The battle between Detroit automakers and the United Auto Workers, which escalated Friday with targeted strike action in three locations, is taking place amid a technological revolution that has never been seen before. This poses huge risks to both companies and unions.
While traditional automakers continue to make most of their profits from gasoline-powered cars, the strike is a result of their investment in developing electric vehicles. Negotiations will determine the power balance between management and workers for many years. The strike is, therefore, as much about the future of the industry as it is about wages and benefits.
Tesla and other automakers are putting up a stiff fight to keep their market share and profits. Analysts and executives have described the current technological revolution in the auto industry as the largest since Henry Ford introduced his moving assembly line at the start of the 20th century.
Nearly 13,000 U.A.W. Workers at three plants, in Ohio, Michigan, and Missouri, walked out of their jobs on Friday. Three separate talks between the unions in Ohio and the automakers failed to produce an agreement before the deadline set for Thursday. Pay is the main sticking point: the union wants a 40 percent increase in pay over four years, but the automakers only offer about half that amount.
The talks go beyond pay. Workers are fighting to keep their jobs as manufacturing shifts away from internal combustion engines and towards batteries. Electric cars are easier to make because they require fewer workers. A positive outcome for U.A.W. The union would have a powerful calling card as well if it, as many expect, then tried to organize workers at Tesla and non-union carmakers such as Hyundai, who are planning to manufacture electric cars at a new massive factory in Georgia.
John Casesa is a senior managing director of Guggenheim Securities and former Ford Motor strategy head.
“It is unspoken,” Casesa said. “But in reality, it’s about positioning the union as a key player in the new electrical industry.”
Ford, G.M. Ford, G.M. They are not making much profit from these vehicles, while Tesla, the leader in electric car sales, is profitable and growing rapidly.
Ford announced in July that it would be losing $4.5 billion in its electric vehicle business this year. The company stated that if the union received all of the benefits, pensions, and pay increases it seeks, its employees’ total compensation would double Tesla’s.
