Workers strike at all 3 Detroit automakers for bigger share of industry profits(apnews.com)
apnews.com
Workers strike at all 3 Detroit automakers for bigger share of industry profits
https://apnews.com/article/auto-uaw-workers-strike-gm-ford-stellantis-7ce3ca9d94b911250d07556b7af376c7
48 comments
I honestly don't know how the Big 3 will be able to fiscally handle the UAWs demands all while tooling up for an EV future. They'll have to raise prices of existing profitable vehicles (trucks & crossovers) in order to pay for all this. Meanwhile Tesla will be miles ahead in terms of technology and room to lower prices while still turning a profit, and if any of their foreign competitors are able to successfully come up with an attractive EV crossover (admittedly a big if), then they could be in for some real trouble.
They could’ve started by not killing the EV1 back in the ‘00s. Would be light years ahead by now had they not given up on it.
https://en.m.wikipedia.org/wiki/Who_Killed_the_Electric_Car%...
When I saw this documentary about 15 years ago it was pretty depressing. Now electric cars are everywhere and we can laugh at GM’s mismanagement.
https://en.m.wikipedia.org/wiki/Who_Killed_the_Electric_Car%...
When I saw this documentary about 15 years ago it was pretty depressing. Now electric cars are everywhere and we can laugh at GM’s mismanagement.
unions would have killed it too if asked about, bcs EV need less manpower to produce cars end to end, lowering number of jobs and union power
> how the Big 3 will be able to fiscally handle the UAWs demands
They are all posting record all-time high profits, and are forecast to continue doing so.
The solution is so, so simple, but also so very taboo to talk about in American society.
They can comfortably afford to pay their employees more by reducing profits.
They are all posting record all-time high profits, and are forecast to continue doing so.
The solution is so, so simple, but also so very taboo to talk about in American society.
They can comfortably afford to pay their employees more by reducing profits.
I'm not worried, as creative destruction is progress for the typical consumer.
I'm worried that the process of creative destruction will be halted through a federal bailout.
20 years ago, it made sense to prop up these manufacturers to support the domestic industry, but given the rise of the domestic EV industry (Tesla, Rivian etc), I'm not sure if it would still make sense for a strategic perspective.
Politically, it may still make sense, though.
Auto profits are falling. Whule I wish everyone higher pay, there must be enough pie for a bigger slice. This will likely, and sadly, get worse for both workers and automakers before it gets better, or offshored.
Profits are defined to be what’s left after expenses / labor gets paid. Maybe they mean revenue ? Or more stock based compensation ?
Maybe they want to be exposed to unlimited losses if the company underperforms?
[deleted]
Pretty good gig: get unsustainable pay and pensions during good times. Funnel a bunch of it into politics. Get pensions guaranteed and bailed out in bad times. Been this way since the 60s
General Motors CEO Mary Barra, the highest-paid chief executive among the Big Three, made nearly $29 million in 2022. Securities and Exchange Commission filings show that this is 362 times the median GM employee's paycheck [1] (this pay ratio is required reporting from public companies now).
Profits at the “Big 3” auto companies—Ford, General Motors, and Stellantis— skyrocketed 92% from 2013 to 2022, totaling $250 billion. Forecasts for 2023 expect more than $32 billion in additional profits [2] [3].
Polling shows a majority strongly supporting the union's efforts in this regard [4].
The money is there, and the people who doing the work are asking for a greater share of the profits generated by their work. This is not unreasonable, and Labor should continue to turn the screws as politics shift, as well as structural demographics causing labor demand to exceed supply for at least the next decade.
[1] https://wamu.org/story/23/09/13/sky-high-ceo-pay-is-in-focus... ("Sky-high CEO pay is in focus as workers everywhere are demanding higher wages")
[2] https://www.epi.org/blog/uaw-automakers-negotiations/ ("UAW-automakers negotiations pit falling wages against skyrocketing CEO pay")
[3] https://www.cnbc.com/2023/09/15/biden-says-record-profits-sh... ("Biden says record profits should ensure record contracts as UAW strikes Ford, GM and Stellantis plants")
[4] https://i.ibb.co/r7TsFtY/qd18hourfcob1.webp
Profits at the “Big 3” auto companies—Ford, General Motors, and Stellantis— skyrocketed 92% from 2013 to 2022, totaling $250 billion. Forecasts for 2023 expect more than $32 billion in additional profits [2] [3].
Polling shows a majority strongly supporting the union's efforts in this regard [4].
The money is there, and the people who doing the work are asking for a greater share of the profits generated by their work. This is not unreasonable, and Labor should continue to turn the screws as politics shift, as well as structural demographics causing labor demand to exceed supply for at least the next decade.
