It is a very different economy than it was four years ago when unions and automakers negotiated their labor contract, which they will be discussing next year.
Key Details
- United Auto Workers is scheduled to sit down with General Mothers, Ford, and Stellantis next year to renegotiate their next four-year labor contract, which will affect hundreds of thousands of union employees.
- The present economic downturn has hurt both the automakers and employees, and unions are expected to come to the table with strong demands.
- Wages have decreased 5.1% since May 2021, while the Consumer Price Index has skyrocketed 11.7%, according to the U.S. Bureau of Labor Statistics.
- “Inflation is eating away at workers’ pay during rising labor unrest across the U.S. Strikes have flared up at Deere & Co., Kellogg Co., and other unionized companies in the past year,” says Bloomberg.
Why it’s important
There are multiple forces and pressures drawing unions and automakers in different directions at the moment. Major manufacturers like Ford are struggling with the ongoing supply chain crisis which is affecting production.
As we previously reported, major manufacturers are also expanding production of domestic electric vehicle (EV) production. These factories may bring in more jobs but updated production processes may remove a number of union jobs.
“President Joe Biden has repeatedly called for EV jobs to be ‘good-paying union jobs,’ but the simple structure of an electric powertrain—essentially a battery and some motors to turn the axles—means it requires fewer people and hours to make,” says Bloomberg.
Automanfactuers want to lower wages for battery workers, and many of them have been bringing in large temp workforces that don’t immediately qualify for union benefits to meet short-term needs. Unions want to make sure these employees have a shorter fast track to higher wages.
Unions are coming to the table with some leverage and are eager to stay strong in the face of political and economic pressures.
Notable quote
“When they last came to the table, in 2019, GM workers went on a 40-day strike that cost the company about $2.9 billion in lost earnings. The hot-button issues then were the use of temporary employees and a two-tier wage scale. Now rising prices are eroding wages at a time when automakers have enjoyed lush profits from record-high car prices fueled by vehicle shortages. That’s giving the UAW added leverage for next year’s contract negotiations, and union leaders will be under pressure to prove their mettle to a restive membership,” says Bloomberg.
