The past summer saw the world of labor rise to new heights in America. In response to automaker corporations benefiting from tax cuts and soaring profits, the United Auto Workers (UAW) proposed a contract that would raise wages, preserve or add jobs, increase benefits, and secure a more equitable future. However, automakers General Motors, Ford and Fiat Chrysler Automobiles (FCA) have yet to agree to the terms proposed by the union. This potential UAW strike highlights how high the stakes are for both sides, with the outcome of the negotiations being a pivotal moment for the future of American labor and the automotive industry.
As negotiations began in July 2019, UAW executives have sought the support of their members for the current contract proposal that they believe “gets the best terms possible for our members, retirees and their families.” The proposal includes wage increases, a potential path to full-time employment for temporary workers, and more healthcare coverage. For example, the new proposal would add thousand of jobs, guarantee a minimum of three percent wage increase, and convert temporary workers to full-time with better benefits. The proposed contract follows a tradition of union victories, that have included substantial wage gains and employer-funded healthcare.
Automakers, however, are wary of the contract proposal. Companies would prefer to use their resources to invest in new technology, such as self-driving cars and electric vehicles, and would rather avoid the extra costs associated with employee wages and benefits. FCA, which is supported by a number of foreign automakers, argued that the contract does not reflect the financial realities of the company. It responded with its own proposal that would reduce labor costs and modify the existing contract.
The lack of progress in negotiations has led to a potential UAW strike that could have widespread impacts. Analysts estimate that a strike could affect a large portion of the US economy. Hundreds of thousands of people would lose wages and millions of cars could potentially be delayed, leading to a significant reduction in car sales. Automakers could also be forced to choose between meeting union demands or investing in new technology and products.
The proposed strike puts automakers in a difficult position. They must decide between meeting union demands or preserving resources for investment. As the UAW and automakers continue negotiations, it is clear that the outcome could have dramatic implications for the future of labor in America. The bargaining and appropriations of both sides will determine how each side will emerge from the negotiation process and set the stage for the future of workers.
