Job Security in Auto Workers’ Strike
In the midst of the United Auto Workers (UAW) strike against General Motors, Ford, and Stellantis, job security takes center stage. While wages and benefits are important factors, ensuring employment stability is paramount.
UAW President Shawn Fain recently highlighted significant progress in negotiations with Ford regarding job security. Notably, when expanding the strike to GM and Stellantis, Fain excluded Ford due to this progress.
One critical development is Ford’s commitment to provide up to two years of pay and health benefits for workers impacted by layoffs and plant closures. Additionally, Ford has agreed, for the first time, to allow the union to strike in protest of plant closures. Typically, labor agreements include a no-strike clause throughout the contract’s duration, preventing the union from using strikes to oppose factory closures.
Fain emphasized the importance of this achievement, stating, “This is an important victory in our fight to save our jobs, keep families together, and prevent our communities from being devastated.”
Although the UAW hasn’t disclosed detailed job security discussions with Ford, it’s essential to note that no specific agreement exists until an overall tentative contract is reached. Ford issued a statement in response to Fain’s message, acknowledging progress in some areas but highlighting the need to address significant gaps in key economic matters. The statement emphasized the interconnected nature of these issues within an overarching agreement supporting mutual success.
While GM and Stellantis have not shown movement towards accepting the union’s job security demands, reaching a deal with one automaker will exert pressure on the other two to follow similar lines.
Job security holds particular significance in these negotiations due to concerns about potential future job losses associated with the shift from gasoline-powered to electric vehicles (EVs). EVs require up to 30% less labor for assembly, given their fewer moving parts.
Jeff Schuster, Executive Vice President of GlobalData, noted that while automakers may not currently have plans to close facilities during this contract, once such provisions are in place, they become challenging to remove.
The risk of job loss poses an existential threat to the UAW, which is seeking expansion into other industries. Over the last two decades, the UAW has witnessed a membership decline of 45%, losing over 300,000 members primarily due to declining membership at the Big Three automakers. The union attributes this decline to the closure of 65 U.S. plants and facilities by the Big Three, including a Stellantis assembly plant earlier this year.
Multiple factors contributed to these job losses, including outsourcing to other countries and increased automation. Additionally, the drop in the market share of the three unionized automakers played a substantial role. In 1999, the Big Three held 68% of the market, but by last year, that share had dropped to 41%.
In previous contract negotiations, the union sought investment commitments in U.S. plants to secure jobs. The belief was that significant investments in plant upgrades, tooling, and equipment indicated a commitment to keep the plant operational. These investment guarantees are likely to be a key component of the contracts that will eventually end the current strike.
General Motors CEO Mary Barra emphasized the importance of job security, stating that employees want to be assured that their facility will continue to operate with new products.
