United Auto Workers’ Strike Intensifies

Posted by on Sep 28, 2023 in Economics, Stuff You Should Know

On Friday, September 15, 2023, thousands of autoworkers went on strike. The work stoppage included nearly 13,000 workers at three auto plants in the Midwest. A strike is when union members stop working in order to get their employer to meet their demands. 

Members of the United Auto Workers union (UAW) organized a strike against Ford, General Motors (GM), and Stellantis which was formerly Chrysler. Together, these companies are known as the Big Three automakers in the United States. This is the first time the UAW has ever held a strike against all Big Three automakers at once. 

Close-up view of hands upholding a protest sign with the word STRIKE.
The UAW is on strike against American automakers.

UAW president Shawn Fain is taking an aggressive approach to this strike. Nearly 5,600 more workers from across 20 states joined the strike on September 22.  Fain is keeping open the option to strike at other factories and distribution facilities as well.  

What Are the UAW’s Demands? 

The UAW has four main goals for this strike. First, the union asked for a wage increase of about 40 percent over 4 years. After the strike began, the union lowered that number to 36 percent. There is an enormous gap between the pay of workers and the pay of the Chief Executive Officers (CEOs). The CEOs of the Big Three earn upwards of $21 million per year.  Fain says the increase the UAW wants would reflect CEO pay increases.  

Second, the UAW is asking to restore annual Cost of Living Adjustments (COLA) in workers’ paychecks. During the 2008 financial crisis, the union agreed to stop COLA payments to help the auto companies. Now because of inflation the cost of living has gone up, but workers’ pay checks have not. In effect, workers make less now than they did in 2008.  

Third, the UAW wants automakers to end the two-tiered wage and benefits system. Under this system, a newly-hired worker may do the same job as a veteran worker but get paid about half as much. There is an 8-year progression for workers to earn the top wage. The UAW has proposed a 90-day plan for new workers to be able to earn the top wage and benefits.  

Finally, and perhaps most importantly, the UAW wants job security for its members. As the auto industry transitions to Electric Vehicles (EVs), plants may shut down to make the change. EVs have fewer mechanical parts than gasoline powered vehicles. That means fewer workers would be needed.  The UAW wants the right to strike if a company chooses to close a plant. Usually, contracts have a no-strike clause while the contract is in effect.  

What Have Auto Makers Offered?  

The Big Three began by offering wage increases of 9 or 10 percent. They have since increased that to around 20 percent. The UAW believes this rate is still too low due to inflation. . Additionally, the Big Three’s profits rose dramatically during the pandemic. Profits are up 65 percent over 4 years. 

So far, Ford has come the closest to meeting the UAW’s demands. Although the two sides are still in talks, Ford has agreed to provide workers with up to 2 years of pay and health benefits for layoffs and plant closures.  Ford has also agreed to allow the union to strike if the company plans to close a factory. 

Negotiations continue between the UAW and the Big Three. Whatever agreement may be reached, UAW members will have to vote on it to approve it.  

Dig Deeper The Allied Pilots Association and the Teamsters union representing UPS workers negotiated new contracts during the summer of 2023. Research to see what wage increases and other benefits these unions have negotiated for their workers.