Sep 18, 2023

The United Auto Workers strike.

Factory photos of the all-electric Ford F-150 Lightning. Image: Automotive Rhythms
Factory photos of the all-electric Ford F-150 Lightning. Image: Automotive Rhythms 

Plus, the responses to Friday's piece.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”


Today's read: 12 minutes.

👷‍♂️
The United Auto Workers union has gone on strike. How bad will it get? Plus, some responses to Friday's piece on Ashton Kutcher and a reader question about President Joe Biden's energy policies.

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Thank you...

To all the people who read Friday's piece with an open mind. To my surprise, the feedback was overwhelmingly positive. Even the critical notes were mostly delivered with respect. So many people also wrote in to share their own personal stories, whether as victims of sexual assault or experts in the field. I'm going to try to reply to you all over the next few days. 

Here are a few snippets of the positive and critical feedback we got:

"Brave, fabulous writing — as always. Makes me grateful to receive the Friday messages."

"I’m so not proud of you for being brave enough to write this. Be even braver, and talk to people who study the kinds of people who endanger women and children in this very way."

"This was masterful... We’re becoming Isaac Saul ride-or-dies over here."

"I read your piece and I do not believe you have or can understand what it feels like to have been a victim of sexual assault if you haven’t experienced it, which I very much hope you never do."

You can read the piece here.


Quick hits.

  1. Hunter Biden was officially indicted on three federal charges related to a 2018 gun purchase. A plea deal that would have prevented a criminal trial fell apart earlier this summer. (The indictment)
  2. Rep. Lauren Boebert (R-CO) apologized after surveillance video was released showing her vaping and causing a disturbance at a theater in Denver earlier this month. She had previously denied allegations that she disrupted the show. (The apology)
  3. Senate Majority Leader Chuck Schumer (D-NY) has directed the Senate's Sergeant at Arms to no longer enforce the chamber's dress code. (The decision)
  4. The Texas Senate voted on Saturday to acquit the state's attorney general Ken Paxton after a nine-day impeachment trial that divided the state’s Republican party. (The trial)
  5. Three men were found not guilty on charges tied to a plot to kidnap Michigan Gov. Gretchen Whitmer (D). 14 men have already been charged, nine of whom were convicted and five cleared. (The acquittal)
  6. BREAKING: Rep. Jennifer Wexton (D-VA) announced she won’t seek re-election after being diagnosed with Parkinson’s disease. (The announcement)

Today's topic.

The United Auto Workers strike. On Friday, nearly one in 10 unionized auto workers in the United States went on strike, deploying a new strategy to push Detroit's three major automakers into raising wages. The unions are striking simultaneously at General Motors, Ford, and Stellantis (owner of Chrysler) for the first time in history, hoping to negotiate higher wages at a profitable time in the industry. The strikes are happening at GM's assembly plant in Wentzville, MO, Ford's assembly and paint plant in Wayne, MI, and Stellantis' assembly plant in Toledo, OH.

UAW President Shawn Fain, the first UAW president ever chosen by direct election, is leading the strike. Fain said the auto workers will gradually expand their strike to include additional plants — or even all of them — if the automakers don't meet their demands. The simultaneous strikes across all three companies and the gradual increase of striking plants is a novel strategy designed to put maximum pressure on the companies.

Previously, the 88-year-old union has only negotiated with one automaker at a time, limiting its impact on the industry. Striking workers will receive $500 a week from the union, which has an $825 million strike fund.

The union is asking for a 36% pay increase over four years and other benefits, according to the Associated Press:

In addition to the wage increases, union negotiators are also seeking: restoration of cost-of-living pay raises; an end to varying tiers of wages for factory jobs; a 32-hour week with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans; and pension increases for retirees, among other items.

Auto workers say this amounts to their fair share of the net $164 billion of revenue made by the Detroit Three automakers in the last decade, including $20 billion this year, and helps recover concessions made by the union during the 2008 recession. Meanwhile, CEOs of the big three automakers earn multiple millions of annual compensation, and UAW estimates that their pay has increased by 40.1% since 2019.

