What marks should Shawn Fain and auto maker CEOs get now that the 2023 UAW strike is almost over?
Forty-five days, many late nights, and a lot of investor consternation. That’s what it’s taken to get new tentative labor agreements for the United Auto Workers and the Detroit-Three auto makers Ford Motor, General Motors, and Stellantis.
It worked. Wages will rise about 25% over the life of the contract, wage tiers, which were prior concessions the Union made when auto makers were losing billions, are gone and there will be electric vehicle jobs filled by UAW workers. Auto CEOs, B- It would be easy to say the leaders of the auto makers—GM’s Mary Barra, Ford’s Jim Farley, and Stellantis’ Carlos Tavares—deserve failing grades because they lost. That’s an oversimplification. No one expected costs to stay flat. No one really expected the 2023 labor negotiation to go down without a strike either.
He acknowledges that nonunion operators can have a cost advantage over unionized shops, but it isn’t guaranteed. What’s more, he estimates that labor increases represent about a one percentage point headwind to Ford’s estimated operating profit margins in coming years of about 6%. Not insignificant, but not insurmountable.
William Clay Ford Jr., B+ Bill Ford Jr. deserves some credit for putting himself out there and trying to reframe a contentious situation. “This is not Ford versus the UAW, it should be Ford and the UAW versus Toyota, Honda, Tesla, and all the Chinese companies that want to enter our home market,” said Ford on Oct. 16. “We need to come together to bring an end to these acrimonious talks.”
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