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The United Auto Workers\u2019 strike<\/a> against General Motors, Ford and Stellantis is well into its fourth day, with no deal in sight. The strike comes as all three automakers have made aggressive moves to retool existing factories to build electric vehicles. Delays could set back production and delivery of current and future EV models, while also raising prices for consumers.<\/p>\n Nearly 13,000 workers began picketing Friday at midnight after a deal wasn\u2019t reached by the UAW\u2019s deadline. UAW president Shawn Fain on Monday evening set a new deadline for September 22.<\/p>\n The UAW isn\u2019t striking all of its 150,000 members at once. In a tactic Fain is calling a \u201cstand up strike,\u201d the union is targeting specific factories at a time. The first were GM\u2019s truck and van plant in Wentzville, Missouri; Ford\u2019s Ranger pickup and Bronco SUV plant in Wayne, Michigan; and Stellantis\u2019 Jeep Wrangler and Gladiator plant in Toledo, Ohio.<\/p>\n On Monday, Unifor, the union that represents autoworkers in Canada, also said it would strike against Ford at midnight if a deal isn\u2019t reached. The strike in Canada could affect Ford operations at some of its U.S. plants.<\/p>\n At the center of the fight is the shift to electric vehicles. EVs require fewer parts, and thus fewer workers to assemble vehicles, so union members are fighting to secure their livelihoods in addition to better working conditions. Traditional OEMs are pumping money into electrifying their production lines and are anxious to keep costs down so they don\u2019t lose market share to Tesla. Tesla is already producing EVs profitably via its non-unionized workforce.<\/p>\n \u201cLet\u2019s be clear: this is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success,\u201d wrote Dan Ives, an analyst at Wedbush Securities. \u201cIn this crucial period of EV execution, model roll-outs, distribution, marketing, with EV competition rising across the board, the timing could not be worse.\u201d<\/p>\n Analysts say a lengthy strike would delay production and rollout of new electric vehicles. One the lasts more than four weeks would see production timelines and EV roadmaps pushed out to 2024, with many more delays on the horizon for GM, Ford and Stellantis, according to Ives. This, of course, would be a boon for Tesla in the near term as consumer demand for EVs continues.<\/p>\n Ford, Stellantis and GM are already struggling to get their EVs to market. Ford in February was forced to suspend production of its electric F-150 Lightning pickup after a battery caught fire in one of the vehicles parked near the factory for a quality check. The company also previously reported a 2.8% drop in EV sales in the second quarter after pausing production at the Mexico factory that assembles the Mustang Mach e. Stellantis doesn\u2019t intend to begin selling fully electric vehicles in the U.S. until 2025. And GM\u2019s new battery factory in Ohio has been slow to produce batteries, which has delayed electric versions of the Chevrolet Silverado and other vehicles.<\/p>\n The UAW\u2019s key demands are a 36% hourly pay increase, a reduced 32-hour work week, a shift back to traditional pensions, the elimination of compensation tiers and the restoration of cost-of-living adjustments.<\/p>\n If, after negotiations, some of the UAW\u2019s major proposals are granted, it would end up costing the OEMs billions of dollars in incremental annual costs. Ives said these costs will ultimately fall on the end consumer as it would cause the increase of EV prices rolling out over the next 12 to 18 months.<\/p>\n Some analysts don\u2019t buy the idea that meeting union demands would put the three automakers in such dire straights.<\/p>\n \u201cIf you look at the breakdown at what it costs to build an E.V., labor is a very small part of the equation. Batteries are the most,\u201d Madeline Janis, executive director of advocacy group Jobs to Move America, told The New York Times<\/a>. \u201cThis idea that the UAW is going to price Ford, G.M. and Stellantis out of the market is not true.\u201d<\/p>\n \u201cUnion demands would force Ford to scrap its investments in electric vehicles,\u201d said Jim Farley, Ford\u2019s CEO. \u201cWe want to actually have a conversation about a sustainable future. Not one that forces us to choose between going out of business and rewarding our workers.