The union is also negotiating to be able to represent workers at 10 electric vehicle battery plants, many of which are being built in joint ventures between automakers and South Korean battery makers. Union leaders fear a transition from gas to electric vehicles, which have fewer parts and will cost many auto worker jobs, and say they want to secure a future for workers who may lose their jobs at traditional manufacturing plants in the coming years.

In their latest offer, GM and Ford proposed a 20% pay increase and agreed to a return of cost-of-living adjustments, but the two sides were still far apart on other benefit proposals. Ford said they are looking to strike a deal that ensures they can compete with non-unionized auto makers like Tesla, who already have a "cost advantage" on the Detroit Three.

Notably, the UAW has also held out on endorsing President Biden’s reelection campaign during these negotiations, despite Biden calling himself “the most pro-union president in American history.” It has publicly opposed subsidies to electric car manufacturers like the ones in the Inflation Reduction Act that don't include labor standard stipulations.

Today, we're going to take a look at some reactions to the strike from the right and left; then I’ll give my take.


Agreed.

Many on the right and left agree that this dispute will have a major impact on President Biden's energy policies. Both sides say the strike pits Biden's electric vehicle agenda against his support of unions, and examine how the electric vehicle transition is going to impact auto-industry jobs.


What the right is saying.

  • Many on the right criticize Biden's energy agenda and say the administration helped cause this problem.
  • Some argue a transition to electric vehicles is already hurting the auto makers, and the strike will only hurt them more.
  • Others say Tesla and China are going to come out as the big winners.

The Wall Street Journal editorial board called it a "strike made in Washington."

The Biden administration is "mandating a rapid transition to electric vehicles," but "the UAW knows that EVs require fewer workers to make and will jeopardize union jobs making gas-powered cars," the board said. "But the companies already lose money on EVs and worry about making too many concessions to the UAW that will cause them to lose even more as they are forced to build more EVs... The Biden Administration, with California as its co-enforcer, is mandating that EVs make up an increasing share of auto-maker sales—two-thirds by 2032. California and other progressive states plan to ban all new gas-powered cars by 2035. But last year EVs made up less than 3% of Detroit auto maker sales.

"The companies have already laid off thousands of salaried workers, including engineers, to finance the EV transition. Assembly-line workers so far have been largely spared. But Mr. Fain knows that auto makers will ultimately have to shut down union plants that produce gas-powered vehicles, as Stellantis did a Jeep Cherokee plant last December. All of this raises the stakes for both sides at the bargaining table." Mr. Fain might "look like a hero to his members," but the ultimate losers will be those same members when their jobs disappear. "And they should direct some of the blame at the misguided industrial policy of the man in the Oval Office."

In The New York Sun, Liz Peek said these demands could "give Elon Musk and Xi Jinping the last laugh."

After the Great Recession, when taxpayers “forked over $80 billion to bail out GM and Chrysler,” union support evaporated when The Times "reported that GM employees were making all-in pay of $70 an hour, including wages and benefits, or roughly $10 to $20 more an hour than non-union labor in car factories... Everyone understood that a pay structure so out of whack with the going rate for labor (remember, this was 15 years ago) was uncompetitive and — yes — unsustainable. Especially in an era of free trade and international competition," Peek said.

"The UAW argues that pay to Big Three executives has gone up 40 percent over the past decade, while their average pay of $28 an hour hasn’t kept pace. It is true workers have been left behind because of President Biden’s inflation, and UAW members have been further disadvantaged by the deal reached in 2008. But the union’s demands are impossible," Peek wrote. "Hourly labor costs for the Big Three today, including wages and benefits, average $66 an hour, compared to $45 an hour at Tesla and a fraction of that at a Chinese plant. The UAW’s demands would boost pay to $136. Does Joe Biden think that GM, Ford and Stellantis can afford that?"

In Hot Air, John Sexton said Tesla is the big winner of the UAW strike.

