A fortnight ago US president Joe Biden said he was not worried about a threatened strike by car workers and that he did not think it would actually happen.
Now employees at three of the main unionised car manufacturers, General Motors, Ford and Stellantis – which owns the Chrysler, Jeep and Ram brands in the US – are on the picket lines, creating potentially very significant political and economic problems for the White House.
On Friday about 13,000 members of the UAW trade union stopped work at car plants in Ohio, Michigan and Missouri after talks to the three companies failed to result in a deal.
Pay is a big issue in the dispute, as are concerns about jobs in an industry in transition; that is moving away from traditional petrol and diesel-fuelled cars and towards electric vehicles.
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Workers are also looking to regain ground conceded during cutbacks in previous years in areas such as defined benefit pensions, and they point to high levels of profitability and executive remuneration in the sector.
The strike presents problems on a number of levels for the White House.
Biden has portrayed himself as the most union-friendly president in history.
He would like the backing of powerful unions as he runs for re-election next year. And many car plants are based in states such as Michigan that are strategically crucial in his electoral path back to the White House.
A prolonged work stoppage could also hit the economy – driving up car prices at a time when inflation is a big concern for voters as well as impacting on companies in the car manufacturing supply chain.
Critics of the Biden administration contend that by expressing his pro-union sentiments the president effectively egged on the strike.
Others are using the dispute in a car industry as a stick to beat the president for promoting the move to electric vehicles and away from fossil fuel as part of his overall environmental policy.
On Friday Biden backed the workers.
“Over the past decade, auto companies have seen record profits, including the last few years, because of the extraordinary skill and sacrifices of the UAW workers. But those record profits have not been shared fairly, in my view, with those workers,” he said.
“Let’s be clear. No one wants a strike. But I respect workers’ right to use their options under the collective bargaining system. And I understand the workers’ frustration.” Biden said over generations, car workers had sacrificed much to keep the industry alive and strong, especially during the economic crisis and the pandemic.
He said workers deserved “a fair share of the benefits they helped create for an enterprise”.
The president said the car manufacturers had made significant offers to the workers. However, he urged them to go further “to ensure record corporate profits mean record contracts for the UAW”.
In contrast, Biden’s likely challenger in the election, former president Donald Trump, backed the employers in an interview to be broadcast over the weekend.
He told broadcaster NBC that the car workers were being sold down the river by their leadership as manufacturers would move production to China. He urged the union to endorse him for president.
On Friday one of the most prominent business groups in the US blamed Biden for the car industry strike as well as for other industrial unrest.
Screenwriters and actors have been on strike for weeks in a dispute with television and film studios.
“The UAW strike and indeed the ‘summer of strikes’ is the natural result of the Biden administration’s ‘whole-of-government’ approach to promoting unionisation at all costs,” Suzanne Clark, president and chief executive of the US Chamber of Commerce said.
On the other hand, Democrat politicians, particularly those in areas such as Michigan, said they would be joining workers on the picket lines to show support.
The car workers are seeking pay rises of 40 per cent over four years – about twice as much as has been offered by the companies. They also want a shorter working week and improved benefits such as pensions.
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The union is also trying to defend jobs as manufacturing shifts from internal combustion engines to batteries. Electric vehicles have fewer parts and can be made in plants with lower employment levels.
There also seems to be a trend towards companies moving manufacturing away from traditional heartlands of the motor industry, such as Detroit in Michigan, and towards states in the south where unionisation is not as common.
The car companies claim that they are losing money on electric vehicles. Ford said in July it would lose $4.5 billion (€4.23 billion) in this area this year.
They are also worried additional costs would make less competitive in comparison with non-unionised companies such as Tesla.
