2023-11-04 04:30:15
United Auto Workers President Shawn Fain, fist raised, alongside Rev. Jesse Jackson (bottom center), at a rally for striking workers in Chicago, Illinois, October 7 2023. JOHN J. KIM / AP
No one disputes it: Detroit’s blue-collar workers, these unionized auto workers, are the undeniable winners of the historic strike in American car factories. Workers at Ford, General Motors and Stellantis will benefit from a wage increase of around 25% over four years, according to the agreements which ended the movement. The maximum worker wage will rise to 42 dollars (39.50 euros) per hour. An operator will now earn more than $80,000 per year, excluding overtime.
Also read the report: Article reserved for our subscribers Automobile strike in the United States: “Everything is increasing, except our pay slip”
The automobile is on the verge of returning to its former glory: according to a survey by Washington Post, with this agreement, the hourly wage, today at 32 dollars, will return to the level which prevailed, adjusted for inflation, in 1990, i.e. around 42 dollars. At the time, automobile workers earned 80% more than other private sector employees.
With the bankruptcy of Detroit manufacturers in 2009 and the establishment of foreign groups in the non-unionized South, this gap had narrowed to reach 14% today. It is starting to rise again. The embodiment of this success is the progressive Shawn Fain, a former Chrysler electrician (now part of Stellantis), elected in the spring at the head of the United Auto Workers (UAW) union, and who led a determined strike against the three manufacturers , a first since the 1930s.
The political winner of the affair is Joe Biden, who went on a picket line during the conflict, a first for a president of the United States. The Democrat absolutely needs to win the state of Michigan, where Detroit is located, and which was Donald Trump’s victory in 2016, along with Pennsylvania and Wisconsin.
The electricity transition suffers from the conflict
Logically, the losers are the Detroit manufacturers, the “Big Three”, hit by rising costs, while they must make the switch to electric vehicles. “In the past, the UAW has always had a realistic respect for an automaker’s needs to remain competitive. This time they didn’t.”, lamented Bob Lutz, former president of Chrysler. Ford has estimated this increase at between $850 and $900 per vehicle. The average selling price of a new vehicle reaches $48,000 in the United States and there is no model below $20,000.
Shareholders are looking gloomy, even if manufacturers’ shares have rebounded slightly with the announcement of the return to work. Wall Street was infatuated with the revival of Detroit in January 2021, ready to launch into the electric vehicle battle. Since then, Ford shares have returned to their level at the time, below 10 dollars, compared to 25 dollars in January 2022. General Motors is at its lowest since 2016, if we except the air hole at the start of the crisis due to Covid-19, and is worth half as much as a year ago. Ford and General Motors are worth $39 billion and $37 billion respectively, sixteen times less than Tesla ($628 billion), whose price has nevertheless been halved in two years.
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