing in the negotiations?The auto industry is in the middle of a sweeping transition to battery-powered vehicles, and G.M., Ford and Stellantis are spending billions of dollars to develop new models and build factories. The companies have said those investments make it harder for them to pay workers substantially higher wages. Automakers say they are already at a big competitive disadvantage compared with nonunion automakers like Tesla, which dominates the sale of electric vehicles.The U.A.W. is worried that the companies will use the switch to electric cars to cut jobs or hire more nonunion workers. The union wants the automakers to cover workers at the battery factories in their national contracts with the U.A.W. Right now those workers are either not represented by unions or are negotiating separate contracts. But the automakers say they cannot legally agree to that request because those plants are set up as joint ventures.What happened in the last U.A.W. strike?The U.A.W. most recently went on strike in 2019 against General Motors. Nearly 50,000 General Motors workers walked out for 40 days. The carmaker said that strike cost it $3.6 billion.The strike ended after the two sides reached a contract that ended a two-tier wage structure under which newer employees were paid a lot less than veteran workers. G.M. also agreed to pay workers more.How would a strike against the three automakers affect the economy?A long pause in car production could have ripple effects across many parts of the U.S. economy.A 10-day strike could cost the economy $5 billion, according to an estimate from Anderson Economic Group. A longer strike could start affecting inventories of cars at dealerships, pushing up the price of vehicles.The auto industry is in a more vulnerable place than it was in 2019, the last time the U.A.W. staged a strike. In the earlier part of the pandemic, car production came to a halt, sharply reducing the supply of vehicles. Domestic car inventories remain at about a quarter of where they were at the end of 2019.Will a strike have political ramifications?It definitely could.President Biden has called himself “the most pro-labor union president” and sought to solidify his ties with labor unions ahead of his re-election campaign. But the U.A.W., which usually endorses Democratic candidates including Mr. Biden in his 2020 run, has held off endorsing him for the 2024 race.The union fears that Mr. Biden’s decision to promote electric vehicles could further erode union membership in the auto industry. Mr. Fain has criticized the administration for awarding large federal incentives and loans for new factories without requiring those plants to employ union workers.Former President Donald J. Trump, who is most likely to secure the Republican nomination, has been seeking to win over U.A.W. members. He has criticized Mr. Biden’s auto and climate policies as bad for workers and consumers. More

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    UAW Standoff Poses Risk for Biden’s Electric Vehicle Commitment

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    A looming auto industry strike could test the president’s commitment to making electric vehicles a source of well-paying union jobs.President Biden has been highly attuned to the politics of electric vehicles, helping to enact billions in subsidies to create new manufacturing jobs and going out of his way to court the United Automobile Workers union.But as the union and the big U.S. automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — hurtle toward a strike deadline set for Thursday night, the political challenge posed by the industry’s transition to electric cars may be only beginning.The union, under its new president, Shawn Fain, wants workers who make electric vehicle components like batteries to benefit from the better pay and labor standards that the roughly 150,000 U.A.W. members enjoy at the three automakers. Most battery plants are not unionized.The Detroit automakers counter that these workers are typically employed in joint ventures with foreign manufacturers that the U.S. automakers don’t wholly control. The companies say that even if they could raise wages for battery workers to the rate set under their national U.A.W. contract, doing so could make them uncompetitive with nonunion rivals, like Tesla.And then there is former President Donald J. Trump, who is running to unseat Mr. Biden and has said the president’s clean energy policies are costing American jobs and raising prices for consumers.White House officials say Mr. Biden will still be able to deliver on his promise of high-quality jobs and a strong domestic electric vehicle industry.The head of the United Automobile Workers, Shawn Fain, center, wants his union’s wages and labor standards to apply to nonunion workers who make electric vehicle components.Brittany Greeson for The New York Times“The president’s policies have always been geared toward ensuring not only that our electric vehicle future was made in America with American jobs,” said Gene Sperling, Mr. Biden’s liaison to the U.A.W. and the auto industry, “but that it would promote good union jobs and a just transition” for current autoworkers whose jobs are threatened.But in public at least, the president has so far spoken only in vague terms about wages. Last month, he said that the transition to electric vehicles should enable workers to “make good wages and benefits to support their families” and that when union jobs were replaced with new jobs, they should go to union members and pay a “commensurate” wage. He is encouraging the companies and the union to keep bargaining and reach an agreement, one of Mr. Biden’s economic advisers, Jared Bernstein, told reporters on Wednesday.A strike could force Mr. Biden to be more explicit and choose between his commitment to workers and the need to broker a compromise that averts a costly long-term shutdown.