UAW strike: Why Ford, GM, other automakers' employees protesting | Explainer

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wage hike, including a 20% immediate increase, and improvements in benefits. What are the demands of the United Auto Workers (UAW) union? The Union is pushing automakers to eliminate the two-tier wage system under which new hires earn as much as 25% less than veterans. The UAW also wants strong salary increases, given the financial success of the automakers, citing generous executive payouts and large US federal subsidies for EV sales.

The union also wants defined benefit pensions for all workers restored, 32-hour work weeks and additional cost-of-living hikes, job security guarantees, and an end to the use of temporary workers. The UAW has been wary of the industry shift to EVs and called on the Biden administration to soften its proposed vehicle emission cuts that would require 67% of new vehicles to be electric by 2032. The Detroit Three wants to close the cost gap they have with foreign automakers with non-unionized US factories.

The companies also want greater flexibility in how they use their US workforces to increase efficiency and cut costs as the industry shifts to EVs. A full strike would hit earnings at each affected automaker by about $400 million to $500 million per week assuming all production was lost, Reuters reported. A broad strike could also trickle down and squeeze quarterly profits for auto part suppliers such as Aptiv, Lear Corp, and Magna.