This is the first time UAW workers have stepped out of factories at all three automakers simultaneously.

The union is demanding higher wages for nearly 150,35 members working at the three companies. Its campaign is part of a wider battle to protect workers under plans to shift to clean energy and electric vehicles, which the union estimates could cost <>,<> jobs.

  • The union's demands include a 40 percent wage increase for the next four years.
  • Car companies are currently offering a 20 percent increase.
  • Among the contentious demands is to increase wages and allowances for junior employees to reduce the gap between them and those who are more experienced, who currently receive about $32 an hour.

Union leader UAW announced that members intend to expand their strike against Detroit automakers next Friday unless there is serious progress at the negotiating table in the wage dispute.

UAW President Sean Fine said automakers were to blame for the delay in negotiations, and the union would not stand idly by, adding: "We don't wait, we don't mess around."

About 12700,150 of the <>,<> workers the union represents are taking part in the strike, but Finn's comments suggest the action could be scaled up, with repercussions across the U.S. economy.

Possible escalation

According to a report in the Financial Times, "This move (escalation) would extend the matter beyond the 13,<> workers at three factories who went on strike last Friday.

The shift to electric vehicles leads to a significant reduction in the number of jobs in the automotive sector in the short term.

While strikes in the automotive industry are usually of interest, they are particularly significant, as "unions don't just fight for a few more dollars. This battle may determine not only the future of the clean energy transition in the United States, but also the outcome of the 2024 presidential election and the future of the Democratic Party," writes Rana Eileen Forohar in the Financial Times.

In this context, the American analyst, Hazem Al-Ghabra, a former adviser at the State Department, says that this strike reflects a difficult economic situation in the United States of America, although work is being done to contain the crisis, but this highlights the magnitude of the pressures with inflation rates and the American citizen's feeling that prices will not return to what they were before Corona quickly, and in light of the lack of change (rise) of income appropriately with the increase in prices.

Loss estimates

Ghabra talks in exclusive statements to the "Economy of Sky News Arabia" website about the Union of Auto Workers, explaining that it has hundreds of thousands of members (including nearly 600,850 retired members as well). He says the union has huge funds stored up to $500 million in subscriptions from members, and therefore has the ability to fund members with $<> a week for the duration of the strike to support striking workers.

"During a previous strike in 2019 targeting General Motors, the strike lasted for about 40 days and was costly for the company, after about 34,<> employees participated," he adds, referring to the extent of the losses that the current strike could cause, especially with car companies relying mainly on labor.

  • The three factories that stopped production due to the strike produce medium-sized trucks that generate profits for companies, but stopping production does not yet inflict maximum losses on companies, so the impact is still limited.
  • The impact of the drop in sales will be between $41 million and $64 million in weekly operating profit, according to a note from Deutsche Bank. The German bank said the strike would cost the union $6.5 million a week.
  • Analysts at Cox Automotive say GM's sales may be "more vulnerable" due to quick dealership sales, compared especially to Stellantis, which has a larger inventory of goods due to its "weak" sales, while Ford is "between" the other two.

Ghabra does not believe in the possibility of contagion to other sectors, especially since "few unions have the ability to do so, such as telecommunications and electricity," noting that there is blame on President Biden, who encourages unions, "and this is a danger to a capitalist system like the system of the United States of America (...)." , speaking about the political implications of that as well.

Difficult demands

He adds: "The problem is that the union has many and large demands, on top of which is the increase in the level of wages by about 40 percent, which is equivalent to the rate of increase in the general manager. In the end, the general manager is individual, while the workers represent tens of thousands, as well as other demands such as reduced working hours and other demands that will dramatically change the relationship between the employee and the company."

In the past, the United Auto Workers union in the United States would target one of the large companies in its strike, and then use the contract reached as a model for its strike in other companies.

In addition, Ghabra warns that the competitiveness of the US auto sector may be affected, saying: "The competitiveness of the United States in the global market is no longer in its strength, as we see countries - such as Vietnam, for example - significantly advancing in the manufacture of cars, so "complicating things for American companies in this way and in a complex international situation complicates the scene, which is not good for the American economy in general and the ability of companies to compete."

The threat of escalation came as Ford faced the prospect of a strike in Canada as well, with 5700,<> workers threatening to leave the Canadian company's factories after their contract expired at midnight on Monday.

Lana Payne, president of Unifor (a union that represents about 18,<> workers at Canada's top three automakers), said talks with Ford had been "constructive," but not enough progress had been made on priorities such as pensions and wage increases.

Unlike the United Auto Workers Union, which acquired the three automakers simultaneously, Unifor took a more traditional approach to bargaining in the North American auto industry. Ford chose to be the target company first, and after reaching a contract with it, it intends to try to secure similar contracts with GM and Stellantis.

Reduce risk

On the other hand, financial risk expert and economic analyst from the United States, Muhyiddin Kassar, downplays the impact of the current protests on US plans in the automotive sector, as well as corporate profits.

He says in exclusive statements to the site "Economy of Sky News Arabia", that there is an increase in corporate profits in parallel with the increase in prices, while the purchasing power of workers is under constant pressure, and in light of the threats workers face about their jobs, hence the problem between the labor union and companies has begun strongly, workers want appropriate shares of profits and income, and companies want to seek to find a way to avoid bearing these increases in income, a scene that is constantly repeated From time to time between workers and business owners (in different sectors).

"Now for the automotive sector, things look different, in terms of the big difference (gap) in wages, while companies do not want to share profits in a real way with workers (increasing incomes relative to what is required by workers)," he adds, but he believes that this may not threaten the companies themselves, which, even if their production is disrupted by the strike, guarantee high prices due to lack of supply, as well as the good position of these companies in the market. , according to his analysis of the scene.

He also does not believe that the repercussions of such a strike could extend to threatening the competitiveness of American car companies vis-à-vis their European counterparts, for example, explaining that there will inevitably be an agreement between companies and workers on a compromise.