Oh, those awful automotive profits
Shawn Fain isn’t the first labor leader to demonize corporate profits, but he is perhaps the most disingenuous.
Fain, the rookie president of the United Auto Workers, took more than 12,000 workers out on strike Friday morning in three targeted walkouts at Ford Motor Co., General Motors Co. and Stellantis facilities, the first time the UAW has hit all three companies at once in its 88-year history.
He led them off some of the best paying manufacturing jobs in the country with fire-and-brimstone language about the inequity of the American economic system and the evils of corporate greed, as witnessed by the record profits being posted by automakers.
“You cannot make $21 billion in profits in half a year and expect members to take a mediocre contract,” Fain said in declaring autoworkers are being treated as second-class citizens by the “billionaire” corporate executives.
President Joe Biden chimed in with the claim, “Those record profits have not been shared fairly with the workers.”
The implication from both the president of the union and the president of the United States is that autoworkers are being denied the fruits of their labor.
Reality paints a different picture.
Last year, the average Stellantis workers received a $14,760 profit sharing check thanks to a solidly profitable year for the automaker. Based on a 40-hour work week, that added about $7 to the $31.77 average hourly pay for a Stellantis production worker, or roughly an extra $280 a week.
Profit-sharing checks at General Motors ($12,750) and Ford ($9,176) were somewhat lower, but union workers at all three automakers enjoyed significant supplements to their base pay for helping their employers post fat profits. Those bonuses were uncapped in an earlier contract, so there’s no limit to how much production workers can reap as profits rise.
Add in benefits to the pay and bonuses, and the average hourly compensation to a UAW-represented autoworker is above $65 an hour.
The companies were willing to fatten that wage rate considerably this year to get a contract. Fain rejected offers of a 20% pay hike from Ford and GM and a return of Cost-of-Living Adjustments in favor of a strike.
The offer would have added more than $6 an hour to the top hourly production pay rate over the course of the contract, or more than $240 a week and more than $12,000 a year. It would have also shielded workers from seeing their pay eroded by future inflation.
This is what Fain considers to be “scraps.”
The profit-sharing checks are based, obviously, on profits. Remaining profitable requires the automakers to remain competitive. A significant increase in labor costs without a resulting hike in production will put the domestic automakers at an even greater disadvantage with their foreign competitors, whose labor costs are already $10 an hour lower.
The demands Fain has placed on the table, and so far, not backed away from, would push Detroit Three labor costs above $100 an hour and their profits to zero. That would not only result in much lower profits for the companies, but also much smaller profit-sharing checks for UAW workers.
There are some legitimate issues in play during these negotiations, including protecting workers in the industry’s transition to electric vehicles. But sharing the wealth isn’t one of them. This year’s profit-sharing checks are proof the UAW is doing quite well in that department.
— Detroit News