The aim of a strike, generally, is the same as the aim of war: it is to win concessions fast. To do this, one must strike to the utmost extent, as Von Clausewitz points out. The target company must come to understand that they need the workers, and that they need a quick settlement. In the case of the current united auto worker strike, the UAW asked for 40% and concessions, but only struck at a few plants. The resulting strike lasted 6 weeks, with Ford settling for a 25% raise over 4.5 years, to April 2028. Viewed on an average, that’s a 5.6% raise per year, assuming the Ford workers accept the deal.
I’m not sure how the UAW boss chose which plants to strike AGAINST. They were mostly low-profit ones at first. Workers at other plants kept on working and received a full salary. The suffering was borne some 45,000 UAW workers (1/4 of the UAW autoworkers) who left the job for strike pay, $500/week. This is a tiny fraction of the 4.36 million auto workers in the US. Auto production was reduced by 80,000 vehicles, we’re told, again a small fraction of several million vehicles typically made in the US in a year.
The strike does not seem to have affected vehicle sales or profits, as best I can tell. The remaining plants ran at higher capacity, and some production was made up by imports from Canada, Mexico, and China. Inventories today are at 60 days, the industry target. In a sense, the major lessons of the strike are that the auto companies don’t need so many workers, and that the UAW can direct suffering to whichever workers they wish.
Ford’s settlement sounds good, but if viewed as a 5.6% raise per year, it barely covers inflation. Inflation is 3.6% now and was 8% last year. Ford retained the right to shed workers and close plants as the economy slows or production shifts. That’s a minimal gain for a 4.5 year commitment.
Battery plants may be covered or not; we’ve not been told. Production is expected to shift to battery vehicles, and these require fewer workers per car. President Biden has mandated a shift as part of his plan to stop global warming (a plan that I find misguided). He’s provided financial incentives for EV owners too, under the “inflation reduction act,” an effort to cause consumers to buy cars they would not otherwise. Largesse of this type is problematic, and highly inflationary, at least in the short term (the next few years). It is supposed to help out down the road, but workers pay their bills in the short term, the here and now.
Despite Biden’s financial incentives to buy electric, most consumers prefer to buy gasoline. The gasoline F150 is the most popular vehicle in America, selling over 600,000 per year. Trump claims that US workers would be better off if we stopped pushing EVs. Less incentives means less inflation, more internal combustion cars, and more union jobs he says. Biden has recently funded a Chinese battery plant, non-union in Michigan, suggesting that Trump is on to something. The strike has produced a raise, but its main contribution, it seems was to punish those UAW workers that the union boss didn’t like.
Robert Buxbaum, October 29, 2023. As I write, Stellantis has offered a tentative deal, but GM is still holding out, and we’ve yet to see if the workers ratify any of these deals.