United Auto Workers strike after deadline expires between the union and automakers

Geoff Bennett:

The United Auto Workers launched a strike today. It's the first time the union started a strike by picketing against the Big Three automakers simultaneously.

Amna Nawaz:

The union, under fiery new leadership, has also changed its traditional approach to a walkout by starting with a shot on the production of popular truck models.

Automakers say the workers' demands will endanger their ability to compete. And both sides have portrayed this battle as a critical moment because of a changing marketplace.

After weeks of stalled contract negotiations…

Prostester:

No deals, no wheels, union strong!

Amna Nawaz:

… nearly 13,000 autoworkers walked off the job this morning, saying they had no choice but to strike.

Justin Warwick, Member, United Auto Workers:

It's hard. This is not something everybody wants to do. I don't think anybody wants to do this, but this is what we have to do, so this is what were going to do.

Amna Nawaz:

The UAW strikes aim to disrupt operations for the so-called Big Three Detroit automakers, General Motors, Ford, and Stellantis, which owns Jeep and Chrysler. Combined, they produce half of the roughly 15 million vehicles made in the U.S. every year and employ nearly 150,000 UAW members.

But workers aren't striking en masse. The union is rolling out a new strategy, targeted strikes at a few facilities. The first include three Midwest plants, a Ford Bronco plant in Michigan, a GM truck and van plant in Missouri, and a Stellantis Jeep plant in Ohio.

The union is asking for a 36 percent wage increase over four years and the restoration of some pay and benefits cuts made in the 2008 recession, including cost of living adjustments, an end to a tiered wage system, and changes to pension plans and retiree health care. They are also proposing a four-day workweek.

UAW president Shawn Fain spoke at the picket line just after the work stoppage began at midnight.

Shawn Fain, President, United Auto Workers:

Well, it's a shame. It's a shame we have got to be out here right now doing this, because the companies won't take care of their workers, who they want to call family.

We're not asking to be millionaires. We're not asking to join the billionaire class. We're asking for our fair share of the fruits of our labor. They deserve it.

Amna Nawaz:

The union says companies raked in billions in profits, and worker wages have not kept up. Between 2013 and 2022, combined profits for the Big Three Ford, GM, and Stellantis, surged 92 percent to $250 billion total.

President Biden today gave his support to striking workers and said he hoped for a fair agreement.

Joe Biden, President of the United States: Auto companies have seen record profits, including in the last few years, because of the extraordinary skill and sacrifices of the UAW workers. Those record profits have not been shared fairly, in my view.

The companies have made some significant offers, but I believe they should go further to ensure record corporate profits mean record contracts for the UAW. Let me say that again. Record corporate profits, which they have, should be shared by record contracts for the UAW.

Amna Nawaz:

The companies have countered the union with a proposed pay hike of 17.5 percent to 20 percent, five weeks of vacation, some cost of living adjustments, and more health benefits.

And automakers argue that union demands will keep them from competing with non-union and foreign auto companies, and that it would drive up prices.

GM CEO Mary Barra on CNBC this morning:

Mary Barra, CEO, General Motors:

I'm extremely frustrated and disappointed. We don't need to be in strike right now. We're at the table. We're problem-solving. We want to get this done. This will not be good for the economy overall and, again, for all the communities that are impacted from when a plant is in their city.

Amna Nawaz:

The strike follows a pandemic, supply chain disruptions, and a semiconductor shortage, and comes amid an industry shift to electric, raising union concerns of lower-paying non-union jobs ahead.

The big question now, how will the strike impact the economy?

Mark Zandi, Chief Economist, Moody’s Analytics:

Well, the strike is going to have a negative effect on the economy.

Amna Nawaz:

Mark Zandi is the chief economist at Moody Analytics.

Mark Zandi:

This should not push this resilient economy into recession, certainly not by itself. I mean, obviously, you can construct dark scenarios where the strike extends on, let's say, through the end of the year into next.

If that's the case, then the damage to the economy could be serious enough that it could push us over the edge into an economic downturn. But that seems unlikely at this point.

Amna Nawaz:

The loss of income, says Zandi, could impact those Midwestern communities who rely on auto production jobs. And consumers nationwide could feel that impact too.

Mark Zandi:

It's just going to be tougher to find many of the vehicles that you might want to purchase. It also could result in higher vehicle prices. Vehicle prices have gone skyward here since the pandemic hit because of the supply shortages, and this would only exacerbate it.

I don't think it's a big deal in terms of availability and price if the strike lasts a few days, a few weeks, but if it drags on for a month, two or three, then shortages will become more prevalent and higher prices more likely.

Amna Nawaz:

As negotiations continue, more plants could be called on to strike in the days ahead.