The countdown is coming to an end: unless a last minute agreement is reached, the powerful UAW union is preparing to launch a strike on Thursday among the three major American automobile manufacturers, which could destabilize the sector and beyond.
In two months of negotiations, representatives of the United Auto Workers and the leaders of the “Big Three”, General Motors, Ford and Stellantis, which controls the American Chrysler, were unable to agree on the content of a new four-year collective agreement.
“We have told businesses from the beginning that September 14 (at midnight) is a deadline, not a milestone,” UAW President Shawn Fain said in a YouTube statement Wednesday.
“We will not let the “Big Three” continue to drag out discussions for months,” he insisted.
The UAW is demanding an increase in wages of 36% over 4 years, while the three American manufacturers have not gone further than 20% (Ford), according to the union leader.
The three historic giants of Detroit notably also refused to grant additional days of leave and to increase pensions, provided by funds specific to each company.
“They want to scare Americans by making them believe that the problem comes from automobile employees,” proclaimed Shawn Fain, while he blames “the greed of the leaders.”
Unless compromised at the last minute, the union plans to announce on Thursday which sites will be affected by work stoppages, with the majority of employees remaining on the job.
A risk for Biden
For Shawn Fain, the movement constitutes a turning point, which he compares to the 1930s, notably the strike of 1936 and 1937 at General Motors in Flint (Michigan), the true birth of the UAW, created in 1935.
On Wednesday evening, Ford’s general manager, Jim Farley, said he had not received from the union “a real counter-proposal” to the latest concessions offered by the manufacturer.
The consulting firm Anderson Economic Group (AEG) estimates that a ten-day strike could represent more than five billion dollars in lost revenue for the American economy.
A prolonged social conflict could have political consequences for US President Joe Biden, whose economic record is criticized, in particular due to the stubborn inflation which has taken hold in the United States.
A little over a year before the presidential election, the head of state is walking on eggshells, between his stated support for the unions and the specter of a blow to the American economy by a strike.
On Wednesday, White House Council of Economic Advisers Chairman Jared Bernstein declined to state Joe Biden’s position on a possible work stoppage.
“He believes autoworkers deserve a collective agreement that supports middle-class jobs and wants the parties to remain at the negotiating table without interruption to reach an agreement,” Jared Bernstein said.
“Consumers and dealers are, in general, relatively protected from the effects of a short strike,” explained AEG vice president Tyler Theile.
But with inventories a fifth of what the industry had in 2019, during the last GM strike, they “could be hit much more quickly” than four years ago, he said.
“We are arriving at the fourth quarter, a period during which we see the most sales of pick-ups and large SUVs, which are very profitable for these three manufacturers,” recalls Jessica Caldwell, of the specialized site Edmunds.com.
“If they don’t have enough in stock, they’re going to miss out on sales,” she adds.
JPMorgan analysts estimate that a sharp increase in wages would have an impact on vehicle sales prices, pushing motorists to “keep their car longer” rather than buy a new model.