The Journal. - Meet the Man Who Has Detroit on Edge

Episode Date: September 6, 2023

United Auto Workers president Shawn Fain is throwing out the traditional union playbook for contract negotiations. WSJ’s Nora Eckert reports that Fain is preparing for a strike, possibly against three automakers at once. Further Listening: -Why 46,000 Auto Workers Are on Strike  Further Reading: -Meet the Man Who Has Detroit on Edge  -UAW Accuses GM, Stellantis of Unfair Labor Practices  Learn more about your ad choices. Visit megaphone.fm/adchoices

There is a tradition in Detroit. It's a public handshake between the head of the UAW, the Auto Workers Union, and each of the CEOs of the Big Three automakers. It happens when it's time to negotiate the union's new four-year contract. And it's a sign of good faith negotiations. four-year contract. And it's a sign of good faith negotiations. But this year, the new UAW president, Sean Fain, decided not to extend his hand. In a break with tradition, there won't be no public handshake ceremony with the companies. I'm not shaking hands with any CEOs until they do right by our members and we fix the broken status quo at the big three. The members have to come first. And he said, I'm not shaking your hand until we

get a fair deal. And instead, I'm going to go out and meet with members outside of unionized plants. That's our colleague Nora Eckert. So he actually spent that full day going to a Ford, a GM, and a Stellantis plant and talking with members. How big of a deal is that? It demonstrated that he is going to be doing things differently. He's a little bit of a new blueprint in the union. Someone who's connecting a lot more with the membership, being a lot more direct and transparent with the membership. And he's been really a wild card for the press and for the automakers. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbaugh. It's

Wednesday, September 6th. Coming up on the show, how the new tough-talking president of the UAW could be driving toward a big strength. At Air Miles, we help you collect more moments. So instead of scrolling through photos of friends on social media, you can spend more time dinnering with them. How's that spicy enchilada? Very flavorful.

Yodeling with them. Ew. Ooh, must be mating season. And hiking with them. Is that a squirrel? Bear, run! Collect more moments with more ways to earn. Air Mile. Where did Sean Fain come from? Sean Fain grew up in Kokomo, Indiana. It's a car company town. And he really got his start working as an electrician within Stellantis. Then Chrysler. Yes, yeah, then Chrysler.

But even before then, he was really connected to the automotive world. His whole family worked either for GM or for Chrysler. And he spent a lot of his days talking with his grandparents about their work at those plants over these weekly Sunday dinners with their whole family. So he got a really good sense of what the union and what the companies were doing for his family at that time. Sean Fain is a middle-aged guy. He's often wearing khakis and polo shirts. He keeps his thinning hair clipped short. And what's he like?

He's pretty quiet, understated, very thoughtful. He loves talking about his daughters and his grandkids. He loves talking about music. He's a big 90s rap fan. Like what? We were asking him what is a song from that period that would encapsulate his focus in the union. He said, Fight the Power.

Gotta give up what we need. Our freedom of speech is freedom of death. We got to fight the power, baby. Fight the power. Makes sense. Yeah, exactly, exactly. We've heard that he sometimes pulls those out at union karaoke events, pulls out his favorite 90s rap songs.

Not what you'd really expect maybe if you were just meeting him. Since Fane has been in the UAW, it's changed a lot. Membership in the 88-year-old union has shrunk from over one million at its peak to 400,000 now. And Fain's chance to rise up to the top came about in an unusual way, after a scandal within the union four years ago. The corruption went all the way to the top, and it went on for years. That's what we learned today as the U.S. Attorney's Office filed a felony charge. Played a key role to funnel more than a million dollars from the union. Dollars for lavish restaurants, spa services, clothes, musicals.

The corruption scandal that's rocked the union. More than a dozen people were charged and convicted in a corruption scheme that involved embezzling union member dues and taking bribes from Chrysler. Two former UAW presidents went to prison. That led to a lot of changes within the union. But one of them actually was a system where members could directly elect their leaders. In the past, UAW members didn't elect their president? No, it was really done through local leaders.

So the UAW has all these locals around the country, and officials at those locals would appoint the leadership. Now the members have a direct voice. The first direct election of a UAW president happened this spring. The two main candidates were Fain and the incumbent president. Fain was seen as a bit of a long shot because he was outside of the union establishment. And what was Fain's campaign like? It was a real grassroots campaign. That's the best way I can describe it, I think. Very social media centered, something the union hasn't

really had the greatest reputation for doing in the past. So throughout the campaign, I've reached out to membership, you know, basically from every available means possible. He brought on this slate of social media staffers, people who have been really successful in other parts of the labor movement outside of automotive. Through this, but I felt it was important to try to get to every member we can to get our message out there. And so that the membership has access to me also. You have a right to know who you're voting for and you have a right to ask those questions. So, you know, so I've done my best. So Fain ran this very social media savvy campaign, and I think that resonated with younger voters, you know, across the UAW. Bain's campaign was built on the image of him as a fighter. He would fight corruption,

fight for a better contract, fight for better pay, and he wouldn't back down. No concessions. So he's saying, I'm going to win you a contract that doesn't walk back anything that you have right now, which the automakers have had to do during the bankruptcy and in previous rounds of talks to save the companies. In the end, Fain squeaked out a victory. Here he is on the 91. This is about ending sellout unionism and ending company control. It is an honor of a lifetime to be elected to lead our union. And I'll never forget that the first time the members of the UAW were given the right to vote, we chose change. We chose to fight.

