The United Auto Workers Strike

High Risks, Potential Value, and Important Issues Galore

A Little Long-Term History

This is as big a labor action as this country has seen in a very long time, with big stakes all around. The history of the UAW and auto strikes is, it seems to me, a mixed one. On the one hand, they led the way on much labor reform and empowerment. They helped at an important level to create much of the American middle class, based on good jobs for skilled employees.

They also can be said to have pushed too hard in some cases, becoming part of the problem of American cars being too expensive. During some of these same years, performance standards at work slipped, and American cars were considered poorly made and unreliable.

Combine high prices and poor quality and you welcome foreign competition. First the Japanese, then the Koreans, and all along at smaller numbers, the Europeans. The fault for all this is shared by US auto management for sure, but the unions own some of it as well.

I still remember the first time I bought a Japanese car. I hesitated, felt guilty. In the end, I decided this was the power of the market to work. I had no better way to tell the US auto industry what I thought than buying a competitor. Besides, the “US” car I was considering turned out to made mostly in Canada! It has been a long road back for US autos; the workers have done their part to get back on track.

More Recent Decisive Factors

In recent years, the country has been through two terrible recessions and a pandemic. Industry and the economy took a beating. Auto workers gave up a lot – a lot- to keep those industries and their jobs alive.

The expectation was that when things got better, so too would employment conditions. Worker gave up income, benefits, job security – something in about every component of employment contracts. So far, they have seen precious little coming back their way.

The Competition Factor

 The auto companies and labor both need to have an eye on their competition during this disruption on two fronts. One, if production starts falling and deliveries lagging, people looking for new cars will shop elsewhere.

Two, depending on how all this settles out, the American auto industry could lose progress on moving to electric vehicles. More on this later, but for now keep in mind that would be a major setback for the industry, our economy, and the environment. Everyone else in Europe and Asia is moving out smartly on this front. Tesla is doing quite well Shame on us if we falter as a country.

 The German Model

I have always been envious of the German auto industry -labor model. In brief, it is a much more integrated approach. Union leaders have voting seats on company boards and can generally be said to take a longer range view of what is best for their job sector. Company health has value to them.

It is such a better system. I am delighted to see unionization on a much needed surge in this country, but I also would welcome unions more explicitly looking for ways to be partners as well as protectors. We need both.

 The Politics of It All

 The politics are, of course, fascinating in all this, especially with the 2024 election starting to warm up. If the strikes end well overall, the Democrats will benefit. If it does not go well, the Republicans will blame Biden and his administration with a lack of influence over unions, for pushing too hard for electric vehicles, you name it.

There is little doubt that a long term strike will hurt everyone, including the economy. Keep your fingers crossed for a shorter run. It is also possible that one or two of the big three might settle soon and one may not. That would have all sorts of interesting implications.

For some time, I have been irritated with the UAW for not endorsing Biden. The choice for which candidate and which party would be better for the country is obvious. But now with this strike going on, I can see a rationale to hold off endorsements that make sense for the union and, interestingly, for Biden.

For the union, I can see holding off to maximize Biden’s support for workers (which they are getting anyway), perhaps giving them some leverage down the road on other issues. For Biden, the fact that he has spoken so strongly for labor yet does not have their endorsement makes his stance a moral and history based one, not a payback for an early endorsement. In the end, I would be amazed if the UAW did not endorse Biden, but for now a little distance works for them all.

The government should get some leverage out of the fact that the auto industry was literally on death’s doorstep with the Bush recession, when the Obama administration rescued them (only Ford did not take USG loans). Saving them was the right thing to do, and the US made a nice sum on the interest from those loans, but bottom line the taxpayers saved their butt and they owe us some appreciation in the form of quick and just labor settlements.

 Where the UAW Has It Right

The UAW is precisely right in saying they gave up a lot to keep the industry afloat and have little to show for it. They are also right to highlight that the economy is doing great, the auto industry is having a great financial run, and that executives have gotten raises somewhere between unreal and obscene, with nothing like that going to workers.

This is also the right time and the right industry to boost the shorter work week. At one time Americans (of course) thought of a “shorter work week” being four 10 hour days – one works the same number of hours just within fewer days. That model is gone. Now the push is for a genuinely shorter work week.fo four 8 hour days – 32 hours. A number of companies have already tried this, including a very large and well tracked effort in the UK.

The results have been consistently spectacular. Companies who have done this have almost uniformly said they would never go back to the old system. This new approach challenged workers to be more efficient in return for more free time. Consistently, companies have reported greater productivity, less absenteeism, higher morale, less turnover, and more. Would be great to see the auto industry embrace this.

A word of warning on what the UAW has right. While both very substantial pay raises and shorter hours make great sense, I have to wonder how much change in how many components industry can absorb. Going to a 32 hour week AND a 40% pay raise is likely not doable on any short timeline. Ah, but that is what negotiations are about, and rumors are some talks are getting to be engaging. We will see soon enough

 Where the UAW is Fighting the Inevitable

Job security is an issue. Giving workers some input and some protections on things like plant closing seems not unreasonable. But fighting job losses because of the fleet conversion to electric vehicles is a lost cause and should be. The country and the planet need to move to electric (or hydrogen, or….) as quickly as possible.

Rather than fight the conversion, let’s push for more manufacturing of electric vehicle components, including batteries, in the USA and convert traditional auto jobs to these new enterprises. Slowing down the conversion should be unacceptable, period. It’s the auto equivalent of the Hollywood strikes trying to eliminate AI In their industry- a failure almost for sure.

Likely Outcomes?

I am betting there are enough smart people engaged in this to get a settlement in the short to mid-range time frame that gives workers much of what they seek. But I surely could be wrong. We now have a generation of union and corporate leaders who have never been through a fight this big. We will have to see how it comes out.

I have seen some smart early tactics and strategy from labor that gives me hope, but in truth there are too many variables out there to call it yet. Its also possible that Biden and some other key figures could rap everyone on the knuckles and try to close a deal. We all have a stake in this one. Hope it goes well enough.

See You Next Week

We have been dealing with easy stuff – war, politics, technology, etc. Next week a much easier topic – Age in Politics. What could possibly go wrong with that topic? Now, if I just remember the topic, my typing fingers work, my vision clear enough…..

     Bill Clontz

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