United States: Car workers’ victory a big step forward for labour

November 4, 2023
UAW picket
Photo: UAW.org

Shawn Fain, President of the United Auto Workers (UAW) announced on October 30 that the union would suspend its six-week strike against the “Big 3” auto giants in the United States, after the parties reached tentative agreements.

If UAW members vote up the agreements with Ford, General Motors (GM) and Stellantis over the next three weeks, the strike will be over. If the workers vote them down, the strike will continue.

The UAW’s “Stand Up” rolling strike scored its first victory when the UAW settled with Ford on October 25. This pressured Stellantis and GM to quickly agree to similar terms.

The UAW has 57,000 members at Ford, 43,000 at Stellantis and 46,000 at GM.

The Ford agreement has a four and a half year lifespan and includes an immediate pay rise of 11%, increasing to 25% over the life of the agreement.

United States President Joe Biden hailed the agreements on October 30, praising the UAW, and the importance of unions to the economy.

Key gains

While all the union’s demands were not won, there are many significant gains and — importantly — no concessions or trade-offs.

In their 30-page summary of the Ford agreement, Fain and UAW’s Ford Department Vice President Chuck Browning said: “[T]his contract will change lives. Our lowest-paid members will see a 150 percent raise through this agreement. That’s not a typo.

“This wasn’t a backroom deal hammered out by the President or Vice President … everyone played a role in securing this victory.

“We went into this round of bargaining with the goal of addressing decades of concessions and givebacks. We know that the Stand Up Strike will go down in history.

“For months we have insisted that ‘Record Profits Mean Record Contracts,’ and after standing together, we made good on that demand. While we may not have won everything we wanted, we won more than most people thought was possible.”

Fain and Browning outlined the improvements in pay, saying: “Temps hired this year at $16.67 [A$25.92] will earn over $40 [A$62] per hour in base wages by the end of this agreement, over $42 [A$65] an hour with estimated COLA [Cost-Of-Living-Allowance].

“With COLA, by 2028, we’ll have a top rate of over $42 [A$65] an hour for production, and over $50 [A$77] for skilled trades, an over 30 percent raise.

“By the end of this agreement, our starting rate will be pushing $30 [A$46.65] an hour with COLA, nearly a 70 percent bump from today.”

Wage hikes

In their previous agreements, which ran from 2019‒23, workers at the Big 3 received a 6% wage rise each year.

Under their new deal, Stellantis employees will see an immediate 11% rise in pay.

Hourly pay at Ford will jump from $32.05 to $42.60 for assembly-line workers and from $36.96 to $50.57 for skilled trades employees, according to the preliminary contract.

GM employees will also get a 25% rise, lifting the top wage to more than $42/hr including the COLA. The starting wage will jump to more than $30/hr including COLA.

Newly hired factory workers in the Big 3 will also start earning the companies' top wage more quickly. For example, full-time employees will make the top pay after three years on the job. Under the previous contracts, it took workers eight years to reach the highest tier.

Cost of living adjustments

At Ford, cost of living adjustments will now be based on a three-month average of changes in the consumer price index, with workers set to receive their first COLA payment in December.

Specifics on GM and Stellantis' COLA payments were not released, but are likely to be similar.

Carmakers stopped offering COLAs in 2007 to save cash as the companies ran into financial headwinds shortly before the housing crash and Great Recession. Workers’ concessions saved the companies from bankruptcy.

Two-tier wage system eliminated

The UAW convinced automakers to abolish the two-tier wage system they adopted in 2007 — as the companies struggled financially. This was a key demand given that employees hired after 2007 could earn less than half the pay for doing the same work as their longer-serving co-workers.

Like the deals at Ford and Stellantis, the tentative agreement at GM would provide 25% wage hikes over four and a half years, as well as COLA.

It also provides permanent jobs for temporary workers and boosts retirement income, including 401(k)/retirement account contributions.

Like the other carmakers, GM agreed to provide a pathway for workers at its electric vehicle (EV) battery plants to reach wage parity with other UAW members at GM.

UAW leaders had feared the transition to EVs would mean fewer jobs, or lower-paying jobs.

There's also money for GM retirees, and the company “agreed to make five payments of $500 to current retirees and surviving spouses, the first such payments in over 15 years," said Fain and Browning.

The employers’ mouthpieces are not happy. The Wall Street Journal cautioned on November 1: “UAW Deal Shows Unions Are Winning. How Long Will It Last?”.

The WSJ acknowledged that the UAW’s victory “mark[s] the latest union victory in a year of multiplying strikes and sizable gains in a robust labor market”.

Although Fain didn't deliver on all of his demands, which included a 32-hour week, Lynne Vincent, a business management professor at Syracuse University told the WSJ the UAW's hardball tactics appear to have “paid off”.

Fain, who would occasionally wear “camo” or a T-shirt that said, “Eat the Rich”, devised a militant strategy to strike all three auto makers at once and expand the strike without warning.

