How long could the UAW strike last? Here's how much strike pay the union has saved
DETROIT (FOX 2) - The UAW strike expanded on Friday as union President Shawn Fain called on United Auto Workers at 38 plants in 20 plants to drop their tools and walk off the job to join the picket line.
The strike is a week in and there's little sign of it slowing down. Fain announced the expanded strike at the 38 GM and Stellantis plants. Ford was spared, for now, due to ‘significant progress’ in the negotiations – but that may not last.
UAW strike update: These plants are joining the picket line Friday
The union initially was asking for a 46% pay raise, a 32-hour work week with 40 hours of pay, the tier system removed, and restoration of traditional pensions for new hires, among other demands. However, the union said it is now willing to accept a pay raise percentage in the mid-30s.
However, the union is on strike at just three automakers. There are at least 11 other carmakers in the U.S. but they don't employ UAW members. In fact, just a little more than half of all cars sold in the U.S. are union-made. What does that mean for the union and the strike?
We sat down with WWJ Auto Analyst John McElroy to get an answer to some of the biggest questions about the strike.
How many cars in the U.S. are UAW-made?
There are over 150,000 UAW members in the U.S. at Detroit's Big Three – but at the foreign plants, they make millions and employ over 100,000 auto workers who are not part of the UAW. They pay less than Ford, GM, and Stellantis – which means their profits are larger.
"It means the Detroit Three have significantly higher labor costs than most of their competition in the United States, as a result, the foreign automakers operating in the U.S., have nearly 60% percent of the U.S. market,"
60% of all cars sold in the U.S. are not made by UAW but McElroy said it has nothing to do with whether or not the car is union-made.
"The vast majority of people who are buying new cars in the U.S. are not buying UAW cars," he said. "The public doesn't mind buying union-made cars. They just happen to like Toyotas and Hondas and BMWs and Mercedes better than what the domestics offer them."
Could the UAW expand to foreign-made cars?
The UAW has drawn a hard-line in the sand, demanding pay increases over the next four years and a 32-hour work week. If the UAW gets their way, does that mean Fain will add members? McElroy is skeptical.
"The UAW has been spectacularly unsuccessful at organizing any of the transplants. They've been in the country for 40 years, the union has tried multiple, multiple times over the years to unionize them and they will not go with the union," McElroy said.
The union's history of corruption is keeping them away, McElroy says, and that's unlikely to change, regardless of who is in charge.
"The reason why these American workers at the foreign transplants that are operating in the United States that have not gotten with the UAW is that they look at the corruption that's been there," he said.
But McElroy isn't convinced that this current fight from the UAW will entice those workers to join the UAW.
"That's something that is a duty of his an obligation of his is to go out and organize the transplants, because if he puts the Big Three at a competitive disadvantage, much more severe than it is now, that's a threat to his jobs, his member's jobs," McElroy said.
The Big Three's true profit margins
Fain has railed against Ford, General Motors, and Stellantis, claiming that the three have had record-setting profit. On Friday, during the most announcement of plants to strike, Fain said that the union's motivation for the bigger contract is based on record-setting profits. But McElroy said that he's only focused on profit in North America.
"Sean Fain has focused in on North American profits only for the Detroit Three, and they've had some pretty good years here, no question about it. But that's North American profits. When you look at the total company, they're not doing so great. Yes, they're making billions of dollars. But Ford's profit margin, for example, is only 5%. GM's is 6% over the entire company," he said.
UAW president Shawn Fain calls on 38 GM, Stellantis plants to strike in 20 states
In the U.S., however, that number is higher, despite the fact that less than a third of buyers are getting union-made cars.
"The big three are not making so much profit in the grand scheme of things. Their stock prices have gone nowhere. GM and Ford stock prices for the last decade have gone nowhere. Wall Street doesn't like these companies. They're not nearly as profitable as Sean Fain makes them out to be. If they were, their stock prices would be through the roof," McElroy said. "I think it's misleading to his members in that they think these companies will always sell millions of vehicles, that they're always going to make billions of dollars in profit, and that they're always going to be around forever. I'm not sure that's something that you can bank on."
Fain is ‘cherry-picking’ his data, McElroy says, and that they have a large segment of specific auto-buyers.
"Yeah, look, I mean, they make so much money on full-size pickups and SUVs, if that ever goes away. They're dead. They're gone," he said.
How long could the UAW strike last?
All three automakers have announced layoffs of non union members since the strike began and McElroy says it's unfair for taxpayers who have nothing to do with the strike to foot the bill. But that's expected to continue as long as the strike is going.
Earlier this month, it was revealed that the union had over $800 million in its strike fund. Strike pay is $500/week to all UAW members and Fain's ‘standup strike’ strategy – which implements strikes at certain plants over time rather than the entire union on strike – could mean that money could last for a long time.
"The UAW has got a very substantial strike fund. Before the strike started, publicly reported $825 million. But they anticipated, the union, did that they would have to pay out $500 a week to everybody on strike. But Shawn Fain also committed to anybody getting laid off because of the strike within the union - they'd also get this $500. So if you look at how many people have been laid off so far, the union is shelling out an extra about $1.5 million a week for the people who are laid off," he said.
That means the union has a couple of months worth of money in the strike fund.
"I figure the union strike fund could easily hold out until Christmas."
McElroy said the strategy is saving the union from spending all of its money on paying workers in the first few weeks.
"Yeah, look, Shawn Fain has come up with a very astute strategy: Just pick several plants, one each of the companies so far and inflict pain on them, financial pain on them to try to get what he wants. So I mean if he had shut everyone down all at once, the union would burn through its strike fund in probably just a couple of months time," McElroy said.