“Battery workers need to be paid the same amount as U.A.W. workers at the current Big Three,” said Representative Ro Khanna, a Democrat from California who has promoted government investments in new technologies.Mr. Khanna added, “It’s how we contrast with Trump: We’re for creating good-paying manufacturing jobs across the Midwest.”At the heart of the debate is whether the shift to electric vehicles, which have fewer parts and generally require less labor to assemble than gas-powered cars, will accelerate the decline of unionized work in the industry.Foreign and domestic automakers have announced tens of thousands of new U.S.-based electric vehicle and battery jobs in response to the subsidies that Mr. Biden helped enact. But most of those jobs are not unionized, and many are in the South or West, where the U.A.W. has struggled to win over autoworkers. The union has tried and failed to organize workers at Tesla’s factory in Fremont, Calif., and Southern plants owned by Volkswagen and Nissan.A Ford Lightning plant in Dearborn, Mich. The U.A.W. worries that letting battery makers pay lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor.Brittany Greeson for The New York TimesAs a result, the union has focused its efforts on battery workers employed directly or indirectly by G.M., Ford and Stellantis. The going wage for this work tends to be far below the roughly $32 an hour that veteran U.A.W. members make under their existing contracts with three companies.Legally, employees of the three manufacturers can’t strike over the pay of battery workers employed by joint ventures. But many U.A.W. members worry that letting battery manufacturers pay far lower wages will allow G.M., Ford and Stellantis to replace much of their current U.S. work force with cheaper labor, so they are seeking a large wage increase for those workers.“What we want is for the E.V. jobs to be U.A.W. jobs under our master agreements,” said Scott Houldieson, chairperson of Unite All Workers for Democracy, a group within the union that helped propel Mr. Fain to the presidency.The union’s officials have pressed the auto companies to address their concerns about battery workers before its members vote on a new contract. They say the companies can afford to pay more because they collectively earned about $250 billion in North America over the past decade, according to union estimates.But the auto companies, while acknowledging that they have been profitable in recent years, point out that the transition to electric vehicles is very expensive. Industry executives have suggested that it is hard to know how quickly consumers will embrace electric vehicles and that companies needed flexibility to adjust.Even if labor costs were not an issue, said Corey Cantor, an electric vehicle analyst at the energy research firm BloombergNEF, it could take the Big Three several years to catch up to Tesla, which makes about 60 percent of fully electric vehicles sold in the United States.A strike could force Mr. Biden to choose between his commitment to workers and the need to avert a costly shutdown of the U.S. auto industry.Bill Pugliano/Getty ImagesData from BloombergNEF show that G.M., Ford and Stellantis together sold fewer than 100,000 battery electric vehicles in the United States last year; in 2017, Tesla alone sold 50,000. It took Tesla another five years to top half a million U.S. sales. (The Big Three also sold nearly 80,000 plug-in hybrids last year.)The three established automakers had hoped to use the transition to electric cars to bring their costs more in line with their competitors, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a research firm. If they can’t, he added, they will have to look for savings elsewhere.In a statement, Stellantis said its battery joint venture “intends to offer very competitive wages and benefits while making the health and safety of its work force a top priority.”Estimates shared by Ford put hourly labor costs, including benefits, for the three automakers in the mid-$60s, versus the mid-$50s for foreign automakers in the United States and the mid-$40s for Tesla.Ford’s chief executive, Jim Farley, said in a statement last month that the company’s offer to raise pay in the next contract was “significantly better” than what Tesla and foreign automakers paid U.S. workers. He added that Ford “will not make a deal that endangers our ability to invest, grow and share profits with our employees.”Mr. Biden and Democratic lawmakers had sought to offset this labor-cost disadvantage by providing an additional $4,500 subsidy for each electric vehicle assembled at a unionized U.S. plant, above other incentives available to electric cars. But the Senate removed that provision from the Inflation Reduction Act.Such setbacks have frustrated the U.A.W., an early backer of Mr. Biden’s clean energy plans. In May, the union, which normally supports Democratic presidential candidates, withheld its endorsement of Mr. Biden’s re-election.