The United Auto Workers union and the three Detroit automakers have less than two weeks to negotiate a new labor contract, and a strike of some sort seems increasingly likely.<\/p>\n
The union\u2019s president, Shawn Fain, has primed rank-and-file members to be prepared to walk off the job if the union\u2019s long list of demands for improved wages and benefits are not met.<\/p>\n
A strike against one of the companies, especially a prolonged stoppage, could send an economic jolt through several Midwestern states and crimp the profits of General Motors, Ford Motor or Stellantis. G.M. workers walked out for 40 days in 2019 before reaching an agreement.<\/p>\n
A strike against all three \u2014 a step the union has never taken but one Mr. Fain has said he is willing to call for this year \u2014 could have a noticeable impact on the broader U.S. economy.<\/p>\n
\u201cIf that happens, even a short strike would impact economies throughout Michigan and across the nation,\u201d said Patrick Anderson, the chief executive of the Anderson Economic Group in East Lansing, Mich.<\/p>\n
The talks are playing out as automakers are spending tens of billions of dollars to transition to electric vehicles, which require fewer workers to assemble than traditional gasoline-powered cars and trucks. The terms of the new contract will determine how both autoworkers and the companies fare in an E.V.-centric industry.<\/p>\n
At the same time, significant wage and benefit gains could provide a tailwind for a union movement that has been gaining strength across several industries.<\/p>\n
There are political stakes as well. President Biden has declared that \u201cthe U.A.W. deserves a contract that sustains the middle class\u201d and has named a White House liaison to the union and the automakers. But the U.A.W. has withheld an endorsement of his re-election bid so far, partly because of concern over the union\u2019s share of E.V.-related jobs created with federal subsidies.<\/p>\n
An agreement before the contracts expire on Sept. 14 is still possible, and talks could continue beyond that date without a walkout. But Mr. Fain has repeatedly said he views Sept. 14 as a deadline \u2014 the day a strike could begin. He was elected to the U.A.W. presidency last year as an insurgent, ousting the incumbent on a vow to take a more combative and confrontational approach in the talks than his recent predecessors.<\/p>\n
\u201cPresident Fain has declared war, and that usually means there\u2019s going to be a battle, and that battle would be a strike,\u201d said Sam Fiorani, the vice president of global vehicle forecasting at Auto Forecast Solutions, a market researcher. \u201cThe U.A.W. leadership is in a position now where they have to prove to the members that they are fighting for them, so it\u2019s pretty unlikely there won\u2019t be a strike.\u201d<\/p>\n
The auto industry as a whole, including foreign-owned companies with operations in the United States, makes up about 3 percent of the country\u2019s gross domestic product. A 10-day strike against the three Detroit automakers would result in total wage losses of $859 million and manufacturers\u2019 losses of $989 million, according to estimates by Mr. Anderson\u2019s firm.<\/p>\n
In August, Mr. Fain sent each company a list of demands, including higher wages, improved benefits, a resumption of regular cost-of-living wage bumps to ward off the impact of inflation and an end to a wage structure that leaves newer hires making a third less than veteran workers. Mr. Fain suggested as much as a 40 percent wage increase, noting that the chief executives of each of the companies had their compensation packages rise substantially in the last four years.<\/p>\n
He also called for contract provisions that would require the automakers to pay workers to do community service if their plant closes, describing it as a way to deter the companies from shuttering factories and to protect towns and local economies from being ravaged by the loss of a major employer.<\/p>\n
\u201cThe manufacturers can absolutely afford some of those demands, but the more they get, the less competitive the companies are going to be,\u201d Mr. Fiorani said.<\/p>\n
In a video message streamed on Facebook on Thursday, however, Mr. Fain said the union and the automakers remained far apart. Ford, he said, offered wage increases and other provisions that were \u201cinsulting\u201d to the U.A.W.<\/p>\n
In a statement, Ford said it had offered a 9 percent wage increase and one-time lump-sum payments that, combined, would increase a worker\u2019s income by 15 percent over the four-year contract. Mr. Fain said lump-sum payments helped but did not improve a worker\u2019s income over a long period.<\/p>\n
The U.A.W. and Ford are also at odds over profit-sharing bonuses, the use of temporary workers, cost-of-living wage increases, retiree health care and several other matters.<\/p>\n
Mr. Fain said that G.M. and Stellantis had not provided counteroffers to the union\u2019s proposals, and that the U.A.W. had filed a complaint with the National Labor Relations Board contending that the two companies were not negotiating in good faith.<\/p>\n
