In this sixth Supply Chain Matters weekly reader update, we highlight the latest developments and ongoing implications related to United Auto Workers labor strike involving the big three U.S. auto companies.

As this strike action approaches its sixth week, the consequences of the disruption across Ford Motor, General Motors and Stellantis production and supply networks continue to grow monetarily and operationally.

At the same time, tensions are wearing thin among the parties involved.

Latest Developments

Published reports indicate that progress on contract offers has been made involving General Motors and Stellantis, essentially matching Ford Motor’s offer a reported 23 percent wage hike for workers over the life of a new four year labor contract.

General Motors specifically indicated that that company’s latest offer would provide most UAW workers with a $40.39 per hour wage, and when combined with cost-of-living increases, would equate to the 30 percent minimum wage hike that the labor union is seeking. GM executives further indicated a desire to finish the negotiations.

Bloomberg indicated in its reporting that the UAW is seeking a 25 percent base wage increase along with improved retirement benefits, job security measures and a recognition that the labor contract would apply to future battery plant workers.

Yesterday, in a regularly scheduled livestreamed update, UAW President Shawn Fein communicated to union workers that there is more to be won. Reportedly, the union leader was responding to calls from some union workers to place a labor agreement into a vote.

He specifically noted: “We’ve got cards left to play and they’ve got money left to spend.” The union leader told the membership to be ready to strike additional facilities in order to press senior auto executives for some final gains. However, no specific added strike actions were noted as of yesterday.


Ongoing Implications

Ford Motor Executive Chairperson Bill Ford addressed the ongoing labor dispute in an address earlier this week, and urged labor union members to come together in reaching an agreement with Ford. He specifically indicated in his remarks that Honda, Toyota, and Tesla and other makers, each with U.S. facilities in right-to-work states, are loving this strike because the longer it extends, the better it is for each of them. “America’s entire auto industry is at-risk if the ongoing labor disruption is prolonged.”

UAW President Shawn Fein specifically responded to these remarks threatening to close the Ford Rouge production facility, and specifically indicating: “It’s not the UAW and Ford against foreign auto makers. It’s autoworkers everywhere against corporate greed.” He additionally stated: “Workers at Tesla, Toyota, Honda and others are not the enemy- they’re the UAW members of the future.

From our lens, that latter statement adds further clarity to the labor union’s broader goals in these negotiations.

Cascading Effects

As expected, the cascading effects across the industry’s various production and supply networks continue with each passing day.

In its reporting, The Wall Street Journal cited a research note by Deutsche Bank indicating the monetary implications for the three targeted U.S. automakers is estimated to now be an estimated $1.1 billion in operating profits. The work stoppages are reportedly causing lost production of upwards of 43,000 vehicles per week.

There are now a reported 34,000 UAW workers walking picket lines.  Other reports point to an estimated additional 6,000 workers impacted by layoffs or furloughs among industry supply networks because of limited work, with smaller specialty suppliers especially being impacted economically.


Added Thoughts

Beyond the bluster and the rhetoric, it would seem that overall progress was made this week in the simultaneous three-phase labor negotiations. While it appears that the UAW’s stance has turned to seeking out added concessions or worker benefits, all three of the U.S. auto makers are publicly indicating that gaps in bargaining are narrowing.

From our lens, Ford Executive Chair Bill Ford’s observations, specifically that the automakers and the union need to bring an end to an acrimonious round of talks are meaningful at this juncture.

While it would seem that the UAW has aspirations for unionizing all U.S. based auto workers across multiple global brands, or being a force in the manifestation of the industry’s transformation to EV or hybrid powered vehicles, that is likely a broad reach at this juncture, given the broad business and political implications.

In our second update relative to this disruption, we noted highlights of this Editor’s conversation with Professor Davod Jacobs from American University’s Kogod School of Business, a labor relations focused observer.  Regarding the UAW and the history of these three automakers, Jacobs observed that the dislocation impacts of the prior global wide recession of 2018/2019, and the Covid-19 pandemic forced both sides a sense of possibilities and realization that the ways of getting work done were not fixed, a sense of new possibilities in managing work. Jacobs viewed the opportunities provided in these current negotiations as a sense of “attitudinal restructuring” or possibilities to ease workers further into the industry’s ongoing transition to the EV era and what that implies in changed skills, job roles and in worker needs. He equated labor negotiations to the opportunity for shaping and reshaping of attitudes that may be related to trust, distrust, friendliness or hostility between labor and management.

Such observations have overall meaning at this juncture.


Bob Ferrari

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