Labor leader Walter Reuther has been dead since 1970, but his ghost has come back to haunt GM, Ford, and Stellantis. The UAW could strike the auto companies as early as mid-month. Eventually, this will empty showrooms, particularly of the most popular models. The actions could cost the car companies hundreds of millions of dollars. Here is a look at the states with the strongest and weakest unions.
The UAW wants workers to have a total wage increase of 46% over four years, which is a remarkably aggressive number. They also want 32-hour workweeks. Either of these, or both together, would cripple the car company’s margins, which makes a union deal the lesser of two evils.
A strike would hit the car companies during good and bad times. Car company profits are solid. However, they are launching fleets of EVs, which they think will be the future of their companies. (These companies have the worst reputations.)
A delay in EVs would be costly and would give sales leverage to EV giant Tesla, which does not have unions to contend with. Tesla has started to drop prices. The legacy car companies will need to do this as well. The Big Three face margin compression from Tesla’s activities, just as the unions pressure them with higher costs.
Detroit may not survive in its present form despite the belief that it is at the start of a renaissance. EVs have been an expected challenge and a large and risky one. Labor’s resurgence, at least at the current level, has not.
The Big Three may become the medium-sized three.
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