\u201d<\/p>\n Ford said that if the union got everything it wants, its workers\u2019 total compensation would be twice as much as Tesla\u2019s employees. It would also be higher than the labor costs of Toyota and other foreign-owned automakers in the U.S. that use non-union labor.<\/p>\n \u201cFirst off, labor costs are about 5% of the cost of the vehicle. They could double our wages and not raise the price of the vehicles and still make billions in profits. It\u2019s a choice,\u201d countered Fain in a CBS interview<\/a> over the weekend. \u201cAnd the fact that they want to compare it to how pitiful Tesla pays their workers and other companies pay their workers. That\u2019s what this whole argument\u2019s about. Workers in this country got to decide if they want a better life for themselves, instead of scraping to get by paycheck to paycheck, while everybody else walks away with the loot.\u201d<\/p>\n Ford reported in July<\/a> that its EV business would lose $4.5 billion this year. But even with that projected loss, Ford raised its full-year guidance for 2023 to between $11 billion and $12 billion in adjusted earnings, up from between $9 billion and $11 billion.<\/p>\n Speaking to CBS Mornings late last week, GM\u2019s CEO Mary Barra said an excessive pay rise would hinder the automaker\u2019s ability to continue producing vehicles with combustion engines while also developing EVs.<\/p>\n \u201cThis is a critical juncture where investing is very important,\u201d she said.<\/p>\n Unions aren\u2019t likely to be swayed by auto executives\u2019 arguments against giving workers radical pay rises. It\u2019s the large pay gaps between those very executives and their workers that are rallying union members to the cause.<\/p>\n \u201cWe\u2019ve asked for 40% pay increases and the reason we asked for 40% pay increases is because in the last four years alone, the CEO pay went up 40%. They\u2019re already millionaires,\u201d said Fain during an interview with CBS.<\/p>\n Barra\u2019s $29 million pay package in 2022 was about 362x the median GM employee\u2019s salary. Farley received nearly $21 million in total compensation in 2022, which is about 281x Ford\u2019s average employee wage. And Stellantis CEO Carlos Tavares made 23.46 million euros in 2022, which is around 365x the average employee wage.<\/p>\n Shareholders of all three companies have also been rewarded with dividends and share buybacks.<\/p>\n According to the Economic Policy Institute, adjusted for inflation, wages for autoworkers in the U.S. have fallen 19% since 2008.<\/p>\n The UAW has since decreased its wage increase demand to a 36% pay rise. Stellantis recently offered a 21% increase over four years, and Ford and GM have offered 20% pay bumps. The union rejected all three proposals.<\/p>\n \u201cOur tax dollars are financing a massive portion of this transition to EV,\u201d said Fain on CBS. \u201cBut this transition has to be a just transition and a just transition means, if our tax dollars are going to finance this transition, then labor can\u2019t be left behind. And as it stands right now, the workers are being left behind. The companies want to talk about being competitive. It\u2019s not about being competitive. Competitive is the code word for race to the bottom. What they want is they want to pay us poverty wages, so they can keep on making billions more in profits. And they can keep enriching the shareholders and the CEOs and the corporate executives, while the workers pay the price for it and get left behind. That\u2019s got to stop in this country.\u201d<\/p>\n Automakers have made record profits in the last decade, but they can\u2019t afford to fall behind in their race to compete with Tesla and foreign autoworkers.<\/p>\n Tesla has the upper hand today with its non-unionized workforce, but there\u2019s a chance that the UAW\u2019s momentum could be contagious. The UAW has not responded to TechCrunch\u2019s inquiries about whether it is approaching workers at Tesla and other carmakers like Hyundai, which plans to build EVs at a massive new factory in Georgia. The union also did not say if Tesla workers had begun reaching out in an effort to unionize.<\/p>\n Tesla CEO Elon Musk is famously against unions and has come down on the UAW\u2019s efforts<\/a> to unionize Tesla workers before. Musk also fired dozens of workers<\/a> in New York after they had launched a union campaign.<\/p>\n<\/div>\n<\/div>\n<\/div><\/div>\nProduction delays, rising cost of EVs<\/strong><\/h2>\n
Ford, GM threaten to scrap EV transition<\/strong><\/h2>\n
CEO to worker pay gap in the spotlight<\/strong><\/h2>\n
Workers want a say in EV future<\/strong><\/h2>\n