Economy. Why are automakers on strike in the United States?

Ford, General Motors and Stellantis: in the United States, the automobile sector has been on strike since September 15, to demand wage increases and greater job security. This is the first time that a strike has affected all three groups at the same time. Due to lack of progress in union negotiations, the social movement spread to new sites on Friday.

President Joe Biden announced that he will visit on Tuesday on a picket line auto workers in Michigan. “It is time to have a win-win agreement” between the auto manufacturers and the UAW (United Auto Workers) union, Joe Biden said on X, marking his “solidarity” with the movement.

What is happening in the automotive sector?

The UAW union is demanding a 40% pay increase over four years for its members, corresponding to that received by group leaders over the past four years.

The union is also advocating for better job security as the transition to electric vehicles takes place.

On Friday, the union reported “real progress” in negotiations with Ford. “At Ford, employees of Rawsonville Components and Sterling Axle will now be on the same pay scale as assembly workers. (…) We have officially reinstated the cost of living allowance which had been suspended in 2009,” the union said in a press release. The UAW also announced that it had “obtained additional job security for our members in the event of an indefinite layoff.” UAW President Shawn Fain noted a “serious desire to reach an agreement” even as “serious problems” persist.

Conversely, negotiations with General Motors and Stellantis are at a standstill. “Both companies continue to offer a deficient cost-of-living allowance that is predicted to deliver zero increases over the next four years. Both companies rejected all our proposals regarding job security,” explains the union.

How many sites are affected?

Since Friday noon (6 p.m. French time), 38 spare parts distribution centers from manufacturers General Motors and Stellantis are now affected by the strike.

“We are not going to wait forever to obtain fair contracts from the “Big Three”, nickname of the three major American manufacturers, launched Shawn Fain, president of the powerful union UAW, in a video.

These sites, located in twenty states in the United States, employ around 5,600 UAW members out of the 146,000 working for the three giants in Detroit, Michigan.

The three factories on strike since September 15 will remain on strike, said Shawn Fain. These three sites – a General Motors plant in Wentzville, Missouri, a Stellantis plant in Toledo, Ohio, and a Ford plant in Wayne, Michigan – employ some 12,700 UAW members.

General Motors, which has 18 additional plants affected, accused UAW leaders of “manipulating the bargaining process for their own benefit.” Same accusation from Stellantis who “wonders if they ever intended to find an agreement in time”.

What economic impact?

At this stage, the economic impact has been limited, with the union choosing to limit the scope of the work stoppages so as not to block all production.

But the extension of the movement at Stellantis and GM risks having greater repercussions, because these centers supply garages and dealers with spare parts for vehicles already sold, therefore directly affecting the general public.

And “they generate significant profits, particularly for Stellantis,” noted Shawn Fain on CNBC, adding that the union was considering “many possible actions” for the future.

The strikers each receive $500 per week from the union welfare fund instead of their usual salary.