Washington — President Joe Biden is asking major U.S. automakers and their workers’ union to reach an agreement that takes “every possible step to avoid painful plant closings” as the sector transitions to electric vehicles.
The United Auto Workers have not yet endorsed the president as he seeks reelection, despite his broad support from organized labor going into the 2024 campaign. The UAW represents 146,000 workers at Ford Motor Co., General Motors Co. and Stellantis NV, commonly known as the big three automakers.
Biden’s statement comes one month before the workers’ contracts expire at 11:59 p.m. Sept. 14, when a strike against all three Detroit automakers is on the table. As of mid-August, the two sides appeared far from agreement on contract demands.
A work stoppage would have a massive impact on the economy and reverberate through multiple markets and manufacturing sectors. Americans’ views on the economy are often tied to how they view the president, so a strike could have a negative impact on Biden and on his re-election prospects as he enters the 2024 election cycle.
Biden said in a statement Monday that as the market moves away from gasoline-powered vehicles, the auto industry still must provide “good jobs that can support a family” and ensure that “transitions are fair and look to retool, reboot, and rehire in the same factories and communities at comparable wages, while giving existing workers the first shot to fill those jobs.”
“The UAW helped create the American middle class, and as we move forward in this transition to new technologies, the UAW deserves a contract that sustains the middle class,” Biden said.
Presidential administrations have used economic spokespersons to comment on the potential economic impacts of bargaining, said Marick Masters, a labor expert and business professor at Wayne State University. But it’s uncommon for a president to weigh in on negotiations directly, “preferring instead to let the process work its will.”
Biden’s statement is “a general remark” that doesn’t call for either of the parties to agree to specifics, Masters said. “But it intimates clearly that this administration is keenly watching these negotiations with an eye toward promoting higher-paying jobs in its acceleration of the transition of electrical vehicles.”
GM said in a statement that it’s bargaining in “good faith” with the UAW on “a contract that provides job security and supports good wages and benefits for our team members while enabling companies to compete successfully domestically and globally.”
Stellantis said in a statement that it “remains committed to working constructively and collaboratively with the UAW to negotiate a new agreement that balances the concerns of our 43,000 employees with our vision for the future — one that better positions the business to meet the challenges of the U.S. marketplace and secures the future for all of our employees, their families and our company.”
Ford noted that it employs more UAW workers than any automaker and said in a statement that it looks “forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.”
Shawn Fain, president of the union, has asked for an end to different wage tiers among workers. He is also seeking double-digit pay raises and restoration of cost-of-living pay, defined benefit pensions for all workers, and restoring retiree health coverage. The union has proposed a 32-hour workweek, instead of the conventional 40.
The UAW’s contract demands of the Detroit Three automakers could surge per-person labor costs to more than $100 per hour in wages and benefits, according to three sources familiar with the situation, potentially outstripping North American profits over the life of a new contract.
All-in labor costs for GM, Ford and Jeep maker Stellantis NV now hover around $65 per hour, according to industry estimates, compared to $55 an hour for foreign-owned automakers operating in the United States and $45 an hour for electric-vehicle rival Tesla Inc.
Meeting such demands could dramatically increase the industry’s fixed costs, analysts say. Facing the risk of a potential strike, automakers have said they face development costs as the industry shifts to EVs and spends billions of dollars constructing battery plants.
“At this critical moment in negotiations, we appreciate President Biden’s support for strong contracts that ensure good paying union jobs now and pave the way for a just transition to an EV future,” Fain said in a statement Monday. “As the president said, the UAW helped build the middle class, and we are fighting for contracts that will bring prosperity back to working-class communities that have been struggling for far too long.”
Under Fain’s leadership, the UAW has been pressuring Biden and members of Congress to publicly support the union’s efforts in contract negotiations and to further tie federal incentives to high-paying union jobs. Fain met last month with Biden at the White House and with Congressional leaders, some of whom have called for automakers to include their joint venture battery plants in the union’s national agreement.
rbeggin@detroitnews.com