UAW Strike Demands Fairness for Workers, as US Automakers Spend Billions on Stock Buybacks

Interview with Lucy Dean Stockton, editor and reporter with The Lever, conducted by Scott Harris

The United Auto Workers union strike against the Big Three U.S. automakers, launched Sept. 15, is the first time the UAW has struck all three of the nation’s unionized car manufacturers at the same time. The union is employing a tactic of selective escalation, striking one assembly plant at each company, keeping management guessing as to their next targets. GM and Ford have responded to the strike by announcing that they will temporarily lay off 2,600 workers at non-striking factories because those plants depend on parts made at factories on strike.

Only 8 percent of the UAW’s 150,000 total members are currently on strike. But UAW President Shawn Fain warned that unless serious progress is made in negotiations toward an agreement, the union will expand its strike against General Motors, Ford and Stellantis.  The UAW is seeking a 36 percent wage increase over four years, expanded benefits and elimination of a tiered wage structure as the industry shifts toward making electric vehicles that could result in future plant closures.

Between The Lines’ Scott Harris spoke with Lucy Dean Stockton, an editor and reporter with The Lever investigative news site. Here she talks about the union’s demands and billions of dollars the companies have spent on stock buybacks.

LUCY DEAN STOCKTON: The UAW, they’re demanding pretty basic things, a restoration of defined pension benefits. They have requested shorter workweeks, which is one of their, I would say, more aggressive demands that they’re willing to compromise on. They want stronger job security and they’re seeking the elimination of tiers where new employees sign on for lesser pay and are supposedly able to catch up to older workers in the pay scale, but often never do.

Shawn Fain, UAW president, specifically has looked at how Big 3 spending on Big 3 profits have gone up 65 percent in recent years, whereas autoworker wages are up really just 6 percent.

Shawn Fain has this common refrain that says if Detroit’s three automakers raise CEO pay by 40 percent over the past four years, then workers should get a similar raise. So in their demands, they started by requesting a 40 percent increase in wages.

SCOTT HARRIS: Lucy, the union justifies demands that they’ve made on the Big 3 automakers on the basis that these big car companies have record profits.
And your investigation found that these three auto manufacturers authorized $5 billion in stock buybacks over the past 12 months.

Maybe just summarize the profitability and what the indicators are of this stock buyback. What does it tell us and the country about the economic position that these big automakers are in?

LUCY DEAN STOCKTON: Sure. Yeah, no, that’s exactly right. I mean, the Big 3 auto companies’ spending on stock buybacks is up 1,500 percent.

They spent $5 billion on stock buybacks this past 12 months, even though they knew there was an impending strike. And, in fact, Stellantis actually authorized $500 million more in stock buybacks just last week, days before the strike. So it’s really actually quite shocking.

For those who don’t know, stock buybacks are also known as share repurchases, but they basically artificially inflate value for shareholders. When companies use capital or the cash they have on hand to buy back their stocks from the market this inflates the prices of existing shares because it causes the public announcement that excites prices, but it also removes stocks from the market, which makes the shares that people already hold have more value. And it lets shareholders sell off those shares at a profit, which basically effectively enriches Wall Street.

And that often comes at the cost of long-term investments ensuring the companies’ ability to exist. So everything from their own investment in research and development to having cash on hand to properly and fairly compensating their workers — instead of spending on any of those things they’re spending money to enrich shareholders.

And it’s also been a big year for stock buybacks. Last year in 2022, all S&P 500 companies set records. They spent over $923 billion on stock buybacks and which is, I think, a pretty bad sign for our economy in general. But the recent buyback spree was particularly bad at these big car companies. We saw the exact figures that I have, but I mean, we saw them spend basically and authorize billions of dollars to reap in $21 billion in profit and then basically authorize $5 billion in stock buybacks instead of meeting any of these worker demands.

SCOTT HARRIS: Well, Lucy, I wanted to get your reaction to the automakers claim that the United Auto Workers Union demands would put these companies at a competitive disadvantage, especially against nonunion carmakers down South. And there are a lot of nonunion car manufacturers down in several southern states, anti-union southern states. I think that includes Toyota, BMW, Nissan and Volkswagen. And I wonder how you read that response.

And we also we also have Ford CEO Jim Farley’s claim that the UAW proposals would bankrupt Ford.

LUCY DEAN STOCKTON: We know that’s likely not true, although the longer they delay the strike, that can’t be a good financial decision for them. But some estimates have that they’ve lost like $5 billion the next ten days. I think that’s a pretty common refrain. And I think Shawn Fain and other advocates have really called out that “competitive” is usually a code word for “race to the bottom.”

What we should be asking is not why can’t we meet these union demands, but how do we make sure that we can bring these nonunion workers into unions? All workers deserve to be part of a union so that they can negotiate for better conditions at their companies and better pay and really get a fair share of the profits that they helped create.

But I think that globalization has been very complicated and it has, I think, made this sort of competitiveness nuanced. That said, I think that the Big 3 could certainly meet the demands that the UAW is asking for and end the strike today if they wanted to. They have the profits to do so and they have the CEO compensation to do so.

So saying that it will put them at a “competitive disadvantage” is really just rhetoric.

Listen to Scott Harris’ in-depth interview with Lucy Dean Stockton (26:30) and see more articles and opinion pieces in the Related Links section of this page.

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