United Auto Workers Strike: How Will This Impact Consumers?

The United Auto Workers are striking against three of the largest automakers; Ford, General Motors and Stellantis, according to CBS News. These strikes are primarily happening in Detroit, but are affecting supply chains elsewhere. The UAW is also talking about encouraging strikes at other plants, if their demands are not met soon enough.

"The price of vehicles went up 30%. In the last four years, CEO pay went up 40%. In the last four years, worker pay went up 6%. We're not the problem," UAW President Shawn Fain said on Good Morning America.

UAW’s Demands

1. Pay increases and cost of living adjustments: The UAW is asking for a 36 percent pay increase across a four-year contract, according to CBS News. The UAW also wants to reinstate annual cost of living adjustments.
2. End of wage tiers: The UAW wants to end the two-tiered wage structure. Under that structure, the top tier workers (anyone hired before 2007) are paid around $33 per hour. Lower tier workers (anyone hired after 2007) earn around $17 per hour, according to CBS News. Lower tier workers also miss out on pensions and have worse health benefits, CBS News says.
3. Defined pension plans: UAW workers who were hired after 2007 do not receive defined benefit pensions, according to CBS News. The UAW wants all workers to receive defined benefit pensions.
4. Four-day work week: The UAW is also asking for four-day work weeks and more time off, according to CBS News. The four-day work week would entail working 32 hours for 40 hours of pay.
5. Right to strike: The UAW wants the right to strike over plant closings, CBS News says. Ford, General Motors and Stellantis have closed 65 plants in the last 20 years, according to the UAW. The UAW is also asking that they be allowed to represent workers at electric vehicle battery factories.
6. Retiree health care: The UAW also wants a return of retiree health care, which is available for employees who were hired before 2007, but not for those hired since.
7. Limit use of temporary workers: The UAW is hoping to end the “abuse” of temporary workers, who are hired under the lower tier pay and benefits.

Assembly Plant Idles

Strikes at Ford, General Motors and Stellantis could cause other assembly plants to idle, basically meaning temporarily shutdown. Normally when a plant is idle, workers are still paid. However, since this would be caused by the strike, Ford and General Motors are saying they will not pay, according to the Associated Press. 

Effects on suppliers and the supply chain

Strikes in the Auto Workers industry will have a ripple effect, if not ended soon. The trucking industry and smaller suppliers could feel the strikes hardest, according to Freight Waves. There have already been an uptick in rescheduled trucking shipments from Mexico to the US, according to Freight Waves. 

According to the US Chamber of Commerce, Ford, General Motors and Stellantis have 5,600 suppliers and more than 690,000 supplier jobs tied to them.

The decrease in parts moving out of plants will have an effect on dealerships across the world, according to Freight Waves. UAW plants make parts for American and foreign cars. As the supply of auto parts begins to dwindle, repairing cars could become more costly, or impossible. It would take weeks for consumers to feel the effects of the strike, according to Freight Waves.