[anjan_c2007]

A strike has been called by United Auto Worker's Union boss Shawn Fain of the US. The strike has commenced since 15.09.23 and 12,700 workers have joined. UAW member workers, working at GM, Chrysler and Stellantis parts distribution centres have gone on strike to press for higher wages from their managements. Ford is excluded as it is in talks for a wage increase with UAW office bearers. This is a new tactic by UAW to arrive at enhanced wage package from one targeted company and leave that company alone. Then comes the next step, where the union will make workers of other companies go on strike to make those managements buckle under pressure saying, if Ford Motors can make progress in wage hike talks, you also should. 38 sites owned by GM and Stellantis have been hit.

The dispute will raise car prices ultimately when resolved. Pay rises by 20% are being demanded. The companies and workers have already lost US $ 1.6 billion, the breakup being $500 million for each of the three car makers and $ 100 million in lost wages for workers. UAW has about 140,000 members. President Biden has stood for the workers saying he has sent senior advisers to mediate.

Sources say, Toyota and Tesla do not have unionised workforces and stand to benefit should car prices of these rival carmakers get raised.

Details on this link:-

BBC News - UAW strike expands to dozens of sites at GM and Stellantis
https://www.bbc.co.uk/news/business-66893481

[RahulNagaraj]

The United Auto Workers (UAW) has launched a strike against the 'Big Three' automakers in the USA, namely General Motors, Ford & Stellantis. As per reports, UAW leaders called for a work stoppage at three factories: a GM plant in Missouri, a Stellantis facility in Ohio and a Ford assembly plant in Michigan. The strike came after talks around compensation and benefits collapsed.

According to reports, the union has demanded a wage increase of up to 40% over the course of the next 4-year contracts, full pay for 32-hour work weeks, better retirement pensions and improved health care. Shawn Fain, UAW President, stated, "What’s driving members’ expectations are the Big Three’s profits".

Also, another reason for the steep wage increase by UAW is the high inflation since securing current contracts back in October-December 2019. Reports mention that since the start of the current contracts, hourly wages among motor vehicle & parts manufacturers have grown to an average of $27.99, while across all other industries, the average has grown to $33.82. However, inflation is said to have eroded most of these gains. As per previous UAW contracts dating back decades, many autoworkers had received cost-of-living raises, which kept pace with inflation, but these provisions were jettisoned after the 2008 financial crises upended the auto industry.



Reports also state that workers haven't been rewarded as well as the executives running their company during the period of high profits. According to a public filing, the compensation of Mary Barra, Head of GM, grew by 32.5% from 2018 to 2022, during the same period, a median GM employee's pay grew by just 2.8%. Similarly, at Ford, CEO Jim Farley received an 18% pay rise between 2018 to 2022, while the company's employees had a pay rise of 16.1%.

A UAW Local 862 member at Ford's truck plant in Kentucky, said, "I feel like this money should be spread around. Not evenly per se, but show us the same gratitude you’re showing the CEO."

The three companies have made their counter-offers, however, they fall short of UAW's 40% target. Stellantis proposed a 14.5% boost in wages, while Ford offered a wage hike of 20%. However, both were rejected on grounds of being "deeply inadequate" and "barely making up for the past raises combined with inflation", respectively.

The companies state that they need to balance their labour costs with future EV infrastructure investments. Stellantis put out a statement saying, "At 40% greater cost than conventional technology, passing the additional cost of electrification on to consumers is not an option as it puts EV affordability at risk for middle-class buyers."

As per reports, the UAW is supporting its picket lines by paying striking members $500 a week. Also, as per a Goldman Sachs Equity Research estimate, the union's $850 million fund would last around 11 weeks if all the 146,000 UAW members went on strike at once.

The union also stated that if the negotiations remain deadlocked, they could call for more walkouts, which could hurt the revenues of the three automakers. The Goldman Sachs research states that in the event of a full strike, GM and Ford could lose as much as $2.5 billion - $3 billion every week.

Source: NBC

Link to Team-BHP news

[GTO]

It is quite a big, disruptive one. Fain - the UAW Chief - is playing hardball and stood up Ford & GM bosses on two different occasions! There are two lines of thought. The UAW is making outrageous demands, only to settle somewhere in the middle (typical negotiating tactic). The 4-day workweek is a useless ask. While 40% might sound like a lot, do keep in mind that their increases since the 2008 bankruptcies have been far lower than inflation. Furthermore, a lot of factory workers don't actually work 365 days of the year - they have a lot of downtime in between.

Both sides have a point and they will settle somewhere in the middle. The UAW better not play too tough as it will lead to even more manufacturing moving outside the USA.

[aniketi]

Originally Posted by RahulNagaraj

According to reports, the union has demanded a wage increase of up to 40% over the course of the next 4-year contracts, full pay for 32-hour work weeks, better retirement pensions and improved health care. Shawn Fain, UAW President, stated, "What’s driving members’ expectations are the Big Three’s profits".