[1] https://wamu.org/story/23/09/13/sky-high-ceo-pay-is-in-focus... ("Sky-high CEO pay is in focus as workers everywhere are demanding higher wages")
[2] https://www.epi.org/blog/uaw-automakers-negotiations/ ("UAW-automakers negotiations pit falling wages against skyrocketing CEO pay")
[3] https://www.cnbc.com/2023/09/15/biden-says-record-profits-sh... ("Biden says record profits should ensure record contracts as UAW strikes Ford, GM and Stellantis plants")
[4] https://i.ibb.co/r7TsFtY/qd18hourfcob1.webp
Citation: https://www.youtube.com/watch?v=yEv4qvvQNl4 ("Autoworkers Strike: The Unions' Rising Influence in America - Peter Zeihan")
polski-g(1)
Leaving CEO pay aside, that means the median salary I'd $80k. And we're talking Rust-Belt, not Silicon Valley. That's a pretty good salary for the region, plus the benefits they get.
Not seeing how the demands are in any way reasonable.
Not seeing how the demands are in any way reasonable.
Without any snark, I suggest consuming more data. What you consider "pretty good" is the bar now [1]. Wages have been stagnant for decades. Combined with recent aggressive inflation, your idea of reasonable might simply be out of touch with the labor market. To note, there was surplus labor that made these demands untenable until COVID generated ~2-3M excess deaths over a short window of time, pulling forward reduced labor supply from structural demographic compression [2] [3]. Tangentially, 55+ who are clinging for life to labor participation are what is holding up the participation rate. Anything that causes those folks to exit the labor force more rapidly than retirement (3.6M Boomers retire per year) or death (~1.8M/year for 55+ cohort) is going to cause labor supply to dip deeper than the current forecasted curve [4].
[1] https://www.cnbc.com/2023/08/21/american-workers-are-demandi... ("American workers are demanding almost $80,000 a year to take a new job")
[2] https://www.axios.com/2023/05/08/us-labor-shortage-older-wor... ("Why labor shortages could be here to stay")
[3] https://www.marketplace.org/2022/01/24/how-much-labor-force-... ("How much of our labor force has been lost to COVID-19?")
[4] https://archive.ph/sKeyE | https://seekingalpha.com/article/4531829-older-workers-propp... ("Are Older Workers Propping Up The U.S. Economy?")
(scholar of systems)
[1] https://www.cnbc.com/2023/08/21/american-workers-are-demandi... ("American workers are demanding almost $80,000 a year to take a new job")
[2] https://www.axios.com/2023/05/08/us-labor-shortage-older-wor... ("Why labor shortages could be here to stay")
[3] https://www.marketplace.org/2022/01/24/how-much-labor-force-... ("How much of our labor force has been lost to COVID-19?")
[4] https://archive.ph/sKeyE | https://seekingalpha.com/article/4531829-older-workers-propp... ("Are Older Workers Propping Up The U.S. Economy?")
(scholar of systems)
[deleted]
> that means the median salary I'd $80k. That's a pretty good salary for the region.
That is exactly the kind of thinking that got us into this mess where companies post record profits year after year and employee pay does not increase.
These employees are generating billions of dollars of extra profit for the company, and they want a bigger share of that.
How much they are earning is utterly irrelevant, they want a bigger share of the enormous profits they are generating. That is the end of the story
That is exactly the kind of thinking that got us into this mess where companies post record profits year after year and employee pay does not increase.
These employees are generating billions of dollars of extra profit for the company, and they want a bigger share of that.
How much they are earning is utterly irrelevant, they want a bigger share of the enormous profits they are generating. That is the end of the story
Another way of looking at it: we're always positing on this site how much value we leave on the table as software developers and how we should try to capture more of that value, whether it be by consulting, or freelance work or a startup.
This is the UAW's way of making the same point.
This is the UAW's way of making the same point.
I think comparing the compensation for white collar labor and blue collar labor can be a bit apples-to-oranges sometimes when you consider the toll that physical labor takes on your body, which in turn limits how much time you can spend at your full earning potential. My friends in the trades have noted that the good pay when you're young comes as a sort of loan against how bad your knees and back will hurt by the time you're middle-aged. Versus someone like me who, barring a freak accident or sudden catastrophic illness, can expect to continue toiling in the software mines until I'm old and grey.
> toiling in the software mines
Cute phrase, though maybe you can spend some time working in the mines. Most all trades are hiring. It's enlightening how different life/culture/America is, particularly underground.
Cute phrase, though maybe you can spend some time working in the mines. Most all trades are hiring. It's enlightening how different life/culture/America is, particularly underground.
Unfortunately not likely since I already have hella arthritis (genetic, not degenerative) :P
According to the article, they want 32 hour weeks while still being paid for 40, so you might make apples-2-apples by saying they want $100k when comparing to other professions that would be working 40hrs
Good, 40 hours is too much. They should be living their lives, not toiling away enriching others. Let the shareholders be a little bit less rich and let the workers have more time to be with their friends and families.
Nobody has to work 40 hours. Everyone can choose to work less, prioritize other stuff in their lives, and be paid less. I'm not sure how we could have our cake and eat it, too?
