Thousands of auto workers go on strike: What you need to know

Workers at three U.S. auto plants are on strike after the Big Three automakers and the United Auto Workers (UAW) failed to reach an agreement by Thursday night’s strike deadline.

In July, negotiations began between the UAW and Ford, Stellantis and General Motors focused on pay increases, pensions and career security. The workers also have concerns about electric vehicles and how a shift toward EVs could affect their jobs and pay.

“This strategy will keep the companies guessing. It will give our national negotiators maximum leverage and flexibility in bargaining, and if we need to go all out, we will. Everything is on the table,” UAW President Sean Fain told workers during a Facebook Live event two hours before the strike deadline, referring to the selective walkouts.

What workers want

The UAW’s demands include wage increases, cost-of-living pay raises, the end to wage tiers for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, and pension increases for retirees. 

The workers gave up cost-of-living raises and defined-benefit pensions in 2007 and the wage tiers were created before and during the Great Recession to avoid financial troubles.

Auto industry in transition

The strike also comes with the rise of electric vehicles in the American market and a push by lawmakers toward EVs in an effort to reduce the effects toward climate change. The Biden administration has promoted EVs, including a proposal that aims to have two-thirds of car sales be electric by 2032. 

Other efforts by the Biden administration to move the American auto market toward electric vehicles include putting up $12 billion for converting auto manufacturing plants into plants for electric and hybrid vehicles.

Strike could be costly

The strike could get expensive for the auto manufacturers. If it lasts 10 days, it could cost nearly a billion dollars, according to the Anderson Economic Group. When a 40-day strike happened in 2019, it cost GM about $3.6 billion. And with the auto industry making up 3 percent of the U.S. economy’s gross domestic product and the Detroit automakers representing about half of the U.S car market, the economy could face repercussions.

However, manufacturers won’t be the only ones facing economic problems from the strike. Workers would receive about $500 a week in strike pay, much less than they make on the job.

Biden could feel impact from strike

President Joe Biden faces a test with the strike, as he has claimed to be very pro-union as well as very pro-electric vehicle. The president spoke with Fain and leaders of auto companies the day before the strike started. 

The strike has a risk of stifling economic gains and straining ties between the president and the union. The UAW backed Biden’s 2020 campaign for president, but announced in May it would withhold its endorsement for his reelection bid.

The Associated Press contributed reporting.