The American car workers' strike has entered its sixth week. As of October 29th local time, Ford and Stellantis have reached an agreement with the United Auto Workers (UAW), but only General Motors has yet to reach an agreement with the UAW. The six week strike has caused losses to the US automotive industry exceeding $9 billion.
Ford and Strantis reached an agreement
Ford took the lead in reaching a preliminary agreement with UAW on October 25th, and subsequently announced the agreement on the 28th.
According to a public statement by UAW, Ford Motor agreed to increase its hourly wage by 25% during the contract's validity period (exceeding four years), while also increasing its base hourly wage to $28, a 68% increase, and the maximum hourly wage to $40, a more than 30% increase. With the addition of cost of living allowance, the maximum salary is expected to increase by 33%.
The UAW leadership will vote on the agreement on October 29th. In addition, the agreement must be approved by Ford's 57000 American hourly workers, which may take several weeks, but Ford workers will return to work. Ford CEO and President Jim Farley stated after the negotiations that Ford will "restart the Kentucky Truck Plant, Michigan Assembly Plant, and Chicago Assembly Plant, bring 20000 Ford employees back to work, and once again provide customers with full models.
UAW and Ford have reached an agreement (source: UAW official website)
Three days after reaching an agreement with Ford, UAW announced an agreement with Stratis. Compared to the 2019 agreement, the new agreement contract will continue until 2028, with a contract amount of four times that of the 2019 contract. The maximum hourly salary in the agreement will be increased by 33% to $42, and the starting hourly salary will be increased by 67% to $30. The lowest paid worker and temporary worker in Strantis will also increase their income by 165% during the contract period. The salary of employees at the Mopa factory will immediately increase by 76%.
UAW and Strantis have reached an agreement (source: UAW official website)
Hours after reaching a preliminary agreement with Stratis on a new contract, negotiations between UAW and General Motors broke down. UAW members employed by General Motors have expanded the scale of the strike. Around 17:00 Central Time on the same day, nearly 4000 union workers from the General Motors factory in SpringHill, Tennessee joined the strike.
According to insiders, General Motors has agreed to increase hourly wages by the same amount as Stratis and Ford, but negotiations have been hindered due to differences on issues such as temporary workers. Considering the progress we have made, we are disappointed with UAW's actions, "General Motors said in a statement. We have continued to sincerely negotiate with UAW, and our goal remains to reach an agreement as soon as possible
Due to the inability of the three major automakers, General Motors, Ford, and Stratis, to meet the demands of car workers for salary increases, increased unemployment insurance, and medical insurance, the Federation of Automotive Workers in the United States organized workers to start strikes on September 15th. Before Ford and Strantis reached an agreement, the scale of the UAW strike had expanded to over 45000 workers including 8 assembly plants and 38 component distribution facilities. General Motors' Springhill is the ninth.
According to data released by Anderson Economic Group on the 23rd, the strike that began in mid September has caused approximately $9.3 billion in losses to the US automotive industry.
The income gap between executives and ordinary employees widens, and stock prices continue to decline
According to a third-party media report, since 2010, the total actual compensation of 10 CEOs of General Motors, Ford Motor, and Stratis has exceeded $1 billion, including salaries, bonuses, stock award values, fringe benefits, and special expenses related to retirement or company transactions. Among them, Ford CEOs received the highest salaries of $377 million, Stratis $372 million, and General Motors $254 million. Last year, General Motors CEO Mary Barra's actual salary was $34.1 million, while Ford CEO Jim Farley was $18.3 million.
During the same period, the wages of American automobile workers (whether or not they joined a union) decreased by about 17%.
All three major car companies have stated that most CEO salaries are linked to performance goals. If performance deteriorates, compensation will shrink. Bora also stated in a recent interview that 92% of his salary is linked to the company's performance. However, regardless of the company's performance, the annual salary of each current CEO is at least $1.7 million.
If UAW and all three automobile factories reach an agreement, the costs of the three automobile factories will continue to increase. Investors are generally pessimistic about the company's profit prospects.
Since the start of the strike, the stock prices of the three car factories have fallen more significantly. Among them, Ford Motor's stock price fell by more than 20%. Just after Ford and UAW reached an agreement, Ford Motor's stock price continued to plummet, with a decline of 12.29% on Friday and a loss of over $4 billion in market value in one day.
The decline in General Motors' stock price is also close to 20%. Strantis' stock price has performed relatively well, but has also fallen by more than 5%.