This won him support among the rank and file.

Three key lessons

What can we learn from the new militancy in the UAW?

Jane Slaughter, a long-time union activist and socialist, and a co-founder of Labor Notes explained in Jacobin: “One lesson is that member power does not have to start from a supermajority: that’s unlikely.

1. Reform caucus challenges for leadership

“UAW members are on strike today, with inspiring levels of rank-and-file energy, because four years ago a small group of activists founded a new reform caucus. That caucus, Unite All Workers for Democracy (UAWD), boldly took advantage of an unexpected opportunity, organized like crazy, won elections, and went on to lead the union.

“Their international president consistently hammers home the message that the UAW’s fight this fall is a fight for the whole working class.

“If UAWD had not existed and organized hard, this current fight that has so much potential to change the stakes for the entire labor movement would not be happening.”

She continued:

“When the Justice Department began investigating the UAW for corruption, a few longtime activists saw the opening. In 2019, they founded UAWD and began a campaign — which seemed quixotic at the time — to change the UAW’s constitution so that members could vote directly for top officers. Since the union’s founding in the 1930s, convention delegates had chosen the officers. From the 1940s until this year conventions were tightly managed by the aptly named Administration Caucus, founded by Walter Reuther.

“The process for amending the constitution is byzantine, but in a short time UAWD was approaching its goal of getting the required fifteen locals representing 79,000 members on board to call a special convention. Then COVID-19 hit, canceling local union meetings and closing plants.

“UAWD rebounded, though, and was soon making its views known to the Justice Department: the way to clear out corruption was to let the members vote.

“Eventually the Justice Department’s monitor said he would let UAW members decide whether they wanted to decide. In fall 2021, they voted whether to keep the old convention system or switch to one-member-one-vote. Turnout was light — only 14 percent of the 400,000 members and 600,000 retirees, indicating both the high degree of member cynicism and the sorry state of the union’s address book — but the direct elections option won with 63.6 percent.

“They got UAWD members elected as convention delegates and managed to turn the 2022 convention from a ceremonial snooze fest and rubber stamp to a locus of debate. The convention raised strike pay and had it start on a strike’s first day instead of its eighth — ensuring the union’s $800 million strike fund could be used to make the decision to strike less painful for members.

“UAWD, which by this time included both factory workers and members from the union’s newer highered locals, then nominated seven people for a slate called UAW Members United to run for the fourteen-member executive board. Again, members campaigned hard, taking road trips around the Midwest and holding Zoom events in addition to all their other tactics.

“At this point, the Administration Caucus woke up and threw everything it had into holding on to the presidency. Fain was finally elected by a slim margin in March 2023 and sworn in just hours before the union’s scheduled bargaining convention.

“UAWD did not represent a supermajority of the members and only a bare majority of those who voted. Yet Fain and his allies on the board and in the rank and file believed they could win over and activate members who had been uninvolved, skeptical, or even despairing about their union. Most had never been part of the UAW when it made much sense to come to a meeting.

“The results have been stunning. Members at the Big Three, whether they voted for UAWD or for no one, are thrilled that their president is actually sharing the union’s demands, speaking to them regularly via Facebook Live (and responding in real time to comments in the chat), and calling out the CEOs who make up to $14,000 an hour, with class-struggle language seldom heard outside a Bernie Sanders rally.

“The excitement on the picket lines and the creativity of the slogans and tactics members are inventing haven’t been seen in the union in many decades. Members have rediscovered respect for their union and for themselves as autoworkers and union members.

2. Seize the opening

“That brings up a second lesson, which is for workers to grab their chance even if they’re not completely ready. In a perfect world, UAWD would have grown through the years to represent a majority of well-organized members, proving itself through practice at the local level. Instead, a random corruption investigation, initiated during the Donald Trump years, changed everything.

3. Developing workers into organisers

“Lesson three, then, could be that it’s worthwhile to keep the spark of reform alive even when it’s tiny…

“Now UAWD is helping workers develop into organizers. It’s shown them how to call ten-minute meetings in their plants and how to organize practice pickets, flying squadrons, and overtime refusals. Leaders are well aware that despite the tremendous victory of winning at the top, their work to transform the union is just beginning. We can learn from UAWD how to seize the moment. Reform caucuses are an essential part of a winning labor strategy.”

The challenges remain as the auto bosses will push back. The Fain leadership team has announced plans to support organizing at the non-union plants such as Tesla in California, and the European and Asian auto makers.

Toyota recently announced after the settlements, it would give its production workers a $3 an hour wage increase.

Expectations high

The UAW victory gives the rank and file everywhere more hope and higher expectations to win good contracts and organize their own unions.

Unions only represent just 6% of private-sector workers, according to the Labor Department.

Fain is now calling on other unions to have their contracts expire on the same day as the UAW’s — April 30, 2028 — “so that together we can begin to flex our collective muscle”.

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