DETROIT — About 146,000 U.S. auto employees are set to go on strike this week if Normal Motors, Ford and Stellantis fail to fulfill their calls for for giant pay raises and the restoration of concessions the employees made years in the past when the businesses have been in monetary bother.

Shawn Fain, the combative president of the United Auto Staff union, has threatened to strike any of the three corporations that hasn’t reached an settlement by the point its contract with the union expires at 11:59 p.m. ET time Sept. 14.

Either side started exchanging wage and profit proposals final week. Although some incremental progress seems to have been made, a last settlement may come too late to keep away from walkouts by UAW employees at factories in a number of states. Any strike would doubtless trigger vital disruptions for auto manufacturing in the USA.

This is a rundown of the problems which might be standing in the way in which of latest contract agreements and what shoppers may face if a chronic strike happens:

WHAT DO WORKERS WANT?

The union has requested for 46-per-cent raises basically pay over 4 years — a rise that may elevate a top-scale meeting plant employee from $32 (all figures in USD) an hour now to about $47. As well as, the UAW has demanded an finish to various tiers of wages for manufacturing unit jobs; a 32-hour week with 40 hours of pay; the restoration of conventional defined-benefit pensions for brand new hires who now obtain solely 401(okay)-style retirement plans; and a return of cost-of-living pay raises, amongst different advantages.

Maybe most necessary to the union is that it’s allowed to signify employees at 10 electrical automobile battery factories, most of that are being constructed by joint ventures between automakers and South Korean battery makers. The union needs these crops to obtain prime UAW wages. Partially, that’s as a result of employees who now make elements for inside combustion engines will want a spot to work because the auto business more and more transitions to EVs.

“Our union,” Fain has mentioned, “is not going to face by whereas they substitute oil barons with battery barons.”

At present, UAW employees who have been employed after 2007 do not obtain defined-benefit pensions. Their well being advantages are much less beneficiant, too. For years, the union gave up basic pay raises and misplaced cost-of-living wage will increase to assist the businesses management prices. Although top-scale meeting employees earn $32.32 an hour, non permanent employees begin at just below $17. Nonetheless, full-time employees have acquired profit-sharing checks ranging this yr from $9,716 at Ford to $14,760 at Stellantis.

Fain himself has acknowledged that the union’s calls for are “audacious.” However he has argued that the richly worthwhile automakers can afford to lift employees’ pay considerably to make up for what the union gave as much as assist the businesses stand up to the 2007-2009 monetary disaster and the Nice Recession.

Over the previous decade, the Detroit Three have emerged as strong profit-makers. They’ve collectively posted web earnings of $164 billion, $20 billion of it this yr. The CEOs of all three main automakers earn a number of thousands and thousands in annual compensation.

WHAT HAVE THE COMPANIES PROPOSED?

A contract supply from Ford proposed a cumulative 10-per-cent pay elevate over the course of the four-year contract, plus a number of lump-sum funds, together with $6,000 to cowl inflation. GM has supplied 10 per cent as properly, with comparable lump sums. Stellantis (previously Fiat Chrysler) supplied 14.5-per-cent wage will increase over 4 years, with out lump sums within the wage bundle. However it proposed lump sums to cowl inflation. All supplied contract-ratification bonuses however rejected the shortened work week the UAW requested.

Below its proposal, Ford mentioned it calculated that common annual pay, together with time beyond regulation and lump-sum bonuses, would rise from a mean of $78,000 a yr final yr to greater than $92,000 within the first yr of a brand new contract.

The businesses have rebuffed the union’s calls for as too costly. The automakers’ argument is that they are going to be absorbing huge capital bills within the coming years to proceed to construct combustion-engine autos whereas on the similar time designing electrical autos and constructing battery and meeting crops for the longer term.

Additionally they contend that too lavish a UAW contract would saddle them with bills that may power up the retail costs of autos, pricing Detroit automakers above rivals from Europe and Asia. Outdoors analysts say that when wages and advantages are included, Detroit Three meeting plant employees now obtain round $60 an hour whereas employees at Asian automaker crops within the U.S. get $40 to $45.

In a letter Friday, Mark Stewart, Stellantis’ chief working officer, informed workers that the corporate’s supply to the union would make it financially possible to make use of employees into the subsequent era.

“It additionally protects the corporate’s future capability to proceed to compete globally in an business that’s quickly transitioning to electrical autos,” Stewart wrote.

WHAT HAPPENS NEXT?

The union and firms are persevering with to commerce wage and profit counteroffers and can doubtless proceed to take action into the work week forward of Thursday evening’s strike deadline.

On Friday, Fain mentioned that the corporate gives weren’t sufficient and that he had put them within the trash.

On the one hand, the UAW has struck a confrontational stance. Its members voted 97 per cent in August to authorize leaders to name for walkouts. It has filed unfair labor observe fees with the federal authorities towards Stellantis and GM — fees that the businesses have denied. And the union has referred to as contract gives from all three corporations “disappointing.”

Nonetheless, Fain has raised some hope by saying the union would not need to strike and would like to achieve contract agreements with the automakers.

WOULD A STRIKE CAUSE CAR PRICES TO GO UP?

Ultimately. GM, Ford and Stellantis have continued to run their factories across the clock to construct up provides on supplier tons. However that is additionally placing more cash into the pockets of UAW members and strengthening their monetary cushions.

On the finish of August, the three automakers collectively had sufficient autos to final for 70 days. After that, they might run quick. Patrons who want autos would doubtless go to nonunion rivals, who would be capable of cost them extra.

Autos are already scarce in comparison with the years earlier than the pandemic, which touched off a worldwide scarcity of laptop chips that hobbled auto factories.

Sam Fiorani, an analyst with AutoForecast Options, a consulting agency, mentioned the automakers had roughly 1.96 million autos available on the finish of July. Earlier than the pandemic, that determine was as excessive as 4 million.

“A piece stoppage of three weeks or extra,” Fiorani mentioned, “would rapidly drain the surplus provide, elevating automobile costs and pushing extra gross sales to non-union manufacturers.’’

COULD A STRIKE HURT THE U.S. ECONOMY?

Sure, if it is lengthy and particularly within the Midwest, the place most auto crops are concentrated. The auto business accounts for about three per cent of the U.S. economic system’s gross home product — its whole output of products and providers — and the Detroit automakers signify about half of the whole U.S. automotive market.

If a walkout happens, employees would obtain about $500 per week in strike pay —far in need of what they earn whereas they’re working. Consequently, thousands and thousands of {dollars} in wages could be faraway from the economic system.

The automakers could be damage, too. If a strike towards all three corporations lasted simply 10 days, it could value them practically a billion {dollars}, the Anderson Financial Group has calculated. Throughout a 40-day UAW strike in 2019, GM alone misplaced $3.6 billion.

WHICH SIDE HAS THE ADVANTAGE?

It is onerous to say. The businesses have loads of money available to face up to a strike. The union has an $825 million strike fund. However it could be depleted in just below three months if all 146,000 employees stroll out.

The union’s lack of ability to prepare U.S. factories run by overseas automakers represents a drawback for the union as a result of these corporations pay lower than Detroit corporations do.

However organized labor has been flexing its muscular tissues and profitable massive contract settlements in different companies. In its settlement with UPS, for instance, the Teamsters gained wages for its top-paid drivers of $49 an hour after 5 years.

To date this yr, 247 strikes have occurred involving 341,000 employees — essentially the most since Cornell College started monitoring strikes in 2021, although nonetheless properly beneath the numbers through the Nineteen Seventies and Eighties.