The Journal. - ‘We’ll Strike All Three’: The UAW’s Historic Walkout

Episode Date: September 15, 2023

For the first time, the United Auto Workers is striking all three Detroit car companies at once, targeting factories in Michigan, Ohio and Missouri. WSJ’s Nora Eckert explains the union’s unprecedented strategy and how much bigger the walkout could get. Further Reading: - UAW Goes on Strike Against GM, Ford and Stellantis  - UAW’s Strike Strategy: Start Small and Keep ’Em Guessing  Further Listening: - Meet the Man Who Has Detroit on Edge  - Scandal Engulfs One of America’s Biggest Unions  Learn more about your ad choices. Visit megaphone.fm/adchoices

Tonight, for the first time in our history, we will strike all three of the big three at once. That's Sean Fain, the president of the United Auto Workers Union, speaking last night. We are using a new strategy, the stand-up strike. We will call on select facilities, locals or units, to stand up and go on strike. At midnight, UAW workers at Ford, Stellantis, and General Motors walked out of three factories. Never before in the UAW's 88 years has the union walked out of all three big automakers at once. Here's our colleague, Nora Eckert. Traditionally, the union picks one company as the target and really goes after that in terms of negotiating and striking.

And conducting a strike across all three automakers really disrupts the industry even more than a single walkout strike would. How likely is it that this will have a swift resolution? I wish I had a crystal ball on that. I think it's the question that everyone in Detroit is asking. There is pressure on the automakers to resolve this quickly, and it certainly could happen. But the way that the union is approaching this strike, it could be very drawn out also.

So we could be in it for the long haul if negotiations don't progress. This is much bigger than Detroit. So these three companies produce about half of the vehicles in the United States. So we're going to see a significant economic fallout from any sort of strike we see on one of these companies, much less all three. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbach. It's Friday, September 15th.

Coming up on the show, the UAW's historic strike. with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Contact a licensed TD Insurance advisor to learn more. People want to know who we are, who we are. So tell them. After the UAW called the strike, our colleague Nora went to a Ford plant near Detroit. So workers were already on the picket lines when I arrived. They were chanting, yelling. There was a lot of energy. There were cars zooming by and honking.

There were hundreds of people out, and not all of them were even from that plant. There's a lot of support for this walkout. How would you describe the mood? Yes, I had the chance to talk to several workers last night, and the mood overall was actually pretty joyous. I mean, there was a lot of energy. A lot of them said, I'm so proud to be a part of this, to take a stand, to be a part of history. I talked to this one woman named Bianca Harris, who has been at this specific Ford Michigan assembly plant for about three years, and she told me she never expected to be a part of something like this. So tell me about walking off the shift. Like

how did that happen? 11 o'clock was approaching at like 10 57. We just heard, you know, our supervisors yelling out, go home at 11. Okay. Yeah. We just grabbed our things and everyone just left out. Yeah. And how did you feel then? Shocked. Yeah. I was shocked that we were called upon. But I mean, honored. We were honored to be picked as one of the first plans to strike. Like I said, it sends a message. We're serious. It's time. Things aren't going to get cheaper. They're only going to go up. How will the strike affect Bianca? Depending on how long this lasts, they're going to see a significant pay cut. So workers on strike get about $500 per week from the union strike fund. As you can imagine, depending on where

they are in the company, that's a decent pay cut, but that they're willing to make this sacrifice because they think they're going to see large increases for themselves and for future generations of automakers. That's something a lot of the workers brought up is, I'm not just fighting for myself, I'm fighting for future workers. Okay, so let's step back and can you answer the question of how did we get here? This strike was really decades in the making. You know, it really has been building for years. And a lot of the workers I've talked to said it started actually around the financial crisis, this idea that they had given up so much as those companies went through that turmoil. A lot of workers gave up retiree medical benefits, and they want to see that restored. So that's one part of this equation.

