U.S. auto giants face epoch-making strike

2023-09-24T10:39:22.827Z

Highlights: U.S. auto giants face epoch-making strike. Employees in the sector fight to hold on to the middle class in a conflict that will have far-reaching labor, industrial and political repercussions. "Inequality" and "injustice" are the words most repeated by the dozens of striking workers, with whom EL PAÍS has spoken this week. The strike is called Stand Up, a historical echo of the Sit Down strikes of nearly a century ago, at the height of the Great Depression.

Employees in the sector fight to hold on to the middle class in a conflict that will have far-reaching labor, industrial and political repercussions

It's 12 noon on Friday, September 22 in Ypsilanti, Michigan, about 60 miles from Detroit. The vast majority of employees at that General Motors component distribution center are starting to leave the plant. They get into their cars and come out honking their horns and shouting slogans. They don't go far. They park as soon as they leave the enclosure, get out of their cars, distribute banners and form a picket. "It's a historic moment," says Michael Martin, 59, the center's head of engagement. They join a strike called to mark an era with its far-reaching labor, industrial and political repercussions. "Inequality" and "injustice" are the words most repeated by the dozens of striking workers, with whom EL PAÍS has spoken this week. They fight to cling to the middle class.

The scene is repeated in 37 other installations throughout the United States. The workers follow the call of the leader of the United Auto Workers (UAW), Shawn Fain, who at 10 a.m. addressed them on Facebook and YouTube to ask them to join a historic strike, the first to hit the Big Three of Detroit at once. The mobilization began last week with the shutdown of a General Motors plant in Wentzville, Missouri, which manufactures the GMC Canyon and Colorado; another from Ford in Wayne (Michigan), which assembles the Bronco model and the Ranger truck, and a third from Jeep, from Stellantis, in Toledo (Ohio), from where the Gladiator and Wrangler models come out.

The strike is called Stand Up, a historical echo of the Sit Down strikes of nearly a century ago, at the height of the Great Depression. They started on December 28, 1936 in a body plant in Flint (Michigan) of General Motors – then the largest company in the world – due to the dismissal of two brothers. The workers left the production line and sat in the factory. By staying, they avoided police repression, external pressures, inclement weather (though not heating cuts) and being replaced by scabs. After 44 days of tension and some pitched battles, GM granted a 5% wage increase, allowed workers to discuss union issues in the dining room, recognized their right to unionize, and admitted the UAW as an interlocutor.

Following this success, the union grew from 30,000 to 500,000 members in one year, spreading throughout the sector. One of the heroes of that strike was Walter Reuther, the legendary trade unionist who took over the UAW in its golden age. In 1950 he signed with General Motors the so-called Treaty of Detroit of Reuther, a collective agreement that, in exchange for avoiding strikes, granted health coverage, pensions, the right to unemployment, more vacations and wage increases. The UAW reached similar agreements with Ford and Chrysler. For autoworkers, the doors of the middle class opened wide. In the following decades they were able to afford a good car, a good house with its patio for barbecues, send their children to college... The Big Three, benefiting from protectionist measures and a buoyant economy, could afford it.

Competition from foreign cars, dragged inefficiencies, lack of innovation and deteriorating quality led large U.S. manufacturers to lose market share and profitability in the 1980s and 1990s. On the eve of the Great Recession of 2008, its viability was already threatened and unions admitted sacrifices. The financial crisis led to the bankruptcy of GM and Chrysler (later acquired by Fiat and integrated into Stellantis), public bailouts and restructuring of the companies, with plant closures, cost cuts and union concessions. Companies have recovered and in recent years have achieved multimillion-dollar profits that workers believe have not been distributed fairly.

Hal Jomaa, 60, is group leader at the Jeep (Stellantis) assembly plant in Toledo, Ohio, where he has worked all his life, more than 40 years, but this is the first time he has been on strike. "We are defending our way of life, trying to get enough money to take care of our families and stay in the middle class. Here you work hard, six days a week, 10 hours a day. We do not see our family and we have to work more hours to earn the same as 20 years ago," he denounced this Friday at the gates of the factory, dressed in red, the war color of the workers in this strike.

Shawn Fain, 54, is the union's first president elected by a vote of all its members and not through delegates. Since taking office last March, he has been vindictive. This Friday he called for the strike through a live video in which he appeared dressed in camouflage, as a kind of guerrilla leader, and in which he invited the president of the United States himself to join the pickets. Joe Biden, who has picked up the gauntlet and will join Tuesday's protest in Michigan, tweeted.

Fain has given a nod to history by calling the mobilization Stand Up, but he has innovated with his strike manual. The usual thing in the UAW was to give priority to the agreement of one of the Big Three, with strike included if necessary, and then demand that the other two equalize the conditions. Fain has dared to go against all at once, but with a selective strike. It started with one factory in each group, with only about 13,000 of the nearly 150,000 affiliated workers in those companies. "This strategy will keep companies on tenterhooks. It will give our national negotiators maximum leverage and flexibility and, if we have to go all out, we will," Fain said in explaining his plan.

That gradual approach allows him to use the carrot and stick: this Friday he called for about 6,000 other workers from 28 facilities of Stellantis and GM alone, saving Ford from burning for having shown a greater willingness to negotiate. At the same time, it preserves its resistance fund, a fund of 845 million dollars to compensate striking workers with 500 dollars a month. Profitable models are produced in the factories chosen so far, but Fain reserves the possibility of stopping the plants where Detroit's bestsellers, such as the Ford F-150 and Stellantis' Ram trucks, which represent a huge part of the companies' revenues and profits, come from. The Big Three and some of their suppliers have laid off some 6,000 workers in moves they say are related to the strike and its bottlenecks.

