Potential UAW Strike: A Critical Blow to Detroit Big Three’s Future

The future of North American, Detroit Big Three electric vehicle production could be in trouble if the UAW forces autoworkers to strike.

Typically, The United Auto Workers (UAW) union chooses one automaker and negotiates with that company to an agreement that is then presented to the other two. This time around, the new UAW President, Shawn Fain, is working to negotiate with all three at the same time. These contract talks come about every four years, which means that every four years there’s a potential for a strike, but this time things are a little different.

What makes this negotiation different?

In addition to negotiating with all three automakers at once, the union demands are pretty steep. Over the past four years, inflation has significantly impacted most of the country with nearly every consumer good, including vehicles, increasing in price. The union’s wage demand over the next four years is an increase in wages of nearly 40%, which is an incredible increase. This could create a serious problem in regard to the price of domestic-branded vehicles, but something more significant could be looming large. A strike at this time could be detrimental to the auto industry in North America.

Can the Detroit Big Three keep up?

Most automotive brands aren’t staffed by UAW workers, but Ford, GM, and Stellantis plants are. With the increased push for more electric vehicles and improved battery technology, a labor strike could be a serious problem. The Detroit Big Three need to compete with Tesla and Rivian, which are only two of the domestic names in the electric vehicle world. Competing with these two companies isn’t typically a problem considering the stronghold that Ford, GM, and the Stellantis brands currently hold in North America, but that grip could loosen with a strike.

How long could the labor strike last?

Currently, experts estimate a 45-day strike as a possibility. You might not expect a strike that only lasts 1.5 months to have a lasting impact on the auto industry, but it could. This strike would cost the three automakers $40 billion in production, based on the sales generated by the three companies in North America. Although not all production is in the United States, it will be difficult to finish production without UAW-staffed plants in operation. This could be the perfect time for the UAW to make demands that should be met by the automakers.

Will the strike take place?

Most people aren’t aware that the UAW negotiates on behalf of its membership every four years. These talks are regular and ongoing, but this time serious increases are expected and should be met. All three automakers have made proposals that could be accepted to meet some of the UAW’s demands. Its difficult to understand whether or not these strikes will take place, but the current UAW president is handling things in an unconventional manner, making it difficult to know whether or not the strikes should take place. Although autoworkers will lose wages, the automakers will lose much more if the strike happens.

A simultaneous strike could be a warning shot

The first-ever simultaneous strike against the Detroit Big Three automakers is expected to begin if an agreement isn’t reached soon. The first step in these strikes could be a 10-day version that would halt production at specific plants for a short time unless wage increases are met. So far, all three automakers have only met the UAW demands at about half of the desired wage increases, which could mean the workers won’t be running the production line for several days, which will cost all three automakers money.

What other UAW demand are on the table

In addition to wage increases, the union’s demands include restoring defined pensions for all workers, 32-hour work weeks, and additional cost-of-living hikes. The UAW is also looking for job security guarantees and an end to the use of temporary workers.

If more demands aren’t met, the 10-day strike could cost automakers more than $5 billion and might lead to a large disruption of the automotive supply network.

The President weighs in

The U.S. President, Joe Biden, encourages all parties to continue to negotiate and avoid a strike. The goal is to find a winning agreement for all sides that would keep UAW workers going strong at the Detroit Big Three automotive plants. Biden encouraged all three automakers to provide better offers to keep the union reps at the table and make this work for everyone.

A labor strike would be detrimental to the North American automotive industry right now; will the UAW strike or will they come to an agreement with Ford, GM, and Stellantis soon?