Autoworkers strike will have ripple effects for consumers and other workers

UAW members want car companies to raise wages by 40% and reduce the differences between what new and experienced workers are paid.

By Shelly BrisbinSeptember 18, 2023 2:17 pm,

A United Auto Workers strike is in its fourth day, with walkouts underway at plants owned by Ford, General Motors and Stellantis – formerly known as Chrysler. Some 13,000 workers at three midwest auto plants walked off the job on Friday. 

The UAW says automakers should share more of their record profits with workers, while the companies say they need to manage labor costs to stay competitive with non-unionized rivals.

As the two sides dig in, more auto plants and suppliers will feel the strike’s ripple effects this week, says Micheline Maynard, who writes about the automotive industry for her newsletter, “Intersection: Everything That Moves.” Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: Now let’s talk about the reasons for this strike. Is this primarily about higher wages for union workers? What are they asking for specifically?

Micheline Manynard: It’s definitely is about higher wages. The UAW is looking for a 40% increase in wages. And one of the things to understand is that while veteran workers make about $32 an hour, the newly hired workers only make about $17 an hour. 

I was reading a testimony from a worker today that said that she has to have a second job at the dollar store because she just can’t make it on $17, after all the taxes are deducted.

They’re also talking about a shorter work week?

They’d like to have a shorter work week. There’s been some talk of a four-day work week, but I’m not sure that the carmakers can adjust to that. That might be just too big of an ask for this time.

So this is what’s called a targeted strike. Just three plants – 9% of the unionized workforce involved. What’s the bigger tactic, do you think?

Well, I think the bigger tactic will be that they’ll move the strike around. So the Arlington, Texas, plant is probably a place that should be counting on hearing from the UAW, maybe sooner rather than later. They’re picking plants that make the most important vehicles, and the most important vehicles to the big companies are their pickups and sport utility vehicles.

Arlington, Texas – yeah, that’s ground zero for a lot of those big SUVs that roll out from General Motors. It’s not just the plants where workers are striking that are affected. I mean, we’re talking about the impact on facilities and tons of suppliers now.

Absolutely. And so you have to remember that some of these factories make parts for other factories.

So the plant in St. Louis that is on strike makes parts for a plant in Fairfax, Kansas. And so that plant will probably go down because they don’t have the parts coming from Wentzville, Missouri. So there’ll be a ripple effect not only from the outside suppliers, but within the networks of the car companies.

You spent some time at the Wayne, Michigan, Ford plant where workers are striking. What was the vibe? What was the mood? What were you hearing?

I was there on Friday and of course, the first day everybody’s kind of fired up and ready to walk the picket line. But what I was hearing from them is that they’re very concerned about this whole issue of what they call tiers, and that’s the people that were newly hired and they make so much less.

And I was talking to workers with 29 years seniority and 18 years seniority, and they said, “you know, it’s just not fair for us to get paid more than people working right next to us that are doing the same job.” And so even the older workers are looking out for the younger workers in this.

I’m not a learned economist or anything, but I remember what happened the last time there was a shortage of vehicles. That was during the pandemic, and we saw prices skyrocket. In fact, there are stories of 2021, 2022 [cars] still sitting on lots built during that period and they can’t be sold. They’re so expensive. What’s this all going to mean for the consumer, do you think?

Well, the average price of a vehicle is now over $48,000, which is just kind of breathtaking. I think prices probably will go up if vehicles are in short supply.

That said, when they went into the strike, General Motors, Ford and Stellantis – which used to be Chrysler – all had some pretty decent inventory numbers. So it won’t be hurt by dealers probably for another month or so. And hopefully they can settle this within a month. But if it does drag on, there could be some shortages of vehicles and then prices will definitely go up.

I have to ask, because you seem fairly optimistic about a month, is there a chance that this could really be settled that soon? And we were talking about this strike coming at a momentous time for U.S. automakers as they make a transition to EVs, and a lot of them are struggling to try and make ends meet.

One thing that’s different about this strike is that the Biden administration is really getting involved in this. I have never seen a situation where a U.S. president… He sent a couple of his advisers to oversee the negotiations. So if you’ve got people in Washington looking over your shoulder, I think the likelihood of a settlement is probably greater than if Washington kept kind of a hands-off attitude towards this.

Can you give us a sense of just how vulnerable Texas is economically to this? I mean, we’ve talked about that plant in Arlington that General Motors has to build the biggest of their SUVs. Where else might Texas be vulnerable here?

Well, you have to remember that parts come up from Mexico. And so there’s that pipeline coming up from Mexico to Texas. There are vehicles going out from Texas to the rest of the nation. And so I would definitely keep an eye on the Arlington plant.

One thing I would tell people to watch for – the car companies have these big yards next to the plants where they put vehicles that are waiting to be shipped. When I drove by the Ford plant up here, that lot was empty. I have a feeling they got those vehicles out of there in anticipation of strike.

So keep an eye on those big lots next to Arlington and see what happens with all that inventory.

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