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The Big three in the United States are at risk of strike!

2024-03-03 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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The United Auto Workers Union (United Automobile Workers) recently held contract negotiations with the three major US automakers-General Motors, Ford Motor and Stellantis Group-to seek big pay increases and other benefits, CCTV reported. If unions and car companies fail to reach a new labor agreement, these workers may go on strike after their existing contracts expire.


According to the data, UAW is one of the largest workers' associations in the United States, with 146000 members in GM, Ford and Stellantis groups, accounting for about 56 percent of the total number of workers in the US automobile industry. It is understood that the contracts of UAW workers are re-signed with the three major vehicle factories in North America every four years, and the last labor negotiation was in September 2019, but the negotiators initially failed to reach an agreement. The UAW leader's 40-day general strike against GM brought GM a loss of more than $3.6 billion in profits.

In the past two years, persistently high inflation in the United States has brought tremendous pressure on the working class. Data show that between September 2022 and August 2023, there were 70 strikes involving more than 100 people and lasting more than a week, an increase of 40 per cent over the previous year.

In July this year, a new round of labor contract negotiations began, but the negotiations between UAW workers and the three major vehicle factories in North America are also not smooth. If the two sides fail to reach an agreement on the latest labor agreement, then UAW workers may trigger a new round of strike, which will also bring high losses to the whole car factory. It is reported that up to 97% of workers have agreed to authorize a strike.


It is understood that the starting salary of UAW workers is about 18 US dollars per hour, and the maximum wage for workers who have reached a certain length of service is about 32 US dollars per hour. Earlier this year, Fane, chairman of UAW, presented a list of requests to each carmaker, including salary increases of more than 40 per cent and defined benefit pensions. If American automakers agree to all the demands of UAW, it will increase by $45 billion to $80 billion a year, so in the four-year agreement, American automakers reject most of the requirements, but if they refuse all of them, it will also trigger a new round of strikes and face huge losses. However, the strike does not mean the purpose of the new labor agreement negotiations, the action is only to force Detroit automakers to compromise on wages, if it seems that Ford, GM and Stellantis will have to pay more anyway, it is just a matter of more or less.

According to a Morgan Stanley survey, 96 per cent of workers expect the strike to last more than a week and 34 per cent expect the strike to last more than a month. According to the analysis of the Anderson Economic Group (AEG), the strike of nearly 150000 UAW members will cause economic losses of up to 5.6 billion US dollars in 10 days.

In addition to causing huge economic losses, the workers' strike will also cause a big blow to the automobile development in the United States, and even affect the global automobile industry. Ford, General Motors and Stellantis Group are American auto companies in Detroit, which have a high market position in the global automobile market. if the vehicle factory goes on strike and shuts down production for a long time, the relevant parts companies will also face the risk of no demand and associated shutdown.


It is understood that in the first half of the year, Ford, General Motors, and Stellantis made profits of US $3.7 billion, US $5 billion, and US $119,119 respectively. The huge profit performance is the main reason why UAW workers are asking for higher wages, but the three major car companies all think that the request is not realistic, because the US automobile industry is in the throes of electric vehicle transformation and is facing increasingly fierce market competition and high costs. Based on this, there are still big differences in the negotiations between car companies and UAW, which will also increase the possibility of strike.


On August 25th, the United Auto Workers (UAW) announced the result of the strike authorization vote. Ultium, a new energy battery company that is a joint venture between GM and LG New Energy (LG Energy Solution), has agreed to raise wages at its Ohio battery plant by an average of 25 per cent after negotiations with the United Auto Workers (UAW), the announcement said.

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