1. So this is a gambit in the contract negotiations, its unlikely to be taken seriously but can be given up at a later date. The first stage of these negotiations always has a ton of these whacky asks.
2. Since the concessions the union made in '00 (?) there has been a two tiered pay rate system. Essentially, 1/2 the wages for new hires (was like $28/hr for vets and $15 for newbies in '00). This has caused the big 3 to lean on newbie wages and sometimes do required work 6/7 days a week for >10 hrs a shift. So the new union boss is trying to make a point that equal pay needs to come back along with work/life balance even for factory workers.
3. I did some off the cuff math, GM+Ford+Stellantis did stock buybacks of AT LEAST 9 Billion to shareholders in '22. Estimates of the current kinda crazy opening bid at 40% raises + other incidentals is a cumulative 80Billion split between the big 3 from september of '23->september of '27 so 4 years or ~20Billion a year. A big number but remember the big 3 made something like 50 billion in profit, even subtracting that stock buyback first. So effectively the union is asking for 2/5ths of profits, or 1/3rd if you add in the stock buyback.
tldr; the money is there. The big 3 offerred a 10% raise, union wants 40%. My guess is they meet somewhere around 25%. Or about a year of profits over a 4 year contract. Big 3 would be stupid not to agree they are making money hand over fist and this still leaves them plenty of room to stay nimble. In addition they are losing billions a week with this strike.
2. Since the concessions the union made in '00 (?) there has been a two tiered pay rate system. Essentially, 1/2 the wages for new hires (was like $28/hr for vets and $15 for newbies in '00). This has caused the big 3 to lean on newbie wages and sometimes do required work 6/7 days a week for >10 hrs a shift. So the new union boss is trying to make a point that equal pay needs to come back along with work/life balance even for factory workers.
3. I did some off the cuff math, GM+Ford+Stellantis did stock buybacks of AT LEAST 9 Billion to shareholders in '22. Estimates of the current kinda crazy opening bid at 40% raises + other incidentals is a cumulative 80Billion split between the big 3 from september of '23->september of '27 so 4 years or ~20Billion a year. A big number but remember the big 3 made something like 50 billion in profit, even subtracting that stock buyback first. So effectively the union is asking for 2/5ths of profits, or 1/3rd if you add in the stock buyback.
tldr; the money is there. The big 3 offerred a 10% raise, union wants 40%. My guess is they meet somewhere around 25%. Or about a year of profits over a 4 year contract. Big 3 would be stupid not to agree they are making money hand over fist and this still leaves them plenty of room to stay nimble. In addition they are losing billions a week with this strike.
Median is 50percentile. 50% of employees are making less than 80k.
You'd need a scatter plot of pay vs experience in this cohort to really say that the demands are unreasonable.
We dont know how much buearocracy/middle mgmt there is in these companies, and how much they make, and how much value they contribute, vs extract.
I dont see how any lay person can pass judgement about whether the strike is fair or not without access to a lot more facts than just ceo pay or median pay.
Not saying that the strike is justified, just that the over confident tone that its not is unwarranted.
You'd need a scatter plot of pay vs experience in this cohort to really say that the demands are unreasonable.
We dont know how much buearocracy/middle mgmt there is in these companies, and how much they make, and how much value they contribute, vs extract.
I dont see how any lay person can pass judgement about whether the strike is fair or not without access to a lot more facts than just ceo pay or median pay.
Not saying that the strike is justified, just that the over confident tone that its not is unwarranted.
The issue is that profits are highly cyclical, and the automakers are coming off some of their best years ever due to circumstances that are extremely unlikely to repeat. Locking those wages in is a great way to cause the next crisis.
That may or may not happen and in any case, it's in the future. People want to be paid what they're worth now.
Okay, but the workers' pay was not adjusted upwards to match those best years, so if not now, when?
You can't leave CEO pay aside, that's the whole point. These companies are making record profits and CEOs are taking home record pay. I think the workers who are actually building the product deserve pay in line with the profits they're helping the company achieve.
$80k/yr in Michigan is solidly in the middle class. Not unreasonable for a fulltime auto worker.
According to the US Bureau of Labor Statistics, US auto worker pay is down by about 20% since 1990, adjusting for inflation: https://www.bls.gov/opub/ted/2020/inflation-adjusted-earning...
> Been this way since the 60s
Market share for unionised automakers is falling. (Toyota, Mercedes-Benz and Tesla.)
Market share for unionised automakers is falling. (Toyota, Mercedes-Benz and Tesla.)
[deleted]
One takeaway, this particular new union leader is the first directly elected one in a very long time. Prior to this the union leader was selected in a good 'ole boys manner by union reps and sort of rotated. After the justice department found quite a bit of graft and bribery they required a new election and Shawn Fain won in a razor thin recount.
As a result the UAW for the first time in a long time got a populist representative of the average union worker, thus the hard line strike. So for those of you against unions because of corruption, etc. This is what it looks like when there is at least less of that, a good thing.
https://www.nytimes.com/2023/09/12/podcasts/the-daily/ford-g...