An independent contractor hauls vehicles made at the Spring Hill General Motors manufacturing plant as union members picket at the GM engine plant in Spring Hill, Tennessee, on Oct. 30.Auto workers doing high-fives about the huge pay increases extracted from the Big Three automakers in the United States and Canada over the past couple of weeks should enjoy their moment in the sun – it won’t last.
Rising labour costs must be paid by someone, and it’s usually the consuming public in the form of higher sticker prices. But if they’re not buying new vehicles, the costs need to be picked up somewhere else or things slow down. It’s nothing personal, as the finance people say, it’s just math. Canadian auto workers recently reached similarly sweet three-year deals with GM, Ford and Stellantis, the latter still pending ratification. They include base hourly wage increases of nearly 20 per cent for production and 25 per cent for skilled trades over the lifetime of the agreement, including 10 per cent in the first year. By the end of three years, a top-rated production assembler will be paid $44.
Moreover, whenever a deal such as this is struck, unions often feel emboldened to pursue a strategy of manifest destiny and set their sights on organizing open shops. Armed with these wins, the UAW is expected to target non-union U.S. operations of Toyota, Honda – and the perennial favourite target, Tesla.