\u201cI know this update is infuriating, and believe me when I say I\u2019m fed up,\u201d he said. \u201cOur goal is not to strike. Our goal is to bargain a fair contract, but if we have to strike to win economic and social justice, we will.\u201d<\/p>\n
G.M. said it was \u201csurprised by and strongly refutes\u201d the charges in the N.L.R.B. complaint. \u201cWe have been hyper-focused on negotiating directly and in good faith with the U.A.W. and are making progress,\u201d Gerald Johnson, G.M.\u2019s vice president of global manufacturing, said in a statement.<\/p>\n
Stellantis was \u201cdisappointed to learn that Mr. Fain is more focused on filing frivolous legal charges than on actual bargaining,\u201d the company said in a statement. \u201cWe will vigorously defend this charge when the time comes, but right now, we are more focused on continuing to bargain in good faith for a new agreement.\u201d<\/p>\n
In recent weeks, workers have organized several dozen rallies and other gatherings to prepare for picketing. \u201cI think the membership is energized,\u201d said Christine Bostic, a battery tester at a G.M. electric vehicle plant in Detroit. \u201cThe facts are on our side. If it comes to a strike, I\u2019m ready for that.\u201d<\/p>\n
To soften the impact of a stoppage, the union has amassed a strike fund of $825 million. It plans to pay striking workers $500 a week and cover their health insurance premiums while they are out of work.<\/p>\n
In recent days, Mr. Fain has joined the union\u2019s negotiating teams in their talks with each of the automakers, an unusual step. Normally, the U.A.W. president does not take a direct role until the final days or hours of negotiations.<\/p>\n
On Wednesday, he took part in discussions with Stellantis, where tensions between the two sides have been high. When Stellantis responded to Mr. Fain\u2019s demands with a list of cost concessions it wanted from the union, Mr. Fain took to Facebook to denounce them, dropping the document into a wastebasket.<\/p>\n
Decades ago, when the U.A.W. had more than a million members and the Big Three \u2014 G.M., Ford and Chrysler, now part of Stellantis \u2014 had almost no foreign competition, a strike by the union could shut down a significant portion of the United States economy.<\/p>\n
Today, the union is much smaller. G.M., Ford and Stellantis employ about 150,000 U.A.W. workers, and those companies make only a little more than 40 percent of the cars and trucks sold in the U.S. market.<\/p>\n
But the union entered this year\u2019s talks in a much stronger negotiating position than it had in years. In the past, the Detroit companies were struggling badly against foreign rivals that operate nonunion plants in the South, like Toyota and Honda, and had a significant cost advantage. In most of the last several contracts, G.M., Ford and Stellantis had to get concessions on wages and benefits to survive.<\/p>\n
Over the last 10 years, however, all three companies have rung up record profits, thanks in part to the concessions they won from the union as well as the shift in consumer preferences to high-margin trucks and large sport utility vehicles.<\/p>\n
In the first half of this year, Ford made $3.7 billion and G.M. made $5 billion. Stellantis reported profits of 11 billion euros (about $11.9 billion).<\/p>\n
In the past, the U.A.W. has chosen one company \u2014 it was G.M. four years ago \u2014 as the \u201ctarget\u201d to focus on in the talks. Mr. Fain has said the union could target all three companies this time around, but many analysts think the union will eventually choose Stellantis. In addition to the strains between the company and the union, their talks involve a plant in Belvidere, Ill., that Stellantis has idled and that the union wants the company to reopen.<\/p>\n
Getting Stellantis to reopen the plant is a critical task for Mr. Fain. Four years ago, G.M. closed a plant in Ohio and the U.A.W. failed in its efforts to push the company to reopen it. In his campaign for the presidency, Mr. Fain promised members that his tougher approach would prove successful this time.<\/p>\n
The union could get a hand in this battle from the federal government. On Thursday, the Energy Department said it had made $2 billion in grants and $10 billion in loans available to auto companies to convert existing factories that build gasoline-powered cars and trucks into plants that produce hybrid and electric vehicles.<\/p>\n
Stellantis, like G.M. and Ford, aims to introduce several more electric models over the next few years and will probably have to retool some plants to make them. It is already building a battery plant in Indiana for its E.V. push.<\/p>\n
Mr. Fiorani suggested that Stellantis could decide to overhaul the Belvidere plant to make electric models. \u201cStellantis could find a product to go in there,\u201d he said. \u201cFor the U.A.W. to truly win something, though, it has to be electric vehicles that Stellantis would plan on making for several years.\u201d<\/p>\n