Strike Watch: Why Autoworkers Are Demanding A 46% Pay Hike
Auto suppliers, car prices, and the stock market are all bracing for a hit
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Hey everyone,
Anyone else notice that their iPhone battery feels like it has been dying a bit faster recently? Well, it is that time of year again. Apple is unveiling its new line of products and operating system today.
📱As the iPhone 15 prepares for its debut, here are some rumored changes:
Apple’s lightest weight phone ever
Zoomier: An optical zoom lens to 6X (best so far has been 3X)
It will charge using a USB-C, just like laptops and iPads
A larger screen that fills almost the entire face
And not to bury the lede:
The could be the first iPhone with a battery guaranteed to last all day, no matter how much you use it.
We will be watching as Apple makes its announcement at 1pmET/10amPT
Mosheh, Jill, & Courtney
🎙The Mo News Podcast: A new Covid vaccine— but will it work on the newest strain?; How Kim Jong Un is getting to Moscow (Hint: It moves at 35 mph); The river of wine running through Portugal.
🗞 STRIKE IMMINENT AGAINST THREE MAJOR AUTOMAKERS
Almost 150,000 U.S. auto workers at factories in multiple states are gearing up to go on strike on Friday if the Big 3 automakers — General Motors, Ford, and Stellantis (which makes Jeep/Dodge/Chrysler) — do not accept their demands for big pay raises, cost-of-living adjustments, job security, profit sharing, work-life balance, and retiree benefits.
WHEN THE CLOCK STRIKES MIDNIGHT
Shawn Fain, the president of the United Auto Workers (UAW) union, has threatened a strike against any of those three automakers that haven’t reached an agreement with the union by 11:59pm ET on Thursday, when the contract expires.
ROADBLOCKS TO A DEAL
Negotiations have gone back and forth as the UAW refuses to budge on a couple of tall orders that the automakers say is just not feasible. Fain has acknowledged that the union’s demands are, his words, “audacious.” But, he’s still…
a) insisting the auto giants are profitable enough to afford to raise workers’ pay (the Detroit Three automakers posted a profit of $21 billion already in just the first half of 2023)
b) pointing to a number of contracts disputes last year that gave workers historic pay raises
Here’s a really good, easy-to-read breakdown of what workers are asking for, contrasted directly with what automakers are proposing, line by line.
And for those of you on a tight schedule this morning, here’s our Cliffs Notes version:
What workers want:
A substantial pay raise — 46% across four years — to counter salary increases of the Big Three carmaker CEOs, catch up with inflation, and make up for falling wages
That number is inspired by other union deals this summer: Earlier this summer, UPS workers won a 48% average total wage increase, over the next 5 years. In August, negotiators representing American Airlines pilots landed them a 46% pay increase over the next four years.
Profit sharing: UAW wants workers to get $2 for every $1 million spent on share buybacks, special dividends, and increases to normal dividends
Convert temporary workers to full-time after 90 days, with full benefits and profit sharing
The right to strike over plant closures
4 day work week, but get paid for 5 days (an expensive and logistically challenging ask for automakers trying to stay competitive with overseas automakers)
“
"Everything's going up — the cost of food, gas, mortgage interest rates. A lot of people haven't been able to have a safety net anymore."
Marcelina Pedraza, a Ford electrician in Chicago, tells NPR a pay raise is long overdue
The automakers say UAW’s demands are too expensive. Their argument is that they will be taking on enormous expenses in the coming years to adapt to the future of our roads with EV design, production, and assembly.
Here’s what they countered on wages:
Ford: 10% pay raise over the course of the four-year contract, plus several lump-sum bonuses
GM: 10% pay raise with similar lump sums
Stellantis: 14.5% wage increases over four years, with no lump sums in the package, but offered lump sums to cover inflation.
All 3 rejected the shortened work week
GO ON STRIKE, OR STRIKE A DEAL?
The union and the Detroit Three automakers are still trading counteroffers, which is expected to continue until Thursday night’s strike deadline. Fain said yesterday the union is prepared to negotiate around the clock.
“It’s disgusting.” On Friday, the UAW president had some choice words for the automakers’ proposals. He insisted they weren’t strong enough, and said he was putting them in the trash where they belong.
