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At 12:00 Beijing time, nearly 150000 members of the United Auto Workers (UAW) failed to negotiate new labor contracts with the US auto giants General Motors, Ford and Stellantis. The organization will launch strikes in several states in the United States.

UAW chairman Shawn Fain called the strike plan "stand up strike" to crack down on American automakers in a way they have never seen before. Shawn Fain revealed that UAW will not launch a full strike at the beginning, only workers at certain factories will strike first, while other members will continue to work under the old contract, creating chaos by "cracking down on key factories" before the strike will escalate as the case may be.

This is the first time in the history of the UAW to launch a strike against the three major car companies at the same time, and it will also become one of the largest labor actions in the United States in recent years. This round of strike will lead to huge economic losses, and at the same time, the operation of the US automobile industry may fall into chaos, thus affecting the US economy. It is understood that the auto workers' strike in the United States will begin at three factories, including the General Motors plant in Wentsville, Missouri (which mainly assembles medium-sized pickup trucks), the Stylandis plant in Toledo, Ohio (which mainly assembles jeeps), and the Ford plant in Wayne, Michigan (which mainly assembles "fierce Horse" SUVs).

UAW is the UAW, which has 146000 members in the GM, Ford and Stellantis groups, accounting for about 56 per cent of all workers in the US auto industry. Workers' contracts with the big three Detroit automakers are re-signed every four years. The last labor negotiation was in September 2019, but the negotiators failed to reach an agreement. The UAW led a 40-day strike against GM, which cost GM more than $3.6 billion in profits.

In July this year, a new round of labor contract negotiations began. The new labor agreement is mainly related to salary proposals, wage security, and pension benefits. Shawn Fain, chairman of UAW, said that after several rounds of proposals, the terms offered by the Big three were 20 per cent for Ford, 18 per cent for GM and 17.5 per cent for Stellantis, but that was far less than half of the 40 per cent increase offered by UAW. In addition, UAW also asked for the restoration of defined benefit pensions for all workers, a 32-hour work week, the cessation of temporary workers, health insurance for retired workers, and other conditions, but these requirements were rejected by the company. Shawn Fain said on Wednesday night local time that the three car companies are willing to compromise on wages and other aspects, but their proposal does not reflect the huge profits generated by workers for the company; workers need higher wages to cope with the soaring cost of living under the influence of high inflation.

It is calculated that if the demand of the trade union is met, the labor costs of the car companies will increase by $45 billion to $80 billion, with an average labor cost of more than $80 billion per hour, an increase of 134% from the current $64. If UAW and the three major auto companies fail to reach an agreement on a new labor agreement and then launch a strike, it will cause a total loss of US $5 billion to the upstream and downstream of the US auto industry, and may lead to the disruption of the entire car supply network.

It should be noted that the strike does not mean the end of negotiations on a new labor agreement, it only forces Detroit automakers to compromise on new labor contracts. If it seems that the big three Detroit automakers will have to pay more for it anyway, it's just a matter of more or less.

Ford had made a new offer for UAW's request for a pay rise and was the most generous in 80 years, including a pay rise, elimination of tiered wages, inflation protection, five weeks of paid leave, 17 days of paid leave, higher pensions and continued investment in US factories, but did not intend to make concessions on the four-day work week. Ford CEO Jim Farley said that if Ford agreed to all of UAW's demands, "We will lose $15 billion and go bankrupt." The team has started active negotiations with UAW, and the welfare of the workers has been significantly improved. They do not want a strike, but they are also ready to strike.

This morning, GM also submitted a new plan that includes big pay increases, more holidays and better benefits for retirees. GM CEO Mary Barra said the proposal was "unprecedented" and met the demands of many unions, but it was still inadequate in other areas, such as the union's demand for a 40 per cent salary increase within four years.

The auto industry accounted for 3 per cent of US GDP in 2022, with the Big three accounting for about 40 per cent of the market, according to the data. According to industry insiders, if nearly 150000 workers at the three car companies go on strike, it could lead to a 30 per cent suspension of car production in the US, causing huge losses to the auto industry and pushing up the price of car products, while Tesla, who is not a member, may be the beneficiary. If the UAW strikes against the Big three at the same time, the economic loss will be as high as $500m a day.

According to reports, the stalemate also attracted the attention of Washington. To win the support of the unions, President Joe Biden spoke with Shawn Fain, president of the United Auto Workers Union, and leaders of automakers.

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