And that turmoil that you're referring to is the restructurings and bankruptcies of the automakers. Yeah. So aside from Ford, Ford was the only one that didn't declare bankruptcy. But during that time, the workers said they sacrificed a lot and they feel like they haven't seen that back. And of course, you think about the period of inflation that we've seen over the last few years added to these workers were in the factories during the pandemic. There's a sense that they've contributed so much to making these automakers profitable and that they want to see an increase in their wages, better benefits. They want to earn a record contract and they think this is their time to do that.

Can you remind us what are the union's key demands? So the main demand and the one I heard from members is pay. They want a 40% wage increase. They're also looking for cost of living adjustments to keep up with how the economy has changed over the last few years. And they want more work-life balance. They want more paid time off. One of the demands was a 32-hour work week for 40-hour pay. It's not looking like we're getting any movement on that demand. Can we just go back, sorry, to that 40% wage increase? Now, it's over four years, but it's still like a lot. Yeah, it does sound like a lot. Why such a big ask? Well, the 40% number actually came from the average pay increase of

the big three CEOs. So that was one of the reasons the union made that ask, is they said, our execs have seen this pay increase. Why can't our workers? How have the automakers responded? The automakers have put several offers on the table. The latest that we've heard is around a 20% pay increase, so base pay increase. A far cry from the union's 35% to 40% ask, but still significant. They're also, in some cases, offering forms of cost of living adjustments and more paid time off as well. But I have to be honest, there's a huge gap still between what the automakers are offering and what the union is demanding. What are the biggest sticking points? Those change throughout the negotiation process, but I think we're safe to say that wages

is really the key one. And that could change as negotiations progress. But I think that what the automakers are putting on the table just isn't close enough to that around 40 percent ask that the union has made. And that's something that members are really fired up about. I mean, that's the main reason a lot of them went out to the picket lines. The UAW's opening salvo was to select a first wave of plants for walkouts, one important factory from each of the big three automakers. So we had walkouts at plants in Michigan, Ohio, and Missouri last night. So in Michigan, we had Ford workers walking out at Michigan Assembly Plant, it's called,

that makes the Bronco around Detroit. For Stellantis in Toledo, Ohio, workers walked out at the Jeep plant there. And in Missouri, we had workers walk out at a GM plant. Why those plants? So these plants are definitely important to the automakers. I mean, if you think about the Bronco, the Jeep, those are huge names for Stellantis, Ford, but they're not the Ford F-150 plant, the huge pickup plants that probably would hurt the automakers the worst. So the union is taking a stance here and saying, you know, we're going to give you a taste of how this feels. This has been described as like a frog boiling in water type of strategy. They want to put the heat on

the automakers, but they want to save some of their ammunition for if talks continue to not progress. How have the CEOs of the big three reacted to the strike? Across the board, the reaction is that the companies are very disappointed with how this has progressed. They said that they put generous offers on the table. The best offers in Ford's case, it was like 90 years and 80 plus years. And they were disappointed that the union didn't consider these offers more. Here's the CEO of GM, Mary Barra, talking about the strike on CNBC. I think we have a very generous offer on the table right now. It's historic.

From a wage increase perspective, it's the most significant offer we've had on the table in our 115-year history. Coming up, how much bigger could this strike get? Travel better with Air Canada. You can enjoy free beer, wine, and premium snacks in economy class. Now extended to flights within Canada and the U.S. Cheers to taking off this summer. More details at aircanada.com. Need a great reason to get up in the morning? Well, what about two?

Right now, get a small, organic Fairtrade coffee and a tasty bacon and egg or breakfast sandwich for only $5 at A&W's in Ontario. So the UAW's starting this strike by targeting these three factories, which in some ways seems kind of small. It's just about 13,000 workers. What is the thinking there? This approach is very targeted. So instead of doing a full walkout of all 146,000 auto workers across all unionized plants, they're taking a very targeted approach. And they're bringing workers out onto the line where they can really hurt production in specific

ways, but they don't have to pay everyone out of their strike fund. So it's a way to conserve the union strike fund while also impeding production in certain ways. It's really an approach that's going to keep the automakers on their toes because they don't know what plant is going to go down next. They get very little notice. And it's hard to bring plants down and scale them up again, as we saw in the COVID pandemic. So it's going to really disrupt production. And like create confusion.

