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UAW Strike Against Detroit’s Big Three, What It Means For Electric Vehicles

Ford CEO Jim Farley says the brand is unwilling to choose between going out of business and rewarding its workers.

UAW Strike

Suvrat Kothari Suvrat Kothari

By: Suvrat Kothari

Sep 19, 2023 at 11:06am ET

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The United Auto Workers (UAW) strike against General Motors, Ford, and Stellantis has come at a critical juncture for the automotive industry, and the ongoing transition to electric vehicles could impact the outcome significantly, a new report states.

Automakers are pouring billions of dollars into manufacturing new EV plants with additional support from government incentives, while also repurposing some of their existing facilities for EV production. And they’re claiming to be losing money in doing so. Ford, for instance, is expecting a $4.5 billion loss on its Model E business unit in 2023.

“It’s all about positioning the union to have a central role in the new electric industry,” said John Casesa, senior managing director at investment company Guggenheim Securities, to The New York Times.

The carmakers said that UAW’s demands would increase the current mid $60 per hour labor cost to over $150 per hour, as per Reuters. As per General Motors, meeting UAW demands would cost the company $100B, while Ford CEO Jim Farley said a 40 percent wage hike would put the company out of business.

Farley told NYT that the brand doesn’t want to have a conversation that “forces us to choose between going out of business and rewarding our workers.”

Read More About The UAW Strike Here:

UAW Boss Says Tesla Workers' Pay "Pitiful," Calls Musk "Greedy"

UAW Union Negotiates Pay Increase Deal For Ultium Battery Workers

Payment hikes are just one part of UAW’s demands. They’re also trying to ensure job security, as newer, less complex manufacturing methods boost EV development. One report suggests that EV manufacturing requires 30 to 40 percent less labor than making gas-powered vehicles.

That said, the Detroit automakers probably cannot afford the production stoppage caused by the strikes, as Tesla and international carmakers continue to expand their EV footprint in the US.

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Tesla CEO Elon Musk could benefit from the ongoing strike, and his company could gain further ground in the EV race in the US, which it is already leading by leaps. Tesla is the only US automaker that doesn’t employ unionized labor. Musk subtly stated in 2018 that Tesla workers would lose their stock options if they joined UAW.

UAW President Shawn Fain announced a new deadline for agreeing on a deal yesterday. He said, “Autoworkers have waited long enough to make things right at the Big Three. We’re not waiting around, and we’re not messing around. So, noon on Friday, September 22 is a new deadline.”

Source: NYT

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