“The E.V. transition is at serious risk of becoming a race to the bottom,” Mr. Fain said in an internal memo. “We want to see national leadership have our back on this before we make any commitments.”The next month, Mr. Fain chided the Biden administration for awarding Ford a $9.2 billion loan to build three battery factories in Tennessee and Kentucky with no inducement for the jobs to be unionized.A BMW battery plant in South Carolina. The U.A.W. has struggled to unionize autoworkers in the South.Juan Diego Reyes for The New York TimesMr. Biden tapped Mr. Sperling, a Michigan native, to serve as the White House point person on issues related to the union and the auto industry around the same time. By late August, the Energy Department announced that it was making $12 billion in grants and loans available for investments in electric vehicles, with a priority on automakers that create or maintain good jobs in areas with a union presence.Mr. Sperling speaks regularly with both sides in the labor dispute, seeking to defuse misunderstandings before they escalate, and said the recent Energy Department funding reflected Mr. Biden’s commitment to jump-start the industry while creating good jobs.Complicating the picture for Mr. Biden is the growing chorus of Democratic politicians and liberal groups that have backed the autoworkers’ demands, even as they hail the president’s success in improving pay and labor standards in other green industries, like wind and solar.Nearly 30 Democratic senators signed a letter to auto executives this summer urging them to bring battery workers into the union’s national contract. Dozens of labor and environmental groups have signed a letter echoing the demand.The groups argue that the change would have only a modest impact on automakers’ profits because labor accounts for a relatively small portion of overall costs, a claim that some independent experts back.Yen Chen, principal economist of the Center for Automotive Research, a nonprofit group in Ann Arbor, Mich., said labor accounted for only about 5 percent of the cost of final assembly for a midsize domestic sedan based on an analysis the group ran 10 years ago. Mr. Chen said that figure was likely to be lower today, and lower still for battery assembly, which is highly automated.Beyond the economic case, however, Mr. Biden’s allies say allowing electric vehicles to drive down auto wages would be a catastrophic political mistake. Workers at the three companies are concentrated in Midwestern states that could decide the next presidential election — and, as a result, the fate of the transition to clean energy, said Jason Walsh, the executive director of the BlueGreen Alliance, a coalition of unions and environmental groups.“The economic effects of doing that are enormously harmful,” he said. “The political consequences would be disastrous.” More

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    Auto Strike by U.A.W. Could Have Wide Economic Effects

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    An extended walkout by the United Auto Workers in a contract dispute could raise car prices and affect jobs at the companies’ suppliers.Two years after the auto industry survived the supply-chain upheaval of the pandemic, another disruption — the prospective strike by the United Auto Workers — threatens to upend the production and distribution of new cars, and the impact could be wide-ranging.A U.A.W. strike against one or more of Detroit’s Big Three — Ford Motor, General Motors and Stellantis, which owns Chrysler, Jeep and Ram — is likely to quickly affect the U.S. economy, particularly in the Midwest. And a prolonged strike, by crimping the availability of new vehicles, could lead to soaring car prices. The combination of slower growth and higher prices could complicate matters for the Federal Reserve, which has sought to bring down inflation while maintaining job growth.“We’ve been counting on vehicle prices coming down, adding to the disinflation and taking pressure off the Fed so the Fed doesn’t have to keep on raising interest rates,” said Mark Zandi, chief economist at Moody’s Analytics. “This makes that much more difficult.”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.“In 2019, General Motors could look at their inventory and say, ‘We can take a 10-day strike, and hardly anybody who wants one of our cars is going to be unable to get it,” said Patrick Anderson, the principal and chief executive of the Anderson Economic Group. “That’s not the case in 2023.”A strike could also have a spillover effect on the automotive supply chain. Gabriel Ehrlich, an economic forecaster at the University of Michigan, said the automakers’ suppliers — the businesses that make brakes, headlights and catalytic converters — would begin to be felt after about two weeks, with employers cutting back on employment and, as a result, those laid-off workers reducing their own spending.In Michigan, the auto industry has slipped in prominence but still contributes meaningfully to the economy. Mr. Ehrlich’s analysis, which assumes a six-week strike against just one automaker, forecasts a slowdown in payroll growth in the fourth quarter.How the individual automakers weather the storm could vary. Stellantis will be able to satisfy consumer demand longer than Ford or General Motors because it has greater inventories, according to Pat Ryan, the chief executive of Co-Pilot, a car-shopping app that tracks the inventories of car dealers. The result will still be higher prices for consumers, Mr. Ryan said, for both used and new vehicles.Ultimately, the automakers will be able to make up for lost production, and selling their vehicles at higher prices — in addition to not paying wages during the strike — will help for a time. But things will become more challenging if automakers are forced to stop making their most profitable and popular cars, which are already in short supply.“If you’re a G.M. dealer or G.M., you’re going to feel a lot of pain if the Tahoe line shuts down,” Mr. Ryan said. More

