It’s finally over. For over six weeks, the United Auto Workers (UAW), which represents nearly 150,000 auto workers, conducted targeted strikes at certain factories and warehouses around the country run by the “Big Three” automakers: Ford, GM, and Stellantis NV (formerly Chrysler). The UAW has struck deals with all three companies to put an end to this unprecedented strike, and the publicly reported terms of the agreements are extremely favorable to the union.
As we wrote in previous posts here and here, when contract talks began in July, the UAW initially sought aggressive 40% pay increases over four years and a 32-hour work week, citing inflation and record company profits as justification. When the Big Three did not meet those and other demands at the bargaining table, the UAW conducted strategic partial strikes of certain locations of all three automakers at the same time in an effort to impose maximum pressure on the three companies. Past UAW strikes had targeted just one automaker at a time with all of that automaker’s plants being struck at once. As a result of the strike, the companies have seen combined losses of about $2.9 billion, according to Bloomberg Law.
What’s the Deal?
Most notably, the settlements includes a 25% wage increase through April 2028 and restoration of cost-of-living allowances that had been lost in past contract negotiations. At GM plants, for example, the UAW stated that the wage increases will cumulatively raise the top wage by 33% compounded with estimated cost of living adjustments to over $42 an hour, and the starting wage will increase by 70% compounded with estimated cost of living adjustments, to over $30 an hour.
Although the UAW did not achieve one of its goals of a return to defined-benefit pensions, the agreement does require the Big Three to boost contributions to 401(k) retirement savings plans, a much more palatable option for the companies.
The settlements also addressed the UAW’s concern about the rise of electric vehicles and its impact on the UAW and its workers. Electric vehicles require substantially less labor – and therefore, less employees – than traditional internal combustion engines. The union did not get the companies to agree to allowing the UAW to organize all of the $28 billion worth of battery plants the automakers are building in the U.S., but it did win transfer rights for UAW-represented workers into some plants. Further, the companies agreed to provide various pathways for future electric vehicles workers to come under the UAW umbrella.
While the costs of the agreement are expected to cut into the Big Three automakers’ profit margins, Ford says it expects to find efficiencies to offset the higher labor costs. GM and Stellantis will likely do the same, thereby softening the blow that the agreement might have otherwise had on the companies.
Bottom Line
The UAW’s aggressiveness reflects a spike in labor activism, as American workers, spurred by tight labor markets and impacted by inflation, press for better pay and benefits. Before the deals were struck, the UAW had already indicated its intention to use what it hoped would be a good contract settlement with the Big Three to try to organize workers at other, non-union automakers. With such these contract settlements, it would not be surprising to see organizing efforts at non-union automakers, like Tesla and Toyota, ramp up.
We will discuss the UAW and Big Three automakers agreements and other significant labor law developments at our Breakfast Briefing Labor Law Year in Review: What you Missed and What’s Coming Next on December 14, 2023 at the Sheraton Springfield. To Register: Send an email with your name and company name to Seminars@Skoler-Abbott.com. You can pay by credit card by clicking here. If you prefer to pay by check, please indicate that in the registration email.