Now, Fain has to take these big campaign promises and fulfill them in contract negotiations that started this summer. What's at stake for the UAW workers in these talks right now? Well, fame says he's fighting for the future of the UAW. That's next. We'll be right back. Must be legal drinking age. Please drink responsibly. Carlsberg Canada Inc. Waterloo, Ontario. With Uber Reserve, good things come to those who plan ahead. Family vacay? Reserve your ride as soon as you book your flights. To all the planners, now you can reserve your Uber ride up to 90 days in advance.

See Uber app for details. The UAW and the big three automakers, Ford, GM, and Stellantis, started talks in July. They were negotiating a new labor contract for about 146,000 hourly workers. And they have a deadline of September 14th to come to an agreement. So Sean Fain's demands, he's called them, you know, the most ambitious, the most audacious in the union's history. In a lot of ways, they are. So a few of them include a 40% pay increase over the life of the four-year contract and 32-hour workweek at 40-hour pay. That one's a bit more eye-popping. I think for folks, that's been the flashiest demand.

What is the basis for that demand? Well, Sean has said our workers have given too much of their lives to these companies, and they deserve more time to themselves, to their families. It's especially a correction after the pandemic, I think, too. You know, that's given a lot of energy to this movement for greater work-life balance. Fain is also demanding that new factories for electric vehicles have unionized workers. Yeah, so the industry is, you know, switching to producing electric vehicles right now. So job security is really the theme underlying a lot of these demands. Fain is looking for commitments from the companies that they're not going to be just replacing

all of their workers who are building gas engine vehicles with new workers or perhaps not even unionized workforce to build EVs and batteries. I mean, these are potentially existential threats to the union's future. What does success look like for Fain? I think he's got a very high bar for what success looks like. And if I had to guess, whenever this contract is ratified, I'm expecting it's not going to meet his current bar, but I think his overarching goal is twofold. One, creating a system in which workers don't have to be at the plants as much as they are right now. So better work-life balance, better hours, better scheduling stability,

and two, better pay, whether that's getting workers making the same wage for the same job or just getting a double-digit base pay increase. He's saying we haven't seen a raise in four years, and our CEOs have all seen 40% pay increases in the same period. So time for us to get a slice of that pie. And how are these negotiations going? They're playing out in a much more public way. Sean Fain is throwing out the union playbook. So before union leaders would sort of take the stance of, I'm negotiating directly with the companies behind the scenes. And sometimes the members would get sort of a bullet point version of what happened. And Sean Fain has taken the approach of, no, actually, I'm telling you exactly what the automaker said to me.

For instance, last week, when Ford handed Fain its counterproposal, Fain made the proposal's details public and said it, quote, insults our very worth. Here he is on his weekly Facebook live stream. What has Ford proposed? A 9% general wage increase over the life of the contract. Instead of cost of living, they've offered one-time lump sum bonuses. Companies love lump sum bonuses

because they keep your base wages low, reducing your lifetime earnings. And also, it is getting more combative. You know, Sean threw one of the automaker's demands in the trash can from Jeep maker Stellantis. Everything they're looking for in this document is about concessions. So I'll tell you what I'm going to do with their proposal. I'm going to file it in its proper place because that's where it belongs, the trash, because that's what it is. The thing all sides are trying to avoid is a strike.

Now, UAW strikes are not uncommon. In 2019, workers walked out of GM factories for 40 days. workers walked out of GM factories for 40 days. But calling all workers from all three automakers to strike at the same time is much less common and has a higher risk for everyone. But this year, Fain is threatening just that. How possible is it that Fain would call all 146,000 auto workers to strike? I think analysts, industry observers are saying much more likely now than it has been in the past. You know, for a few reasons.

One, you've got Sean Fain at the helm. He's fresh and he's making some very high demands and he's setting the bar high for workers. So there's a sense that they won't be able to ratify a contract because he set the bar so high and a strike will be more likely because of that. And what are the automakers saying about the possibility of a strike? The automakers are a bit more muted on that,

you know, as they typically are. I think there's a sense that it could be coming and there's preparation, but nothing that they will publicly acknowledge. Is the UAW prepared for a strike? So the union has a strike fund where they pay out workers who are, you know, walking out each week. Right now their strike fund sits at about $825 million, which is pretty robust for them. And they pay workers $500 a week. They actually just increased that to $500. So there's different projections about how long the union could support a strike. I mean, if it wanted to deplete its whole strike fund, it could probably stomach

a couple months, even walking out at all three, some analysts project. And if they did strike all three automakers, what would the impact be on the economy more broadly? Yeah, in terms of the economic impact, there was a study that came out that said that a 10-day strike of all three automakers would result in a total economic loss of $5 billion. So that's just a week and a half. And the union strike fund can support much more than that for all three automakers. What does Fain's kind of aggressive stance toward the automakers in these contract negotiations. Tell us about this moment in the U.S. labor movement. Sean is part of this cohort of more outspoken, more aggressive union leaders

that we're seeing across industries. It's not just in automotive. And they're really saying, our members have given up too much for too long and it's time for us to take that back. And we're willing to do whatever we need to do to accomplish that. At a recent rally, members started chanting, by all means necessary. Chanting that, by all means necessary. And their point was, we're willing to get what we deserve and we're going to do anything we can to do that.

Also, the economic climate is changing. Labor movements across the country are getting more and more energy. We've had this period of high inflation and workers are demanding that they're seeing, you know, a corresponding wage increase. So there's a lot of ingredients that are making this round of talks a little more contentious and making things a little more likely

that we'll see a strike. That's all for today, Wednesday, September 6th. The Journal is a co-production of Gimlet and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.