Posted September 18, 2023
Many media accounts of the UAW contract demands emphasize a wage increase of 40% to match those of the Detroit Three’s CEO’s 2022 benefits. Another demand is to restore the cost-of-living adjustment (COLA) that was stolen from workers who were expected to contribute to the companies during the 2008-09 financial bailout of GM and Chrysler — as if they had somehow been responsible FOR company decisions. (Ford didn’t seek the bailout but demanded the same sacrifices on the part of its workers.)
Other media accounts have explained that that these demands would lead to higher prices for vehicles. However, they fail to investigate whether CEO packages might have done so earlier.
The lesson is that the Detroit Three’s huge profits — totaling $20.7 billion in the first half of 2023 — are okay as long as they are paid out to CEOs and stock buybacks but not if they figure into workers’ wages and benefits. Last year, Ford’s CEO Jim Farley received almost $21 million in benefits, 281 times what the average Ford worker brings home. Mary Barra, GM’s CEO, was awarded almost $29 million for her “work” last year, which when viewed as a ratio to the wages of an average GM worker is 362 to 1; Stellantis’s CEO, Carlos Tavares, raked in $28.8 million — a 365 to 1 ratio.
Hidden in all this discussion is the percentage of the labor cost. Perhaps the public assumes labor must amount to a third of the total cost of production. In reality, it slipped from the seven percent it used to be to four or five percent today. How did that decrease occur?
While it’s true that the failure to increase wages and the elimination of COLA means that wages at the Detroit Three buy 19.3% less than 15 years ago, an even greater source of profit is the extensive use of temporaries (called “supplementals” at Stellantis) and a multi-tiered work force. The previous UAW leadership accepted these concessions on the grounds that this would “save” jobs.
In fact, 65 plants have been shut down with more on the chopping block. In the current round of bargaining, Stellantis, having recently “idled” the Belvidere plant, wants the union to agree to the company eliminating another 18.
As important as wages and COLA are in the current contract talks, it is the systemic problem of a unionized work force with huge wage and benefit disparities that is the number one issue for autoworkers. Disparity through the creation of tiers means that the person working next to you earns significantly less than you do and has fewer benefits. This fundamental lack of equality disturbs both new hires and long-term workers. The essence of an industrial union like the UAW is ensuring the fundamental equality of wages and benefits throughout the work force. Yes, some jobs earn a bit more, but they are jobs available to those who bid on them — and they don’t come with different benefits.
The union’s demand is that temporary workers become permanent after 90 days (the rule when I was hired at a Ford plant in 1979) and that there are no differences once one becomes permanent. Currently temporary workers are strung along, forced to work overtime in order to hopefully land a permanent job. But this may take years!
Then, once hired, the permanent worker goes through a series of ladders in order to reach top pay after eight years but can never have post-retirement health care benefits or a defined pension.
The attitude of the Detroit Three going into these contract talks has been a willingness to increase wages and offer a large signing bonus. They are even open to the idea of some kind of minimal inflation protection, preferably another bonus. They particularly like bonuses because it doesn’t increase the base wage rate.
The focused strike at one of each of the Detroit Three plants demonstrates the willingness of the UAW to exert power to demonstrate its determination to end tiers. By letting the contracts expire instead of extending them, the threat is to expand the strike across the entire Detroit Three workforce. That’s the meaning of the Stand Up Strike.