America’s big car firms face lengthy strikes
The car industry faces unprecedented upheaval as the importance of the internal-combustion engine, which has defined it for more than a century, declines and that of battery power, which will define its future, rises. The latest reverberation of this historic shock is now rippling through the four-yearly contract negotiations between Detroit’s “big three” carmakers and its biggest trade union. On September 15th, for the first time ever, members of the United Auto Workers (uaw) began simultaneous industrial action against Chrysler, General Motors (GM) and Ford. (Chrysler is part of Stellantis, whose biggest shareholder part-owns The Economist’s parent company.) The union’s tactical change foreshadows a protracted stand-off, the stakes of which are high for the union and the carmakers alike.
In the past the UAW renegotiated its contract with one of the big three, with the other two usually falling into line with any agreements. In 2019 the renegotiation happened at gm, which reached a deal with the union only after a six-week strike by 48,000 workers had cut production by 300,000 vehicles, costing the company $3.6bn in net profit. Even though this time the industrial action is affecting all three companies, it is more targeted. The three factories affected so far together employ only 13,000 of the uaw’s 146,000 members who work at the Detroit trio. As a result, reckons Evercore isi, a bank, only up to 20,000 vehicles might be lost in the first week of the strike.
That could change if the talks do not move fast enough. The uaw has threatened to tighten the screw considerably if no progress is made by September 22nd. In particular, extending the strikes to factories making engines could result in 150,000 unmade vehicles a week, because other plants that depend on powertrains are also forced to stop production. Hitting the manufacture of lucrative pickups would inflict even more duress on the companies. The…
2023-09-20 14:21:27
Post from www.economist.com
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