The workers seem ready to keep pace with their leader: "It's a new day. We have to try new tactics. We can't try to do the same things and play the same games. We played the game they wanted and we are here working, charging less, living paycheck to paycheck. We can't live like this, not for the next four years," complained Michael Martin at GM's Ypsilanti plant. "It's strategic," agreed Jomaa at Stellantis in Toledo. Justin Nelson III, 48, who has worked as a painter at Ford's Wayne factory for 27 years, used that same word Thursday. "It seems that companies are bothered," he added.

The list of demands is long, including a 32-hour workweek that does not seem a priority, but focuses on three points: higher wages and pensions, elimination of the double salary scale by which new employees earn half ($ 16 per hour) than the oldest and guarantees in the transition to the electric car.

The UAW demands adjustments in pensions for the cost of living and a salary increase of 40% in four years, like the one that, according to its calculations, the CEOs of the companies have enjoyed in their remuneration. The multimillion-dollar salaries of managers have ignited tempers and are a catalyst for protest. Guadalupe Perez, 64, of Rio Bravo, Tamaulipas, Mexico, who works on the assembly plant line in Toledo, Ohio, says the company is treating them "unfairly." "I've been working here for 40 years and I haven't gotten a raise for 10 or 12 years and they [executives] are making a lot of money." "We made a lot of concessions in 2008, but now it's 2023 and inflation is skyrocketing, everything is through the roof and we just ask for something back. We didn't even ask for more than we had before. We only asked for what we would have had with things in place," Justin Nelson III explained.

"Inequality is a huge background to this strike, with the gap between the compensation of executives in the automobile industry and that of workers as an understandable grievance," Chuck Collins, who directs the Program on Inequality at the Institute for Policy Studies in Washington, told El País. "After 40 years of wage stagnation, and a pandemic in which incomes and wealth growth have mostly gone to the richest 1 percent, the UAW and other workers believe they must share in the productivity gains of recent decades."

According to the Economic Policy Institute (EPI), a think tank with 37 years of history, the compensation of the top executives of companies, CEOs, has grown by 1,460% since 1978, while that of the typical worker has increased only 18%. Taking the 350 large listed companies, the boss earns 399 times what a typical employee, when that ratio was 20 to 1 in 1965 and 59 to 1 in 1989. In the case of the Big Three, an average Stellantis worker would have to work 365 years to accumulate the salary earned in 2022 by Carlos Tavares, the CEO. General Motors (GM) chief Mary Barra earns 362 times more than a middle employee. And in the case of Ford, its first manager, James Farley, achieved a remuneration 281 times higher than the typical or medium employee, who has so many who charge more than him as they charge less. Their salaries were between 20 and 30 million dollars, so the workers do not want to hear a word that the wage increases are unaffordable.

"I understand that the labor costs of these vehicles are only 5% to 6%. And I understand that if they gave us the increases we asked for, it would not affect the cost of the car. However, taking into account the 30 million a year of the CEOs, that definitely affects the cost of the car, "said Jomaa in Toledo on Friday. "It's a battle of the working class against the rich, of the haves against the have-nots, of the billionaire class against everyone else," Fain harangued in one of his speeches.

"The level of inequality of recent decades has become absolutely medieval. Part of the broad support for UAW workers comes from people's knowledge of how extreme inequality has infected America," Collins explains. Crowds of cars and trucks passing the pickets show their sympathy with the protest with a roar of horns.

Workers are also unnerved by the double wage scale, one of the unions' concessions in the midst of the financial crisis. "The abuse of temporary, subsidiary and second-rate workers must end," the UAW says. "This strike is important for equality, to make us all equal. One band, one sound. We just want justice," Gary Jarano, 50, who joined GM's Ypsilanti distribution center this year, said Friday. "It's very unfair," Jomaa agreed. "You have another human being working next to you earning half of what you earn and doing exactly the same job, building the same vehicle, but still they are not entitled to any profit sharing, they are not entitled to any bonus. That's not the American way: to have two people doing the same thing and not making the same money," he explained.

While the strike extended, Detroit was held this week in style its Auto Show, the most important in the United States. Among its star models, new electric vehicles. The picket line workers see that threat as more distant, but the UAW leadership is very aware of it and calls for a just transition. "Automakers are closing even profitable plants. The Big Three are killing jobs and destroying communities. This must stop. The government is giving billions of dollars in subsidies for electric vehicles to the Big Three, but workers at its new battery plants are stuck in high-risk, low-wage jobs. The transition to electric vehicles is a historic opportunity to raise the standards of autoworkers rather than lower them."

The executives argue that addressing the UAW's labor demands would make their companies unviable. They point out that they already have much higher labor costs than Tesla (which has a huge efficiency advantage) or foreign manufacturers with plants in the United States, whose workers are not unionized. And that the extra expense would prevent them from undertaking the large investments required by the transition to the electric car.

The auto strike comes at a time of union resurgence in the United States, in part because of the loss of purchasing power stemming from inflation. Workers at Starbucks, Amazon and Apple have begun unionizing despite business pressure. This summer has set records for days lost to strike so far this century. The car strike adds to the strike of actors and screenwriters in Hollywood, that of Los Angeles hotel workers and other conflicts. UPS and railroad couriers avoided strike at the last moment. As almost a century ago, with the Sit Down strike, workers in many other sectors are watching for the Stand Up strike. "This is the defining moment of our generation," Fain says.

Follow all the information of Economy and Business on Facebook and X, or in our weekly newsletter