Labor strikes have played a pivotal role in shaping workers’ rights and labor conditions throughout history.
One such significant strike in recent memory is the United Auto Workers (UAW) strike. Over 140,000 union employees stopped working at midnight on August 15th, 2023 after a deal with Ford, General Motors, and Stellinis fell through.
In this blog post, we’ll explore everything you need to know about the UAW strike and how it helps electric vehicle makers in the process.
What is the UAW?
The United Auto Workers, or UAW, is a labor union representing workers in the United States and Canada. It was founded in 1935 and has a rich history of advocating for the rights of automotive workers. The UAW’s mission is to secure economic and social justice for all of its members and to improve working conditions across the industry.
The Origins of the UAW Strike
The first UAW strike that captured national attention began on September 16, 2019 and ended of October 15th, 2019. The 40-day strike involved nearly 50,000 UAW members and affected General Motors (GM), one of the largest automakers in the world. The primary reasons for the strike included job security, fair wages, affordable healthcare, and a share of GM’s profits.
Fast forward to 2023, this will be the largest UAW strike in history that targets all 3 Detroit automakers at the same time.
Workers deserve fair wages and a share of the substantial profits generated by the legacy automakers. They believethat their hard work should be adequately compensated.
The UAW is asking for a 40% wage increase and rejected the 18% offered by the legacy automakers.
Return of Pensions
Employees gave up pensions in 2007 during the global financial crisis to help automakers avoid bankruptcy. Now that CEOs are making record wages, employees at the big 3 automakers want them restored.
32-Hour Workweek with 40 Hour Pay
Employees also want a 4 day workweek but payment for 5 days. Many studies have shown that the 4 day workweek is better for productivity and overall happiness. Less is more.
Pension Increases for Retirees
Finally, retirees from the big 3 automakers want cost of living pension increases so they don’t live in poverty during retirement.
How Long Will the UAW Strike last?
The first UAW strike against GM lasted for 40 days, making it one of the longest strikes in the automotive industry in recent years. During this time, workers picketed outside GM facilities and received support from other unions and community members.
Now, this is the first time the UAW went on strike against the Detroit big 3 at the same time and there is no idea how long it will last.
Potential Resolution and Impact
In October 2019, GM and the UAW reached a tentative agreement, bringing an end to the strike. The agreement included wage increases, improvements in healthcare benefits, and a path for temporary workers to become full-time employees. It also addressed some job security concerns.
The original UAW strike had several notable impacts:
- It highlighted the importance of collective bargaining in the labor movement and brought attention to the challenges faced by workers in the automotive industry.
- The strike inspired other labor unions and workers to advocate for their rights and better working conditions.
- It emphasized the role of labor unions in addressing income inequality and ensuring that workers receive a fair share of the profits generated by corporations.
Most American Workers are Underpaid
The UAW strike is just one example of the ongoing struggles faced by workers across various industries. It underscores the importance of organized labor and collective bargaining in ensuring fair treatment and better working conditions for all workers.
UAW Strike Helps EV Stocks like Tesla
EV stocks will benefit greatly from the UAW strike because many consumers will be forced to buy electric vehicles once the backlog supply from the legacy automakers dries up.
Jeff Schuster, head of automotive for the Global Data research firm, said Stellantis has the most inventory and could hold out longer. The company has enough vehicles at or en route to dealers to last for 75 days. Ford has a 62-day supply and GM has 51.
Here are some of the EV companies that will benefit:
- Tesla (TSLA)
- Lucid (LCID)
- Rivian (RIVN)
- Nikola (NKLA)
If the UAW strike continues then investors could profit by shorting or buying puts on Ford (F) and General Motors (GM) stock.
Alternatively, you could buy calls on EV stocks such as Tesla (TSLA) due to increased demand for electric vehicles during the strike.
The UAW strike serves as a significant chapter in the history of labor strikes in the United States. It shed light on the challenges faced by automotive workers.
Moreover, it showcased the enduring power of labor unions in advocating for workers’ rights and their role in the broader labor movement.
The UAW strike is a reminder that when workers unite and stand up for their rights, they can achieve meaningful change in the workplace.