Union members of the United Auto Workers conduct a rally and picket practice near the Stellantis plant in Detroit on August 23, 2023.
Michael Weiland/CNBC
DETROIT – National Auto Workers President Sean Fain appears ready to start a picket line.
Bulldog’s new union leader has repeatedly pledged to push tougher negotiations with Detroit automaker general motors, ford motor and Stellantis Contract negotiations are underway with the contract expiring at 11:59 pm on September 14th.
He argued that this was a tough deadline and, unlike unions in the past, the leadership would not extend it, refusing to lay off some 150,000 auto workers from factories if necessary. claimed not to.
Add to this the fact that Fain and the union have filed an unfair labor practice complaint with the National Labor Relations Board alleging that GM and Sterantis were not negotiating in good faith, as it emerged late Thursday. A strike against one company, if not the whole company. The influence of automakers is more and more inevitable.
Unlike previous union leaders, Fain is trying to negotiate with all three automakers at once, but prefers to pick a “target” company to focus on while extending contracts with others. I refuse. He has also been far more confrontational with automakers than previous union leaders, and has occasionally launched personal attacks on executives.
Some industry analysts and experts say it will take one or more strikes to convince UAW members that the union leadership has fought hard to achieve its demands. There is a view that it is not.
“I expect a strike,” said Art Wheaton, a professor of labor at the Cornell University Labor Institute. “I think it’s quite possible that they will attack Stellantis first, and then give Ford and GM a few more days to come up with a better offer.”
Wheaton believes that with the distance between the two teams, an attack on Stellatis is all but certain. He said unions could use the work stoppage as a warning to GM and Ford to close the deal.
“I think a strike is almost essential for Stellatis, otherwise the deal will never be ratified,” Wheaton said. “Stelantis is picking a fight saying ‘Try me if you dare’.”
Strikes can take many forms, including national strikes where all workers under a contract stop working, or targeted work stoppages at specific factories because of local contract issues.
UAW Chairman Sean Fain said on Facebook Live on August 8, 2023.
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A prolonged strike against all three automakers would be unprecedented and would quickly affect the auto supply chain, the US economy and domestic production.
The Biden administration has shown particular interest in the meeting, including appointing longtime Democratic adviser Gene Sperling to oversee the situation at the White House.
wall street watching
Wall Street has warned for months that jobs could come to a halt, and investors are on guard.
A quick survey of 99 investors by Morgan Stanley found that 58% thought a strike was “very likely.” Next, 24% answered that there is a certain possibility. Only 16% said a strike was unlikely, and 2% said it was “unlikely, if not unlikely.”
Industry and labor experts agree, And for good reason.
The imminent contract deadline follows militant rhetoric by Fain and other union leaders. Years of labor movements with work stoppages, including in the UAW. And ambitious demands by labor unions to raise wages by at least 40%, maintain platinum health care, and work 32 hours a week.
Such requests are usually not made public or even fully reported until near the end of negotiations. This is partly to negotiate in good faith, but partly to avoid expectations of UAW members being either too high or too low. After both sides have announced a tentative agreement, the contract will need to be ratified.
“I’ve always said that the best way to reach an agreement is to negotiate with each other, not through newspaper or television reports,” he said. Dennis Devaney, a senior adviser to Clark Hill and previously served on the board of directors of the NLRB and counsel to GM and Ford. “I don’t think open negotiations will really move things forward.”
Members of the United Auto Workers Union stand on a stopike outside General Motors’ Detroit-Hamtramic assembly plant in Detroit on September 25, 2019.
Michael Weiland/CNBC
Let me be clear: Calling a strike is not just Fain’s responsibility. It is entrusted to the UAW’s 14-member International Executive Board (IEB), led by Fain as chairman. Leaders must approve such work stoppages with a two-thirds majority, based on weighted voting.
Then there is the question of how long the strike will last.
Morgan Stanley found that the majority of respondents surveyed (96%) expect a possible strike to last more than a week. More than a third (34%) expect the strike to last more than a month.
The strike against GM during the final stages of contract negotiations in 2019 lasted 40 days and generated $3.6 billion in profits for the automaker for the year, GM reported at the time.
The UAW has a strike fund of over $825 million, which is used to pay eligible members who go on strike. The strike reward is $500 per week for each member.
Assuming around 150,000 UAW members are covered by the contract, strike pay will cost the union about $75 million per week. So $825 million in funding would cover about 11 weeks. One caveat. This does not include union-funded medical costs, such as temporary COBRA plans, which could lead to even faster depletion of funds.
ratification
For much of the union’s history, it was widely expected that union members would ultimately approve any agreement negotiated and supported by UAW leaders.
But recent negotiations have not, and both sides need to return to the negotiating table.
This was the situation two times ago, in 2015, when negotiations with workers at then-Fiat Chrysler, now Sterantis, rejected a provisional agreement. That same year, GM’s skilled trade workers also voted against an interim agreement with the Detroit automaker, delaying ratification.
Normally, when a tentative agreement is reached between a union and an automaker, the members of the automaker have a local organization vote to accept the tentative agreement into a contract. The entire ratification process can take approximately two weeks for each company.
“The interim agreement between the UAW and the automakers is actually a series of agreements, which include the main body and various provisions such as pension and retirement plans, medical benefits, additional unemployment benefits, profit sharing, personal savings plans and life insurance. It includes appendices on various aspects, including disability benefits, dependent care benefits, and salaried workers (who are also representatives of the UAW),” said Kristin Zicek, automotive policy adviser at the Federal Reserve Bank of Chicago’s Detroit branch. said Mr. blog post.
In 2019, it took another eight weeks to negotiate and ratify all three agreements after reaching the first interim agreement after the GM strike. Negotiations and a ratification vote ended in early December.
A spokesman for the automaker declined to comment directly for this article, but reiterated that both teams are continuing to negotiate in good faith with unions in the hope of a mutually beneficial deal.
– CNBC’s Michael Bloom contributed to this report.
