September 12, 2023
SIU Professor: UAW strike could have ramifications far beyond auto unions
CARBONDALE, Ill. — The clock is ticking for a potential strike as United Auto Workers contracts with Detroit’s Big Three automakers are set to expire Thursday that could slow down hundreds of thousands of workers and lead to ramifications far beyond, said Gregory DeYoung. . Southern Illinois University Carbondale Associate Professor of Operations Management.
The UAW’s agreements with General Motors, Ford Motor Co. and Stellantis represent about 146,000 unionized auto workers. UAW President Shawn Fain has threatened a strike against all or all if a deal is not reached by the contract expiration deadline of 11:59pm Thursday night.
A 40-day UAW strike in 2019 cost General Motors alone $3.6 billion, and Anderson Economics Group recently estimated that a 10-day strike against the Big Three could cost at least $5 billion.
“Automakers are operating with very limited inventory, as are most of their suppliers,” De Jong said, noting that these numbers do not take into account the ripple effects and economic impact of the closure on related industries and the economies of surrounding regions. In places like Michigan, where there are many factories.
“A strike at assembly plants would cause suppliers to shut down very quickly because the system was not designed to hold the inventory that would be created if suppliers continued to produce while assembly plants were closed,” De Jong said.
Gregory DeDeyong, associate professor of operations management at SIU Carbondale, can be reached at firstname.lastname@example.org.
This means that thousands and thousands of workers in other related industries are likely to become unemployed if auto plants close their doors, he said. In part, the impact will depend on whether the strike is general, against all three automakers, or focused on just one or two.
“The general strike will be felt more deeply and widely given that many companies are suppliers to more than one of the Big Three,” De Jong said. Losing business from one automaker would hurt those suppliers, but losing business from all three would be devastating.
The UAW demanded a 40% pay increase, an end to graduated pay, a 32-hour week with 40 hours of pay, cost-of-living adjustments, and the reinstatement of pensions and other benefits. Union officials say the big three made a combined profit of $21 billion in the first half of 2023 while car prices have risen 30% over the past four years and CEOs have made millions of dollars a year in compensation.
Senior assembly workers currently earn more than $32 an hour and full-time workers receive profit-sharing checks ranging from just over $9,700 at Ford to more than $14,700 at Stellantis. However, temporary workers start at less than $17, and the union has for years given up on overhead wage increases and cost-of-living wage increases to help companies control costs.
“The UAW’s relationships with automakers are traditionally quite confrontational, and recent statements from the union do little to raise hopes for a more accommodating relationship this time around,” DeYong said. “Recent union contract agreements have, by and large, led to significant pay increases for union members at UPS, railroad workers, etc., in response to several years of high inflation. Of course, the climate for wage increases has contributed to inflation as well, so it’s a self-inflicted cycle.” Sustainability to some extent.
He notes that in recent days, the Big Three have made incremental improvements to their offerings, but union representatives are calling for more radical changes.
He added: “With only two days remaining before the strike deadline, it is difficult to see how an agreement will be reached in time.”
DeYong has personal experience as well as professional knowledge in supply chain management. Before becoming a member of the faculty, he worked as an Import and Export Manager where he was responsible for approximately $100 million worth of products annually. DeYong is currently working on establishing a Center for Supply Chain Management and Logistics within the College of Business and Analytics.