With the Consumer Price Index rising at rates of 6 percent or higher for more than a year, union members who received a 3 percent raise in 2022 are no doubt feeling the squeeze, despite record profit sharing payouts by GM and others.
The widening wealth gap has emboldened unionists in recent years, leading to organizing wins against the likes of Starbucks and Amazon.
Successful unions rely in part on public support, and according to the Gallup Poll, Americans’ approval of unions in general is the highest it has been since the 1960s.
Of course, the UAW is a special case, after a corruption scandal that sent two former presidents and several other union leaders to prison. In the first direct election of UAW leaders, about half of the executive board flipped to reform-minded candidates not endorsed by the previous leadership.
As of this writing, it isn’t clear whether Ray Curry will remain the UAW’s president or whether he will be ousted by Sean Fain. Presumably, Fain would be more confrontational with the automakers, but whoever is in charge is going to face incredibly challenging negotiations.
Workers are upset, and the companies have been putting up record profits powered by COVID-era vehicle scarcity. Most members probably expect a big payback.
But the automakers know that more normal production, inventory and pricing are coming. And they have to invest billions and billions of dollars to make EVs — and figure out how to make money on them, which most currently don’t. So they want to hold on to as much cash as possible to get across what Mark Wakefield of AlixPartners has called a “profit desert.”
And let’s not forget that many of the senior executives at the Detroit 3 were also executives during the Great Recession and the bankruptcies of GM and Chrysler. A major root cause of those bankruptcies were the massive obligations owed to union workers from contracts negotiated decades before. Barra, Ford Motor Co. CEO Jim Farley and other company leaders know that they could make mistakes in these negotiations that doom them to failure down the road.