Quite insane demands. All these companies should setup plants in India, they will get many benefits. Here people are ready to work 48 hrs a week at much less pay. This is a good opportunity for India to market India as a hub for Auto manufacturing across the world. We should grab it with both hands.

If India can become global auto manufacturing hub, it will give tremendous boost to our economy. I guess we have huge potential for manufacturing as we have plenty of engineers and skilled labor available.

[Turbohead]

Originally Posted by aniketi

This is a good opportunity for India to market India as a hub for Auto manufacturing across the world. We should grab it with both hands.

If India can become global auto manufacturing hub, it will give tremendous boost to our economy. I guess we have huge potential for manufacturing as we have plenty of engineers and skilled labor available.

I wonder why GM and Ford left their plants in India. I wonder why they never converted it to handle their international products - especially Ford which dumped their state of the art facility in Gujarat for a pittance.

Coming back to the strike - even if wages are increased, expect massive investments to automate the process as much as possible in order to ensure profitability. Workers who don't skill up/re-skill themselves with the times won't be shown mercy.

[anjan_c2007]

It's a cause of concern as the UAW with its arm-twisting tactics will most likely have a final say in the matter as the GM, Chrysler and Stellantis managements buckle under pressure.

Ultimately, with the increased price tags we cannot be sure as to how these hiked prices could be a dampener for sales of these carmakers offerings? The Japanese and S. Koreans are offering VFM products, with many of these featuring in the US Top Ten best sellers in various categories. The customers for mass produced cars are very sensitive to prices and price-competitiveness is important for carmakers. Patriotism is on the backseat when such personal goods purchase preferences by the American masses are perused.

The US carmakers could look at options to progressively use more and more robots at their assembly lines.

The bankruptcies of the Big Three during the 2009-10 market collapse and economic meltdown had the CEO's of these companies landing at Washington D.C. , though in their private planes to seek doles from the Obama administration.

The debacle of the British car industry and annihilation of almost all their mass produced car marques starting since the 1970's and ending around the turn of the millennium, is still afresh on our minds.

GM had to cull their Saturn, Oldsmobile and Pontiac marques during the last two decades, once for all. And with Toyota at the top as a carmaker, GM has settled at #2 and has got used to this position. Others like Ford and Chrysler are further relegated rankwise. In this backdrop, would UAW with its arm-twisting prefer that the American brands and their very own one century plus old car industry become history?

In the final outcome as has been always the case, the US, German and French governments are extremely sensitive towards survival of their homegrown car brands. The British government wasn't sensitive then, when their car industry collapsed succumbing to the foreign brand onslaught. It all started since 1974 in the U.K. and the U.K. governments since then till 2001 (brand Rover annhilation) were like sitting ducks watching their marques going down the drain or being victims of foreign takeover at ridiculously low prices.

All said and done, the domestic brands need to be competitive to survive.

[amitoj]

Originally Posted by GTO

While 40% might sound like a lot, do keep in mind that their increases since the 2008 bankruptcies have been far lower than inflation. Furthermore, a lot of factory workers don't actually work 365 days of the year - they have a lot of downtime in between.

Add to that the fact that their pension funds were wiped out when these companies had to be bailed out and the workers took a haircut. When these companies became profitable, they decided to go for stock buy backs to increase the profits of the C-suite instead of looking after their workers. The least they can do is offer them a living wage. By the way, the 5 day work week also came into existence thanks to the UAW back in the day. That, and the 4 day work week has been gaining steam ever since this was tried out at several companies with remarkable success.

All said and done, the living conditions of an average American are quite drastic. Homelessness, record credit card debt and losses, sky high rents, high healthcare costs, I tell you this country is being hollowed out from the inside. The middle class that came into being thanks to this same auto industry is almost wiped out. It is very common to see people working multiple jobs and even then having to live out of their cars. None of this is being helped by the Fed keeping the interest rates high at the pretext of controlling inflation when it is really greedflation.

Originally Posted by anjan_c2007

Ultimately, with the increased price tags we cannot be sure as to how these hiked prices could be a dampener for sales of these carmakers offerings?

Labor is approximately 10% of the cost of manufacturing a car. Surely they can find efficiencies elsewhere to absorb this increase without raising the price. But I am not hopeful of that. The average price of a new vehicle was less than $40k in 2020 and now it is touching $50k. Surely this 25% jump is not due to increased cost of manufacturing a car? But none of this is going to stop the car dealers from hiking up their prices and demanding premiums above MSRP.

I say more power to the UAW, the Teamsters and the unions at Amazon, Starbucks and all the other big corporations that have opted for shareholders over looking after the very people that make those profits possible. Democracy is dead here because the elected "representatives" (red or blue) are representing their donors, not their voters. Unions are the only option left for the people to get their voices heard.

"gets down from his soapbox"