President Biden told reporters on Labor Day that he’s “not worried about a strike until it happens.” And while he can remain hopeful that the United Auto Workers (IAW) union won’t strike, the reality is that if the nation’s three major automakers don’t come to an agreement by 11:59 p.m. by September 15, they will do just that.
Around 145,000 UAW members currently work for General Motors, Ford, and Stellantis, and the current UAW contracts are set to expire next week. These workers voted to authorize strikes against any company without a tentative labor deal by September 15, 2023.
Why Should Biden Be Worried?
According to Anderson Economic Consulting, a Michigan research firm, a 10-day strike involving all three automakers could cost the US economy over $5 billion. The extent of this strike would reach beyond automakers and union workers and also reach suppliers and businesses across the nation. In fact, in 2019, a six-week strike at General Motors was enough to push Michigan into a recession.
Why Is UAW Striking?
There are several reasons why the UAW union voted to strike, but the top of the list includes the issues around the 20 new EV battery plants for government-secured loans. These plants are known for paying lower wages than those earned by UAW members under their current contracts, and this is a big point of contention.
UAW President Shawn Fain stated, “These companies are extremely profitable and will continue to make money hand over fist whether they’re selling combustion engines or EVs. Yet the workers get a smaller and smaller piece of the pie.”
While Biden recently suggested that automakers “honor the right to organize” at new battery plants and that workers should be rehired and trained under comparable wages when ICE engine plants close, the choice is in the hands of these three major automotive companies.
Unfortunately, Biden has no legal authority to order either side to continue on the job, and the most effective thing he can do is apply public pressure.