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Strike is imminent! Ask for a 40% raise! Ford "hard just", Musk "wound salt"
Sep 21,2023
Prior to this, the United Automobile Workers of the United Auto Workers (UAW) held contract negotiations with the three major auto companies-General Motors, Ford Motor and Stellantis Group, seeking substantial salary increases and other rights for auto workers.
According to CCTV News, the labor contract between the two parties expired and failed to reach a new contract.
Subsequently, 12700 UAW workers went on strike at the three factories of the three major automakers in Michigan, Missouri and Ohio.
Workers in three major car companies went on strike at the same time.
The contract between auto workers and auto manufacturers expired on the 14th, and the two sides did not reach an agreement through negotiation. Therefore, a large number of American auto workers began to strike in the early morning of the 15th local time.
Analysts pointed out that the auto workers' strike may cause chaos in the operation of the auto industry, which in turn will affect the US economy.
At midnight on the 14th local time, the labor contracts of about 150000 American auto workers with the three automakers General Motors, Ford and Stalantis expired, and the labor and management failed to reach a new contract.
Subsequently, 12700 UAW workers went on strike at the three factories of the three major automakers in Michigan, Missouri and Ohio. This is also the first time in the more than 80 years since the establishment of the United Auto Workers Union that auto workers have simultaneously struck against the three automakers.
Sean Fein, president of the United Auto Workers, said there was no larger "general strike" yet, but said that if labor and management could not reach a new contract, "any option is possible".
In this regard, auto industry analyst Garrett Nelson said: "The most optimistic estimate we currently see is that in terms of strike costs, the cumulative loss in the first ten days may exceed $5 billion."
"The automobile industry is the largest manufacturing sector in the United States. If this situation continues into October and November, economic growth in the third quarter will definitely be affected, and the fourth quarter will be even more affected."
Unions demand more than 40 percent pay rise
Earlier, according to Reuters, the UAW sought a salary increase of more than 40% and a fixed benefit pension for its members in this negotiation with Ford, GM and Stellantis.
If the above conditions are met, the labor costs of the "Detroit Auto Big Three" will increase by 45 billion to 80 billion US dollars (about 329 billion -584.9 billion yuan) per year, and threaten their future viability.
According to public information, UAW is one of the largest workers' associations in the United States. It has 146000 members in the "Detroit Auto Big Three"-General Motors, Ford, and Stellantis Group, accounting for about 56% of all workers in the U.S. auto industry.
In addition, according to surging news reports, Tesla seems to have become the winner of the strike as expected by the market. Analysts believe that this possible strike may be good for Tesla at a critical moment when traditional car companies are actively transforming to electric vehicles.
Wedbush analyst Dan Ives said in a research note that the strike will affect U.S. auto production, and Tesla will have the opportunity to benefit from any suspension of production by competitors.
After the strike, Musk, who was keen to "sprinkle salt on his opponent's wounds", did not forget to tweet and show off:
"Tesla and SpaceX have a great factory atmosphere. We all encourage music and have fun. This is very important to make people look forward to going to work!"
"By the way, I pay my workers more than the UAW wants. And the performance requirements are higher." Musk added, "Over the years, many technicians working on the production line in our factory have become millionaires by holding company stock options."
Big three "hard just" union
In this regard, there is a view that the U.S. auto industry is currently in the throes of electric vehicle transformation, and is facing increasingly fierce market competition and high costs. If the "Big Three" agreed to the UAW's request, it would be tantamount to cutting off their own lives.
Take Ford Motor as an example. In the second quarter of this year, although its Ford Model e business unit, which focuses on electric vehicles and innovative technologies, achieved 39% revenue growth, the total amount was only $1.8 billion, while the operating loss in the same period was as high as $1.09 billion; in the first half of this year, Ford's electric vehicle business lost $1.8 billion billion.
Affected by the electric vehicle pricing environment, investment in next-generation products and production capacity, and other cost expenditures, Ford expects the loss of the electric vehicle business to expand to $4.5 billion this year, which is 50% higher than previously expected.
According to the Financial Associated Press, U.S. President Biden delivered a brief speech on Friday expressing support for workers in the auto industry.
At the beginning of his speech, Biden said: "The reason behind the fact that American automakers have been setting record profits, including in the past few years, is the skill and sacrifice of members of the United Auto Workers (UAW). In my opinion, these record profits have not been fairly shared."
At the same time, Biden also announced that he had sent Acting Labor Secretary Julie Su and White House senior adviser Kim Schilling to Detroit to help coordinate negotiations from both sides. The two men have also been involved in the negotiations in recent months.
Biden stressed that no one wants to see a strike, but he respects the auto workers' right to use the collective bargaining mechanism and understands their anger.
Generations of American auto workers have made too many sacrifices for the survival and prosperity of the industry, especially during the subprime mortgage crisis and the epidemic, and they are entitled to a fair share of the wealth they create for their businesses.
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