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    Automakers and U.A.W. Remain Far Apart as Contract Deadline Nears

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    The United Auto Workers has said it is prepared to strike at General Motors, Ford and Stellantis if a deal is not reached before current contracts end on Thursday.The United Auto Workers union and the three established U.S. automakers remain far apart on wages and other issues with less than a week to go before contracts covering 150,000 union workers expire.So far, the companies — General Motors, Ford Motor and Stellantis, the parent of Chrysler — have offered to raise pay by 14 percent to 16 percent over four years. Their offers include lump sum payments to help ease the impact of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about a third less than veteran union members.But the union’s combative new president, Shawn Fain, has dismissed the offers as “insulting,” noting that the three manufacturers have been making near-record profits for almost a decade, and that pay packages of top executives have increased substantially. He has been seeking pay increases of about 40 percent and repeatedly warned that workers were ready to leave assembly lines when the current collective bargaining agreements with the automakers expire on Thursday.Mr. Fain has said the union is willing to strike at all three automakers simultaneously, a step it has never taken before. An across-the-board stoppage would deal a big blow to the economies of Michigan and other states.“We aren’t going to stand by and allow them to drag out the negotiations like they’ve done in the past,” Mr. Fain said Friday in a video on Facebook. “If we hit 11:59 on Thursday without a deal at any of the Big Three automakers, there will be a strike — at all three if need be.”A Summer of StrikesSee how a wave of labor activity in the United States this summer compares with decades past.The talks are taking place during a sweeping shift from combustion engine cars and trucks to electric vehicles, which require fewer parts and less labor to produce. U.A.W. leaders and members are increasingly worried that the transition will eliminate jobs and, over time, reduce wages and benefits.The automakers are also worried about the transition. G.M., Ford and Stellantis are spending tens of billions of dollars to build new factories and scour the world for battery raw materials like lithium. Company executives have argued that offering the U.A.W. members big raises could leave them at a significant cost disadvantage to Tesla, which dominates the U.S. electric car market and employs nonunion workers.The auto industry is the largest U.S. manufacturing sector, and accounts for about 3 percent of the nation’s economic output. The three Detroit automakers operate dozens of plants that make about 500,000 cars a month.The Anderson Economic Group, a research firm in East Lansing, Mich., estimated that a 10-day strike against the three companies would reduce the companies’ profits by $1 billion and wages by $900 million for U.A.W. members and workers employed by other companies that depend on the automakers.Aside from wages, the union and the companies remain far apart on several other matters, including measures to preserve jobs and discourage the closing of U.S. plants, increases in retirement benefits and cost-of-living adjustments, which were once standard in U.A.W. contracts.The union has made some progress in its discussions with Ford. In response to Mr. Fain’s demands, the automaker offered to increase wages by about 15 percent, through a 9 percent increase in base wages and one-time lump sum payments of $11,000 per worker. While Mr. Fain rejected that, the two sides have continued bargaining. He was scheduled to update U.A.W. members later on Friday about Ford’s latest offer.Talks with G.M. and Stellantis have proceeded more slowly. The U.A.W. filed a complaint last week with the National Labor Relations Board, saying the two manufacturers had refused to offer proposals in response to the union’s demands and were not negotiating in good faith.G.M. responded by offering a combination of base wage increases and lump sum payments that would lift worker pay by about 16 percent. “We have already said we want to reward and recognize our employees with wage increases,” Gerald Johnson, G.M.’s executive vice president for global manufacturing, said this week.Agreeing to all of the union’s demands would threaten G.M.’s ability to compete, he added.Mr. Fain said the wage offer didn’t go far enough to make up for the impact of inflation on workers’ take-home pay over the last decade, and was too little in light of the profits G.M. was making. The automaker reported profits of $7 billion in the first half of the year. Mr. Fain also complained that G.M. had rejected the union’s proposals on job security, retiree pay, cost-of-living adjustments and other issues.Stellantis submitted its proposal to the union Friday morning, offering a 14.5 percent rise in base wages with no lump-sum payments.“This is a responsible and strong offer that positions us to continue providing good jobs to our employees,” Mark Stewart, the chief operating officer of Stellantis’s North American operations, said in a statement. “With this offer, we are seeking a timely resolution to our discussions.”Stellantis, which is based in Amsterdam and was created by the merger of Fiat Chrysler and Peugeot in 2021, earned 11 billion euros ($12 billion) in the first half of the year, a record. More