UAW President Shawn Fain tears up counter-proposals from the automakers.
IT COULD PUT A DENT IN THE ECONOMY
A union strike against three major automakers, all at once, could have a major economic impact.
It would likely cause significant disruptions for auto production in the United States, making some car models hard to find.
The automakers also fear that meeting the UAW’s extreme demands would drown them in expenses that would trickle down to car prices, forcing them to raise prices even more.
The average price for a new car as of June was $48,808, according to Kelley Blue Book.
Edmunds found average monthly payments have topped $700.
And don’t get us started on soaring auto insurance costs.
It could also cost the U.S. economy billions. The Anderson Economic Group predicts a strike against the Detroit Three would slash U.S. GDP by $5.6 billion in just 10 days, and push the Michigan economy into a recession.
Washington will be watching, too. A strike could collide with a looming government shutdown if Congress can’t lock in a spending deal by September 30th.
Transportation Secretary Pete Buttigieg told Politico: “We’re in contact with the parties, urging them to get to a solution.”
✔︎ Mo News Reality Check: This negotiation comes amid a summer of strikes as workers feel the tight job market gives them more leverage.
In just the first six months of this year, there have been about 250 strikes involving roughly 341,000 workers.
Status update on a few major battles:
UPS: Workers approved a massive new labor deal including raises for part time and full time workers and an end to forced overtime.
American Airlines: Pilots approved a new contract that includes an immediate 21% pay bump and 46% hike over the next 4 years..
Hollywood: Still ongoing. The latest statement, the AMPTP reassured the public that they’re actively negotiating, and “any suggestion to the contrary is false.”
⏳ SPEED READ
🚨NATION
📌 FDA approves new coronavirus vaccine as respiratory illness season nears (WASHINGTON POST)
📌 Trump seeks removal of federal judge from D.C. elections case, claiming bias (CNBC)
📌 Speaker McCarthy juggles a government shutdown and a Biden impeachment inquiry as the House returns for fall (AP)
📌 A shaken Washington copes with surging violence: ‘This is not normal’ (WASHINGTON POST)
📌 US sets record for billion-dollar weather disasters in a year -- and there’s still 4 months to go (AP)
🌎 AROUND THE WORLD
📌 Incredible Rescue: American explorer freed from Turkish cave after days-long rescue (AP)
📌 Morocco earthquake toll passes 2,800 as rescuers search for survivors (REUTERS)
📌 Ukraine claims to retake Black Sea drilling rigs from Russian control (BBC)
📌 At least 150 killed, hundreds more feared dead as Storm Daniel sweeps Libya (AL-JAZEERA)
📱BUSINESS, SCIENCE & TECH
📌 What to expect when Google faces the DOJ in the first major tech monopoly trial in decades (NBC NEWS)
📌 How to see a newly-discovered green comet this week, before it vanishes for 400 years (NPR)
📌 FDA drills in on common cold medications (AXIOS)
📌 Twinkie-maker Hostess bought for $5.6 Billion by Smucker (BBC)
🎬 SPORTS & ENTERTAINMENT
📌 Can talk shows continue during the strike? The answer is tricky (VARIETY)
📌 Aaron Rodgers suffers major injury in first game as a NY Jet, may be out for season (CBS SPORTS)
📌 Steven Tyler injures vocal cords; Aerosmith postpones goodbye tour (FOX NEWS)
📌 Michigan State football coach Mel Tucker accused of sexually harassing rape survivor (USA TODAY)
📌 DraftKings apologizes for 9/11-themed sports bet promo on New York teams (CNBC)
🗓 ON THIS DAY: SEPTEMBER 12
1953: A 36 year old Senator John F. Kennedy marries 24 year old Jacqueline Bouvier in Newport, Rhode Island. The Catholic mass was attended by 750 guests and an additional 450 people joined the wedding reception at Hammersmith Farm.
1959: The Soviet Union launched Luna 2, the first space probe to hit the Moon.
🔌 Check out our new Premium podcast interview on the first American women in space and how they got chosen for their missions. JOIN NOW
1983: Arnold Schwarzenegger became a U.S. citizen. He had emigrated from Austria 14 years earlier.
1984: Michael Jordan signed a seven-year contract to play basketball with the Chicago Bulls.