Strike worries overshadow Detroit Auto Show

Strike worries overshadow Detroit Auto Show

Led by its new president, Shawn Fain, the United Auto Workers has thus far rejected proposals from Detroit automakers as inadequate
Led by its new president, Shawn Fain, the United Auto Workers has thus far rejected proposals from Detroit automakers as inadequate. Photo: BILL PUGLIANO / GETTY IMAGES NORTH AMERICA/Getty Images via AFP/File
Source: AFP

This week's Detroit Auto Show is meant to showcase impressive new electric vehicles, but the fanfare looks destined to be upstaged by a brewing labor dispute and the increasing likelihood of a strike.

The show, known officially as the North American International Detroit Auto Show, opens to the public on Saturday following media and technology days earlier in the week.

But this year's Detroit gathering -- now mainly a forum for products of the three legacy Michigan automakers -- comes as Detroit's "Big Three" face down-to-the-wire contract negotiations with the United Auto Workers led by its ambitious new president Shawn Fain.

"The labor contract negotiations are on everyone's mind," said Alan Amici, president of the Center for Automotive Research, a nonprofit in Ann Arbor, Michigan. "There's a degree of nervousness in the Detroit area."

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As the two sides have traded proposals and counterproposals in recent days, Fain has made clear his displeasure with Ford, General Motors and Stellantis, reiterating the possibility of a strike at all three companies if there is no agreement by September 14, when the current contracts expire.

The UAW represents about 150,000 workers at the three companies.

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"If we hit 11:59 Thursday without a deal at any of the Big Three automakers, there will be a strike at all three if need be," Fain said Friday night in a webcast briefing.

Fain has said rank-and-file workers merit the same 40 percent pay hikes as enjoyed by the automakers' CEOs. But the latest pay offers from the companies fall well below this level.

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The carmakers have also balked at measures to boost retiree health benefits and reinstate guaranteed pensions for all workers.

Smaller show

Formerly held in January, the Detroit show was rebooted as an autumn event in 2022 with a primary focus on retail consumers, offering a chance to get a closer look at electric vehicles (EVs) expected to become a bigger presence in the years ahead.

Last year's event had few major auto reveals and was skipped by international mainstays of the old January show like Toyota and Volkswagen. But President Joe Biden made an appearance, touting an EV future.

President Joe Biden gave a boost to the 2022 Detroit Auto Show, which has been scaled back from its glory days before the Covid-19 pandemic
President Joe Biden gave a boost to the 2022 Detroit Auto Show, which has been scaled back from its glory days before the Covid-19 pandemic. Photo: BILL PUGLIANO / GETTY IMAGES NORTH AMERICA/Getty Images via AFP/File
Source: AFP

This year's highlights include the Tuesday night launch of an upgraded Ford F-150 pickup, long the top-selling vehicle in the United States.

That will be followed on Wednesday by press conferences with the GM and Stellantis brands (Stellantis was formed by the 2021 merger of Fiat Chrysler and the French PSA group), and by a technology forum on Thursday and a fireside chat with bestselling author Malcolm Gladwell.

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The UAW has not said whether it will hold events near Huntington Place, where the show is being held in downtown Detroit. But the union is expected to remain highly visible as the deadline nears.

Tough talk

Ford was the first to respond to the UAW's demands, offering a nine percent general wage increase plus six percent in one-time bonuses.

Fain said the Ford proposal "insults our very worth," and he rejected a similar offer subsequently released by GM as "insulting."

On Friday, Stellantis released an offer that included a 14.5 percent increase in wages, plus a $6,000 one-time inflation adjustment in the first year of the contract, followed by $4,500 in such payments the following three years.

"This is movement," Fain said Friday night. "We went from nine percent at Ford to 14 and a half percent at Stellantis. That's happening because we're putting on pressure."

But a 14.5 percent increase is "deeply inadequate," he said. "It doesn't make up for inflation. It doesn't make up for decades of falling wages. And it doesn't reflect the massive profits we've generated for this company."

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Given the gulf between the UAW and the companies and the little time remaining, many analysts are viewing a strike as likely, though probably not against all three automakers.

Harry Katz, a professor at Cornell's School of Industrial and Labor Relations, said Fain's "sharp" rhetoric, coupled with the waning hours have made a strike more likely.

But Katz noted that Teamsters President Sean O'Brien had also blasted company officials before reaching a deal with package delivery company UPS that averted a strike.

"There are settlements out there that are better if the parties can find them," Katz said. "But sometimes they don't find them."

Jason Miller, a professor of supply chain management at Michigan State University, said a lengthy strike would reverberate beyond Michigan, resulting in depressed household spending and having ripple effects at auto suppliers that might lay off workers.

The six-week 2019 strike at GM "hurt us a little but we obviously recovered from it," said Miller.

A long strike at all three companies would "have a major negative on the economy of the Great Lakes region and Canada as well."

Source: AFP

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