Yes. UAW President Sean Fain went on Facebook Live last night and said, quote, the whole world is watching. Why does this strike matter beyond just Detroit? Sean Fain has said that he is fighting for the entire working class. He frequently has called out billionaires and the billionaire class. He did at the strike that I was at last night. Class warfare has been going on in this country for the last 40 years. It's the billionaire class and everybody else.

We're all left doing paycheck to paycheck, it's great to get by. What kind of impact could this strike have on the overall U.S. economy? So this targeted approach makes that question a little bit more difficult to answer because if we had all three companies down, the analysts' projections were very clear about how that would have an economic fallout. One study forecast that a 10-day shutdown of the big three automakers would cause an economic loss of more than $5 billion. The suppliers for the auto industry are really on high alert because sometimes they're caught in the crosshairs of these types of walkouts. But also the White House is on watch here.

You know, President Biden wanted to avoid a strike, obviously, and that didn't happen. So I'm sure that his team will be actively involved in avoiding a long walkout. You said Biden's watching. What's at stake for the White House? Biden has positioned himself as a very pro-union president. So he doesn't want to come off as if he's not supporting the UAW's fight here. But he also doesn't want the big three companies to be down for an extended period, especially ahead of an election year.

So the stakes are very high for the White House to help bring an agreement to this as quickly as possible. Today, Biden weighed in. He said he was sending two high-level officials to Detroit to help with negotiations. He also cited the automakers' record profits and said in his view that those profits haven't been shared fairly with workers. The bottom line is that autoworkers help create America's middle class. They deserve a contract that sustains them in the middle class. How long is long for a strike like this? Well, we don't have a precedent for a strike like this. But if they're doing this sort of frog boiling in the pot approach, they could slowly, slowly turn up the heat over several weeks. And so the next week, even really the next 48, 72 hours are going to be key, I think, for showing what type of strike

this will be. Because we could see a quick resolution for one or more of the companies, or we could be in for quite an extended walkout. What are people saying could be the potential fallout at GM, Ford, and Stellantis? This strike is coming at a period where these companies are really trying to reduce costs, especially as they're funneling billions into changing their lineups into EVs. I mean, that's a very costly transition, and they're trying to prove to investors that they're keeping their spending as tight as possible. The automakers are also just replenishing inventories after the COVID pandemic. So this could potentially be a disruption that rocks the industry just as it's getting back on

its feet. If you're one of the big three automakers right now, what are you worried about the most? I think you're worried about members being so riled up that it will be very, very difficult to reach a deal. I think that's sort of the nightmare scenario for the companies right now is that even if they're able to come to some agreement with the union, with the executive board at the union, that the workers won't accept it. And that could drag on the strike. Fain said everything's still on the table. So is a full walkout still possible? It definitely is. And some workers I talked to last night said they hope it is because they would love to see a full walkout. One woman I talked to said, this is a little bit of a letdown, but this is

hour one. We have a long way to go. This episode has been updated. A previous version incorrectly said that the GM plant in Missouri where workers are striking makes SUVs. It doesn't. It produces full-sized vans and pickups. That's all for today, Friday, September 15th. Additional reporting in this episode by Mike Kolias and Ryan Felton. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez-Espinosa, Heather Rogers, Jonathan Sanders, Pierce Singey, Jivika Verma, Lisa Wang, Catherine Whalen, and me, Kate Leinbach.

Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard, with help this week from Sam Baer. Our theme music is by So Wiley. Additional music this week from Peter Leonard, Bobby Lord, Emma Munger, Nathan Singapak, and Blue Dot Sessions. Fact-checking by Nicole Pasulka. Thanks for listening. See you Monday.