UAW Strike Possible... First Simultaneous Big Three Auto Union Walkout Feared

Negotiation Deadline on the 14th Approaching... Significant Differences Remain
Strong Union Leader Favors Strike Over Deadline Extension
Simultaneous Strike by Three Companies Could Cause Losses Exceeding 1 Trillion Won

The United Auto Workers (UAW) is increasingly likely to strike against the Detroit Big Three automakers?General Motors (GM), Ford, and Stellantis?for the first time in four years during collective bargaining. With less than two weeks remaining before the negotiation deadline and significant differences between the two sides, there is growing speculation that a simultaneous strike against the Big Three will be inevitable, drawing attention to the potential impact on the U.S. economy.

[Image source=Reuters Yonhap News]

The New York Times (NYT) reported on the 3rd (local time) that "the gap between the union and the companies has not narrowed as the negotiation deadline approaches," adding, "With less than two weeks left to reach a new labor agreement, some form of strike seems unavoidable." The previous day, CNBC also reported that "the Big Three automakers are unlikely to avoid a UAW strike," noting that UAW President Shawn Fain is preparing to picket.

Negotiations between the Detroit automakers and the UAW are taking place for the first time in four years since 2019. The deadline for this round of talks, which began in July, is set for the 14th. However, NYT explained that even after the deadline, if both sides feel negotiations are progressing well, talks could continue without a strike.

The issue lies with President Fain. Previous UAW presidents extended negotiation deadlines as contract expiration approached, but the hardline Fain has firmly rejected any extension and has already mentioned the possibility of a strike. He emphasized, "The 14th is the final deadline," and added, "We could begin protests from that day."

Given this situation, industry insiders are placing more weight on the likelihood of a strike becoming a reality. Since Fain’s hardline stance was a key factor in his election last year, it is expected that he will choose to achieve results through a strike rather than extending the negotiation period.

According to a recent survey by Morgan Stanley of 99 investors, 58% responded that "the likelihood of a strike is very high." Another 24% said "there is some possibility." Additionally, 96% of respondents expected the strike to last more than a week.

Sam Fiorani, Vice President of automotive market research firm Auto Forecast Solutions, told NYT, "President Fain has declared war, which means a battle is imminent, and that battle is a strike," adding, "The UAW leadership needs to prove they are fighting for their members, so it is unlikely they will let this pass without a strike." Art Whetten, a professor at Cornell University, also predicted a strike, expecting it to start first at Stellantis, where the differences are greatest, and then expand to Ford and GM.

The UAW has never conducted a simultaneous general strike against GM, Ford, and Stellantis. In the previous 2019 negotiations, there was only one strike targeting GM.

Sean Payne, former president of the United Auto Workers (UAW)
[Image source=AFP Yonhap News]

The union has presented demands centered on a wage increase of up to 40% for union members, citing that the Big Three companies have made significant profits over the past four years and that CEOs have received enormous compensation. Other demands include the introduction of a 32-hour workweek, increased retirement pensions, improved welfare benefits, and better wage structures for new hires.

In response, Ford has proposed a 9% wage increase and a one-time lump-sum payment, and the Big Three companies have made other offers to narrow the gap, but foreign media report that negotiations are progressing sluggishly.

On the 31st of last month, the UAW filed unfair labor practice charges against GM and Stellantis. The UAW claimed to the National Labor Relations Board (NLRB) that the two automakers had not engaged in good-faith negotiations regarding wages and benefits over the past six months. GM and Stellantis denied the unfair labor practice allegations.

The UAW has about 150,000 members. If the union actually goes on strike, it will inevitably deal a blow to the U.S. automotive industry and the U.S. economy. The U.S. consulting firm Anderson Economic Group estimated that if simultaneous strikes occur, GM, Ford, and Stellantis could suffer a combined loss of $989 million (approximately 1.3 trillion KRW) over ten days.

With the U.S. presidential election next year, President Joe Biden is closely monitoring the negotiation process. Last month, Biden said, "The UAW deserves a contract that maintains a middle-class standard," and instructed the entire government to support the union. This was a move to secure union votes. If a strike occurs, it is also possible that President Biden will personally intervene.

Meanwhile, if the UAW initiates a strike, South Korean electric vehicle battery companies operating in the U.S., such as Hyundai Motor, Samsung, SK, and LG, will inevitably be affected. The negotiation includes key issues related to improving working conditions for workers at electric vehicle battery plants.

NYT reported, "These negotiations are taking place amid a rapid shift to electric vehicles, which require fewer workers on the production line," adding, "The new contract terms will determine how workers and companies will coexist in an electric vehicle-centered automotive industry."

This content was produced with the assistance of AI translation services.