A few weeks ago we looked at the (at the time) impending auto worker strikes. Now that it’s all over and the dust has pretty much settled, let’s take another look and see what happened.
Here are Five Fast Facts about the end of the auto worker strike:
- 🔑 Key Leverage - The UAW applied an innovative new approach - progressive and strategic walkouts after each round of unsuccessful talks. This helped keep production rolling juuuust enough to prevent price spikes (which would have put the blame squarely on the strike). This added huge pressure to the automakers with relatively little pain on the workers to increase leverage…and it worked. After 46 days, around 40 plants and almost 50,000 workers had walked out, the automakers gave up, and new contracts were inked.
- 💰💰💰 New Union Member Benefits - Workers got pay raises and benefits, driving up the top pay rate to about $42 per hour over the next five years. They will also get cost of living adjustments and a shorter path to that top pay rate; temp workers also got a 150% pay increase. Overall, the average increase was about 30%. In comparison, union worker pay increased by 23% in the 20 years before that! Hey, yeah, can I get a 30% pay raise?!
- 📈 The Cost To Car Companies - Even without a complete shutdown, the automakers still took a huge walloping to the bottom line. Together, Ford, GM, and Stellantis have lost somewhere in the range of $2-3 billion over the last few weeks from lost production. 😖
- 📈 The Cost To Everyone Else - The cost in lost wages, supplemental purchases by employees, and the economic impact to the country at large is estimated to be over $10 billion. Well, at least it happened when the economy is roaring and prices are low…oh wait…
- 🤯🤦♂️ Impact To You - The big question for most people outside the car industry is how much this will cost us when we buy our next car. Bad news: the long term cost of the new contracts are expected to cost the Big 3 at least $6 billion each, which translates to almost a thousand bucks per car. But don’t worry, they won’t pass along those extra costs to consumers. No, no, of course not.
🔥Bottom line: The final step is for union members to ratify the new contracts. It is expected that all three will be approved pretty quickly. This is a great thing for those workers, obviously. But it does raise some serious questions about the impacts on everyone else. Car prices are already out of control, and this won’t help anything. It also makes you wonder about the viability of unions to keep operating in these large companies unchecked - at what point will they demand so much money and so many benefits that the company folds completely? When that happens literally everyone loses.
What do you think of the strike and its results?
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