Unprecedented UAW Strike, Where’s It Headed? Keep Em Guessing Says Fain

By Mish Shedlock of MishTalk
Friday, September 15, 2023 5:29 PM EDT

Image from Tweet below.

Unprecedented in 88 Years

Motorists in the above video are cheering for higher prices and more inflation.

Why a big decline in August production ahead of a strike?

What’s Next?

Start Small and Keep ’Em Guessing

The Wall Street Journal comments on the UAW strategy: Start Small and Keep ’Em Guessing

The United Auto Workers union’s strike at three factories Friday represents a show of force that, while more restrained than some expected, sends a signal to the Detroit car companies that actions could escalate if talks drag out.

The move also is a major test for UAW President Shawn Fain. He is under pressure to get a deal done, while not running down the union’s strike fund, which pays picketing members. He also must meet auto workers’ high expectations, which he has helped stoke since taking the top office.

The action could have been more disruptive, and some analysts were surprised the union didn’t target the more lucrative, full-size pickup truck factories or critical parts plants, both of which could have dealt a more sizable blow.

Fain has contended the union is only getting started. The longer the negotiations continue, he has said, the more factories it plans to target, staging a series of sporadic walkouts to be executed with little notice and intended to scramble the car companies’ production plans.

The mood was mostly jubilant at the plants, punctuated by chants, loud music and blaring car horns. At one factory, “no deal, no wheels” became the rallying cry. 

Biden urged the two sides to reach an agreement and offered a message of solidarity with the workers. The president said that while the auto companies have “made some significant offers,” he believed that “they should go further to ensure record corporate profits mean record contracts for the UAW.”

Big Buffoon or Genius?

Time Will Tell the Winner

There are two definitions of win, short-to-midterm and long term.

The long term view is easier to state. GM and Chrysler (now Stellantis) already went bankrupt once over untenable wages and benefits. It could easily happen again. And If the bondholders (not that I feel much sympathy for them) were not totally screwed in the last settlement, it would have been much worse for the unions.

Short term, I suspect everyone loses, but Fain and the UAW will temporarily cheer.

Record profits said Biden. Lovely. Then what? Then a preposterous deal, then bankruptcy?

UAW Demands

  • 32-hour workweek
  • 46 percent pay raise over 4 years
  • Right to strike over plant closures
  • Increased retiree benefits
  • Defined pension plan for all workers
  • Cost of living adjustments

Bloomberg estimates the UAW demands would add $80 billion to costs.

Saving Grace

The saving grace for excessive private union demands is bankruptcy. And that’s precisely where this is headed if the union gets what it wants.

Unfortunately, there is no savings grace for public union excessiveness in many states where union leaders are in bed with corrupt politicians. Taxpayers pay through the nose.

Public Unions Have No Business Existing: Even FDR Admitted That

For discussion of the vast difference between public and private unions, please see Public Unions Have No Business Existing: Even FDR Admitted That

More By This Author:

Industrial Production Rose 0.4 Percent In August From Negative Revisions
Retail Sales Surge 0.6 Percent But Struggle To Keep Up With Inflation
Real Median Household Income Is Another Measure That Smacks Of Recession

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment advice. All site content, including ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments