Ford and GM Battle Labor

By Douglas A. McIntyre Published Sep 2, 9:03AM EDT

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Ford and GM Battle Labor — © Tramino / iStock Unreleased via Getty Images

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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.