May 25, 2023 - News

Potential for strike looms over upcoming UAW contract talks

Illustration of a raised fist icon that starts to crackle with electricity.

Illustration: Brendan Lynch/Axios

With contentious contract negotiations fast approaching, the United Auto Workers are facing unprecedented change — both inside their union and on the factory floor.

Why it matters: Newly elected UAW President Shawn Fain — who has turned heads with his combative tone — hasn't ruled out a strike when contracts with the Big Three automakers expire Sept. 14.

  • About a quarter of the union's 380,000 active members are in Metro Detroit.
  • A strike would immediately hurt the local economy and could have long-term ramifications for a global auto industry transitioning to electric vehicles.
  • Bargaining is expected to start in July.

Catch up fast: Fain was narrowly elected president in March — the first victory in decades for a UAW candidate outside the reigning administration caucus.

  • He ran on a reform platform against corporate greed, promising to end the union's cozy relationship with manufacturers.
  • "We're here to come together to ready ourselves for the war against our one and only true enemy: multibillion-dollar corporations and employers that refuse to give our members their fair share," Fain said in a speech to members after his election.

The big picture: Against the backdrop of the government-backed EV transition, the contract talks come amid surging corporate profits, plant closures and new UAW leadership that has pledged to repair the damage from a recent corruption scandal.

  • The 2024 presidential election adds another dynamic. The union, which has traditionally backed Democrats, is withholding an endorsement of President Joe Biden's re-election while it gauges his administration's support for workers while incentivizing EVs.

What they're saying: "They're playing a high-stakes game of Russian roulette here," U of M business professor Erik Gordon tells Axios about the UAW. "They could beat a short-term victory out of the Big Three, but five or 10 years from now regret it."

  • "There's a strong possibility of a strike and there's a possibility the strike could be a long one."

Between the lines: A production stop could throttle vehicle inventories, which have only recently begun to recover from supply chain breakdowns.

What we're watching: Fain's tough talk ratchets up the pressure to deliver higher wages to union members without imperiling their jobs in the long run.

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