United Auto Workers launches a historic strike against all Big 3 automakers

https://www.npr.org/2023/09/15/1199673197/uaw-strike-big-3-automakers

by RobLach • 3 years ago

109 102 3 years ago

great_psy• 3 years ago

Economically this seems like a ripe time for striking.

US wants to onshore/friend shore production, so there is a demand for US workers at any cost. Barring automation replacements.

reducesuffering4• 3 years ago

Onshore production already mostly happens, and it’s for superior non Big 3 vehicles like Toyota and Tesla. To me, it looks like the Big 3 autos are floundering severely, are the only ones unionized, and this strike / 40% pay increase demand is only going to further cripple the big 3’s ability to compete in the market. Ford and GM have already completely ceded sedans while Chrysler is a hollow shell

FirmwareBurner• 3 years ago

But then who's gonna make oversized pickups?

slantedview2• 3 years ago

The big 3's profits were $250 Billion over the last 10 years. The idea that paying their workers fairly is going to cripple them is nonsense.

consp• 3 years ago

As stated in the article the labor cost is less than 5%. It won't matter except for shareholder revenue.

orwin• 3 years ago

I mean, the C-suite have had a 40% pay increase, why shouldn't the worker have the same?

IntelMiner2• 3 years ago

I'm not sure I'd call Tesla "superior" to the "Big 3"

Pointing out the endless flaws in Tesla cars that have rolled off the line (joints that don't quite align, slight blemishes etc) are a running joke for many of its detractors

Not to mention the absolute clown fiesta of Elmo's "Cybertruck"

iancmceachern5• 3 years ago

Agreed. One note.

The auto industry in the US is just about as automated as possible, given current tech, economics, etc.

zapdrive• 3 years ago

There's always room for more automation. Tesla, for example, is much more automated in many areas.

SkyPuncher• 3 years ago

I have strong doubt about that. I grew up in an automotive family and went to a heavily automotive school.

You basically have three major hold backs:

* Parts requiring manual assembly. My first summer job was at an auto supplier. It involved running 3 wires though a piece of conduit and wrapping it with electrical tape. It was a connector for some sedan brake light. Family friend. They still run the business the same way. Parts change too frequently and are too hard to automate.

* automation still requires maintenance. This isn’t just replacing parts on machines. This is also the entire supply of parts that go into fixing machines. Lines going down is incredibly expensive. Parts aren’t always readily available. There’s a whole industry of small “tool and die” shops that have the capability to build a part from specs next day.

* plants are huge and expensive., you don’t retool unless you have good justification. Typically, this happens with a model refresh.

chmod600• 3 years ago

Is this just a final battle for the remaining scraps of money in a dying industry? Or is this a real, substantive negotiation that will push the industry to a better place?

slantedview2• 3 years ago

The big 3 made over $21 billion in profits in the first half of this year. This isn't about fighting over scraps, it's about fighting for a fair share of the wealth produced by workers.

DennisAleynikov4• 3 years ago

That's gross profit, which doesn't mean cash.

The profit was about 4b which, okay let's give everyone in UAW a share of that and... Oh it's so small that it doesn't fix anything?

aapl888893• 3 years ago

The big 3 also had $354 billion in debt. Will workers pay that down too?

gnicholas• 3 years ago

It's not scraps of a dying industry if every time you die you get tens of billions in bailout money. [1]

1: https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wha...

DennisAleynikov4• 3 years ago

This only furthers the point being made.

Why are we keeping them on life support?

mjevans• 3 years ago

I wonder if they'd settle for a (retroactive relatively) reduction in CEO Pay, coupled by an increase of at least the CEO's pay increase or better relative to the last contract period.

## HYPOTHETICAL EXAMPLE ##

+ Prior to contract CEO made 10,000,000 per year. Since then they (currently) make 14,000,000 per year.

+ Union is asking for 40% increase to match CEO's increase.

? Would the union accept CEO's total compensation package, including retroactive to cover the same period, decrease to E.G. 20% (CEO now makes 12,000,000 per year in this hypothetical) with a union member INCREASE of 20% or greater (possibly including a one time contract signing bonus to cover the back period)?

kemotep4• 3 years ago

Is the CEO cut in pay to cover the costs of pay raises? The article mentions that 13,000 workers will be striking but if we round that down to 10,000 a 2 million dollar CEO pay cut would cover a 10 cent per hour pay raise for those workers. This strike is against all three major US automakers so matched between all three CEOs would be a 30 cent per hour raise. And there are 150,000 UAW members.

I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.

iancmceachern5• 3 years ago

Not the point.

