The UAW Strike and What It Could Mean for Expediters
Roughly 13,000 U.S. auto workers have halted making vehicles and gone on strike as of Friday, September 15th after their leaders couldn't bridge a giant gap between union demands in contract talks and what Detroit's three automakers are willing to pay. Members of the United Auto Workers (UAW) union began picketing at a General Motors assembly plant in Wentzville, Missouri; a Ford factory in Wayne, Michigan, near Detroit; and a Stellantis Jeep plant in Toledo, Ohio.
This is the first time in the union's 88-year history that it has walked out on all three companies simultaneously as their four-year contracts expired at 11:59 p.m. Thursday, September 14th.
This strike is different from those that took place during previous UAW negotiations. Instead of going after one company, the union and its new president Shawn Fain is striking at all three of the automakers. If they last long enough, dealers could run short of vehicles and prices could rise, further impacting a U.S. economy which is already under severe strain from elevated inflation.
How Did It Come To This?
In 2007, workers gave up cost-of-living raises and defined benefit pensions for new hires. Wage tiers were then created as the UAW tried to help the companies avoid financial trouble ahead of and during the Great Recession.
Many workers claim that it's time they get those concessions back because the companies are coming away with huge profits while CEOs are raking in millions. They also want to make sure the union represents its workers at their electric vehicle battery factories that the companies are building, so workers will still have their jobs while making vehicles for the future.
Top-scale assembly plant workers are currently making about $32 per hour, plus large annual profit-sharing checks. Ford, for example, says the average annual pay including overtime and bonuses was $78,000 last year.
What Happens Next?
The three-facility limited strikes should help to preserve the union's $825 million strike fund, which would potentially run dry in about 11 weeks if all of the workers walked out. However, Fain states that more plants could be added to the picket lines if the companies don't make better offers. He maintains that the automakers are raking in billions and can afford the concessions.
In addition to general wage increases, the union is seeking to restore cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, and pension increases for retirees.
What Can This Mean For Expediters?
John Elliott, CEO of Load One and immediate past chairman of TCA, believes that "any strike action by the UAW will indeed have an effect on the expedite industry. This year's strike and the approach to it is much different than in the past." He goes on to point out that "in 2019, when the UAW struck GM, Load One actually saw a small uptick in business for those 7 weeks. And with the one-plant-per automaker that they are currently striking, I am hopeful that they are making progress at the bargaining table and that this strike will be short lived. If so, I think we will see an uptick in expedite freight for a week or two following the resumption of plant production."
So, in the beginning stages of what could be a potentially long strike, it can certainly be determined that this is a situation worth monitoring from both a nationwide economic sense as well as how the negotiations play out and ultimately affect the expedite industry.