United Auto Workers Assure Pay Rise for Workers

by Jahnvi Ahuja
United Auto Workers

The employees of the Detroit automobile giants Ford, Stellantis, and General Motors (GM), which have been on strike since September 15 have finally made the automakers accept deals of a favorable pay rise. The striking workers, led by the United Auto Workers, an American labor union representing workers of the United States of America, struck successful deals of pay rise with the companies. It thus ended the 6-week-long strike that had paralyzed the automotive industry. The union confirmed that it had reached tentative agreements with the big three automakers in Detroit, pending ratification by the union members of the respective companies.

United Auto Workers – An Umbrella Organization

Although the organization’s name might make it appear as if the labor organization represents workers of the automotive industry only, the fact is entirely different. The labor union is an umbrella organization that represents the entire labor force of the United States and provides a platform for collective bargaining. People also recognize the organization as UAW, an acronym of the organization’s name. However, more is needed to understand the extensive coverage provided to workers nationwide. On a closer look at the organization’s full name International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, it becomes easy to understand that it is the only labor union for all workers in the country and southern Ontario, Canada.

What Led to the Strike?

The strike resulted in the expiry of the union’s previous contracts with the Detroit-based automobile giants, as the companies needed to show more interest in fast-tracking negotiations for fresh contracts. To pressurize the companies, the union deployed the strategy of ‘standup strike’. They added factories to its action whenever the situation demanded based on the outcome at the bargaining table. When the strike peaked, it included 46,000 workers from 40 factories since the first batch of workers walked off the shop floor on September 15.

That the strike continued for 6 weeks bears testimony to the companies’ reluctance to arrive at some quick settlement despite incurring huge losses. Since the union was hell-bent on achieving their goal of a significant pay rise for workers in the new contracts along with other financial benefits. This would cost the companies quite a good sum of money, they needed more time to give in to the demands easily.

Ford and Stellantis Struck the Deals First

Hectic discussions and bargaining between UAW and the companies through October reached a conclusive stage at the end of October when Ford and Stellantis approved tentative agreements subject to voting by the members. It signaled the end of the strike at the different units of these companies, but General Motors (GM) was still not ready to reach a fair deal. Issues related to temporary workers and retirement benefits posed hurdles because GM had more retirees than Ford Motor Company and Stellantis and would have to shell out more money than its rivals to reach a fair deal. Workers at Ford and Stellantis won a record 25% jump in wages in the new contracts with a validity of 41/2 years.

Stellantis Deal

Ford Motor Company was the first to reach an agreement with the UAW and end the strike in the company’s various units. The agreement provided a template that helped Stellantis expedite their agreement with the union. The deals would benefit workers with cumulative pay hikes exceeding 33% by factoring in the cost of living and compounding. The initial increase would be 11% with incremental hikes in the following years. Stellantis was upbeat about signing the deal that signaled immediate work resumption by 43,000 employees and allowed the company to build some of the most profitable and best-selling vehicles.

GM Signs the Deal at Last

After dragging their feet for 6 weeks, GM finally reached a tentative agreement with the union at the fag-end of October. Although details of the agreement are unavailable, and the approval by the GM’s union members is pending, the broad understanding is that workers’ hourly pay would go up by 25%. In addition, the company would pay cost-of-living allowances to workers during the next 41/2 years, the validity period of the agreement. Over and above the numbers mentioned in the contract, workers would receive up to $70,000 in additional pay.

We now await a formal statement from United Auto Workers to call off the strike at GM’s units.

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