The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises.

Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management.

A rising tide raises all ships.

eesmith4• 3 years ago

No. Why should it?

The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline.

If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x.

Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree.

But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million.

Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period.

BTW, this sort of question works better with actual numbers. From https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequ... :

"The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week.
As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%.

Also, as an indication of how looking only relative to the recent contract period isn't enough:

The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics.

0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.

qeternity2• 3 years ago

The article points out how union members are still affected by concessions they made in 2008 to help auto companies then.

UAW were a huge reason Detroit was in such bad shape in 2008. I wouldn’t call those concessions.

wongarsu2• 3 years ago

In case anybody else was wondering who the Big 3 are: the article talks about the Detroit 3, which are Ford, General Motors, and Stellantis (the merger of Fiat-Chrysler and Peugeot with Dutch headquarter).

radlad• 3 years ago

Boston 3?

ductsurprise2• 3 years ago

Tea Party Trifecta?

wongarsu2• 3 years ago

Fixed, that's what I get for not drinking enough coffee

jansan• 3 years ago

Oh, I used to work in the automotive instry but somehow missed that Stellantis regrouping and rebranding. Hope they can find some synergies between Dodge and Citroen.

kergonath2• 3 years ago

That would be a hell of a Frankencar, though!

sofixa• 3 years ago

There has been no rebrand, Stellantis is just the group name for the former FCA and PSA groups. All previously existing brands will continue to exist as before, just now based on common platforms and targeting different markets, same as before, just on a bigger scale. E.g. PSA bought Opel from GM (and did a massive turnaround making it profitable in 2 years while it was loss making for decades before) to have a German brand known for quality to target markets where French brands were known as unreliable. An Alfa Romeo SUV, a Jeep SUV and a Peugeot SUV are targeting entirely different markets, even if the underlying vehicle is pretty much the same.

Hope they can find some synergies between Dodge and Citroen

They probably will, the CEO is very good, and as mentioned earlier, PSA (he was CEO there before FCA lost their own hero CEO and decided to merge with PSA) managed to turn around Opel quite quickly.

altacc• 3 years ago

During the 2008 financial crisis, the UAW made major concessions to help auto companies get back on their feet. Workers are still feeling the effects of those concessions to this day...
Collectively, the Big Three automakers have seen their profits soar

This is why you need unions. Most businesses will happily screw over workers whenever they can to maximize profits and the workers are lucky if they get peanuts back when they're swimming in cash. Ford makes the hyperbolic claim that agreeing to UAW demands would bankrupt them as it would cost $15 billion. Their profit in the last 12 months is $25 billion. The maths is more complex than simply 25-15 but shows how companies will obviously lie to protect their shareholder profits.

rahimnathwani2• 3 years ago

  Their profit in the last 12 months is $25 billion.

No, Ford made only about $4bn in the last 12 months: https://ycharts.com/companies/F/net_income_ttm

You might have googled 'gross profit' which isn't the same thing, as it doesn't account for the many costs of running a capital-intensive business, like machines and stuff.

gamblor956• 3 years ago

No, that's 4bn net profit for the last quarter.

The table below the chart makes it abundantly clear that they are reporting quarterly numbers.

kawhah2• 3 years ago

Well what's the profit of the other two? Does it add up to $21 billion?

carlob• 3 years ago

I don't understand why you are looking at net profit, taxes are computed after payroll costs are taken out. Sure there will be some interests to be paid, buy I don't see how gross is more wrong than met here.

qp11• 3 years ago

I dont see how this makes the case for why unions are needed. It makes the opposite case of how ineffective unions are against the hyper efficient corporate robot class. The corporate robot is programmed to undercut labor if they cant generate revenues any other way (and some do it anyway). If the robot doesn't, it will be replaced by a robot that can. The unions cant reprogram the robots no matter what, cause they are not the programmers. The programmers are the banks and financial system.

The banks and financial system are long overdue a gigantic kick in the head. But thats not happening cuz people are so distracted and scatter focused on the wrong stuff.

baq• 3 years ago

unions are for what workers what HR is for the corporation. negotiating wages is only one of the things that they should be doing.

senttoschool• 3 years ago

This is why you need unions.

What happens if the unions succeed in draining the profits, corporate has less money to invest in R&D, and a foreign efficient automaker comes in and takes all the market share away from the union-led automakers?

What happens then?

