Auto worker strike 'likely' due to 'insulting' offers from Big Three car companies: ex-labor secretary

Former United States Labor Secretary Robert Reich predicted on Thursday that "it seems likely that the United Auto Workers will go on strike against the Big Three automakers" as the midnight deadline rapidly approaches.

"Ford, General Motors, and Stellantis (Chrysler and Jeep) have presented their latest offers, including a 9 or 10 percent raise for most workers, more paid time off, and increased benefits. The union has called both offers 'insulting,'" writes Reich.

Tom Krisher and David Koenig of the Associated Press note that "the UAW is demanding a 36% boost in pay over four years, and the automakers, General Motors, Ford and Stellantis, formerly Fiat Chrysler, have countered with offers that are roughly half of that increase. The chasm between the two sides threatens to ignite the first simultaneous strike by the United Auto Workers against all three Detroit companies in the union's 88-year history, a potential shock to a U.S. economy already under strain from elevated inflation. It's also a test of President Joe Biden’s treasured assertion that he’s the most pro-union president in US history."

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Krisher and Koenig recall that "the UAW started out demanding 40% raises over the life of a four-year contract, or 46% when compounded annually. Initial offers from the companies fell far short of those figures. The union later lowered its demand to around 36%. The UAW also is seeking restoration of cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, pension increases for retirees and other items."

Asking, "Why is the United Auto Workers taking such a hard line in its negotiations with America's Big Three automakers?" Reich, a long-established champion of labor rights, cites "five big reasons" for the impasse.

Reich highlights that "outsized profits" and "out of sight" executive compensation have not been shared with workers, whose "wages have risen only six percent" in nearly half a decade.

Reich further points out that there is a "two-tier system" at play — one which "pays new hires substantially less than old ones" and another stemming from the fact that "the Big Three have been quietly siting new plants to supply batteries for electric vehicles in non-union states."

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Reich's complete Substack post is available at this link. Krisher's and Koenig's full analysis is here.