UAW begins bargaining as the industry braces for tough contract negotiations

Shawn Fain, president of the United Auto Workers, made a commitment to union members that he would conduct contract negotiations with the Detroit automakers differently this year. 

Fain has brought the UAW into the public eye with clever political tactics, compelling social media messaging, and the conviction that the afflicted union can ride a national wave of support for organized labor to win a “war” against “corporate greed” and multibillion-dollar companies like General Motors, Ford Motor, and Stellantis.

“As a union and as working people, this is our turning point,” during a Facebook Live gathering with members, Fain remarked, “And we’re adopting a new approach every step of the way.”

The negotiations contain:

• New senior bargainers on nearly all sides are striving to establish themselves.
• A feeling among union members that concessions are not an option.
• Considerable concerns about the industry’s shift to electric vehicles losing employment and reducing earnings.

Negotiations are concurrent with contract negotiations with Unifor, a Canadian labor organization representing 18,000 workers at Detroit automakers whose contracts are up in September. Even though the unions in America and Canada have declared unity, there will likely be increased rivalry for employment and investments.

During a Facebook livestream last month, Fain declared, “We’re in the process of changing the culture of this union from a reactionary, defensive union to an aggressive and offensive-minded union.”

Most significantly, Fain decided to defer the group’s support for President Joe Biden’s reelection, a longtime union ally, unless he responds to UAW concerns over the industry’s transition to EVs. Fain has also frequently stated that he will do “whatever it takes” to ensure members receive their “fair share,” including, if necessary, using work stoppages or strikes.

According to Bank of America, a strike of this kind might cost hundreds of millions per week in earnings before interest and taxes, potentially adding to billions of dollars in losses for the auto industry. 

Effect of a union strike on each automaker’s estimated weekly output:

• General Motors: $770 million, or 46 cents in adjusted earnings per share,
• Ford: $620 million, or 11 cents in adjusted EPS 
• Stellantis: $470 million, or 12 cents in adjusted EPS