IntelMiner2• 3 years ago

The "free market" takes its course and unionized labor is (sadly) replaced by labor operating in companies with far worse tracks on things that detract from profits like "human rights" or "people not commiting suicide over work" [1]

https://en.wikipedia.org/wiki/Foxconn_suicides

Tade02• 3 years ago

If there are any profits to speak of, then clearly either already enough is spent on R&D or nothing at all.

kawhah2• 3 years ago

The experience of Tesla clearly shows that this is a completely inaccurate picture of what motivates R&D. For decades big automakers took steady profits but declined to spend much on R&D, preferring to make incremental refinements to a conventional product. When they were challenged by an efficient upstart with an innovative product, the threat to their steady profits suddenly made them decide that they were prepared to spend on R&D.

mgiampapa• 3 years ago

The 80s and early to mid 90s?

eesmith4• 3 years ago

Has this example happened?

Most union workers don't want their employment to end. Why would they want to destroy the company this way?

Most large company CEOs can retire on the wealth they've already accumulated. Why should we assume they have higher long-term interest in the success of the company?

What is an example of union-led automaker? Perhaps some small cooperatively-owned car company somewhere? Or do you mean worker representation on the board, like at BMW in Germany, or how there was once a union seat on Chrysler's board?

What happens if a global investment company buys another company, stops all R&D to focus on short-term gain, runs the company into the ground, sells what's left, and makes an overall profit?

What happens then?

Oh, right, what happens is the investment company owners make a lot of money and the ex-employees get screwed. "Vulture capital" doesn't get that name out of love, and my life was negatively affected when KKR did a leveraged buyout of the non-union company where my father worked.

mr_toad2• 3 years ago

What happens then?

Under-investment is how Detroit got the way it is already.

jakupovic3• 3 years ago

We get more efficient companies and life goes on.

gwd• 3 years ago

This is why you need unions. Most businesses will happily screw over workers whenever they can to maximize profits and the workers are lucky if they get peanuts back when they're swimming in cash.

The funny thing is, they might behave this way even if the management of all the car companies actually agreed with the unions and wanted to give them a 40% increase.

Suppose, hypothetically, that most of the management are actually good people who want to share their profits, but don't know what the management of the other companies think. Here are their options:

1. Raise worker wages in line with profits. 1a. The other companies do the same. Everyone's happy, no strike. 1b. The other companies don't do the same. Your company now makes significantly less profit; it's punished by the market -- stock price goes down, meaning you're at a risk of either a hostile takeover, or the board of directors firing you and getting someone else who's more ruthless (and will punish workers even more).

2. Talk with the management at other companies and convince them to raise wages. Actually, this is illegal, and you could face really steep legal fees or consequences.

3. Keep wages the same, and hope the unions do their job and call a strike.

Basically, #3 is the least risky option.

ductsurprise2• 3 years ago

Can Youtube/Twitch/etc manage to fulfill this product gap too?

Seriously though, yes... Support The Unions! Stay strong!

rendang3• 3 years ago

It makes sense that in such a tight labor market, unions would be flexing their strength. What would really be a big deal is if union participation starts taking off, e.g. by some of the car plants in the South unionizing

cHaOs667• 3 years ago

"... in the US" - that is missing in the title.

travisporter• 3 years ago

lots of talk of automation and Tesla - can anyone give more insight into Teslas purported new building technique and whether it’s actually innovative? https://www.theverge.com/2023/9/14/23873345/tesla-gigapress-...

7e• 3 years ago

Unions: organizations whose sole purpose is to acquire a monopoly on the means of production. They’re parasites, but corporations are worse. Don’t let either ever gain the upper hand.

xnx• 3 years ago

Similar to the writers strike and AI, auto workers are facing a future of electric cars that require less labor to build.

ryzvonusef• 3 years ago

Tesla is moving to a McDonald style system; create a few big giga-castings of the main car body parts; create modules that fit exactly into those castings, assemble the few modules and castings in a few simple steps.

these steps minimise human or eliminate human use, and encourage either robotization, or task simplification to such an extent that labour can easily be replaced with another with minimal training.

example from autoline channel, showing how simplified the assembly system can become with the casting base:

https://www.youtube.com/watch?v=lawGMl8sHzc

And Tesla is just going further with the casting

https://www.reuters.com/technology/gigacasting-20-tesla-rein...

https://youtu.be/0Ukp4tm0JkM?t=196

this means that ICE vehicle skills are becoming exceedingly irrelevant. Obviously not everything is gone, but imagine how simple it is to train or replace fast food workers; or how easy it is to assemble furniture ikea-style. A lot of ICE- skills are now not required in EVs, and these workers will have to find alternatives.

Striking just delays the inevitable.

United Auto Workers launches a historic strike against all Big 3 automakers

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