"Tesla is not a union shop which means it is in no danger of a strike or of being forced to have to pay workers 40% more for the same job," Sexton said. "The reality is that ‘analysts’ have been saying for years that the competition was coming to eat Tesla’s lunch but the reality is that most non-Tesla EVs aren’t selling that well. As for the idea that the rival automakers have a cost advantage over Tesla, that is a complete fantasy. At least when it comes to GM and Ford, they are having to build up their EV lines from scratch at a cost of billions of dollars.

"So the idea that Detroit is in danger of losing their cost advantage is just a pure fantasy... They haven’t yet been able to produce much of anything in the EV sector that isn’t losing them money with every sale. Meanwhile, Tesla continues to make a solid profit on every car. In fact, when it comes to profit, Tesla is outperforming the most successful car manufacturers on the planet," Sexton said. “That’s the starting point here and now the UAW is striking to demand a 40% wage increase. If you’re Tesla, this is terrific news because it means the competition is about to fall even further behind. It also creates a real pickle for President Biden who is simultaneously trying to side with the unions and also trying to make ‘Bidenomics’ his reelection theme."


What the left is saying.

  • Most on the left support the strike and suggest it is a fight for all workers.
  • Some criticize Trump and other self-styled populists for not supporting the auto workers.
  • Others say this strike, along with the green energy transition, may hurt workers in the long run.

In MSNBC, Hamilton Nolan said this is "bigger than the auto industry" and we should rejoice.

"Generations of workers are rightly furious that their pay has remained stagnant for decades as executives and investors reaped the gains of their increasing productivity. Autoworkers have been exposed to the full force of these trends," Nolan wrote. "They and their unions made grand concessions after the 2008 financial crisis to save their industry. When the companies’ fortunes improved, they forgot the workers’ sacrifice. An Economic Policy Institute analysis found that in the past decade, the Big Three have made $250 billion in profits, sent $66 billion of that to investors and raised CEO pay by 40%. Meanwhile, the average auto manufacturing worker is earning almost 20% less today than they did in 2008."

"In this, the auto industry is a perfect microcosm of the American economy writ large. This bifurcation between the top and everyone else — the trend that has eroded the middle class, destroyed the classic ‘American dream’ of supporting a family on a blue collar income, and fed the blanket disgust in our system that helped fuel the rise of Donald Trump — cannot continue forever. Something has to give," Nolan said. "So the UAW is going big."

Bloomberg's editorial board said Biden is going to have to choose between his green energy agenda and unabashed union support.

The stakes are high, as a "a 10-day strike could reduce total US output by $5.6 billion, including $859 million in lost wages and nearly $1 billion in forgone earnings. A longer dispute could raise already inflated car prices, hammer steel producers and parts suppliers, narrow product selection, delay rollouts, and impose broad economic damage in states such as Michigan, Ohio, and Wisconsin... Asking for a raise after years of punishing inflation — and amid soaring corporate profits — is surely reasonable," the board said.

"Yet there are two problems with the UAW’s approach. One is that meeting the totality of these demands would incur unsustainable expenses. Hourly labor costs would surge from about $64 to more than $150. That compares to about $55 per hour at non-union US plants of foreign automakers and about $45 an hour at Tesla Inc. factories." Meanwhile, “the Biden administration has offered enormous subsidies for EVs, while the Environmental Protection Agency plans to mandate that 67.5% of new vehicles sold by 2032 be electric (up from 5.8% last year)," the board said. "If Biden’s EV vision is to be realized, Detroit will likely need fewer workers with less generous compensation packages, precisely the opposite of what the UAW would like."

In Jacobin, Paul Prescod called out Donald Trump for standing with the corporate elite.

"Surely the self-styled populist, whose political brand rests on claiming to champion American manufacturing workers, extends his full-throated support to the union, right? Think again," Prescod said. "Instead, Trump framed workers’ economic fight against corporate giants Ford, General Motors, and Stellantis as a partisan skirmish, lumping the UAW in with Joe Biden. In a statement delivered late last month, Trump railed against UAW leadership... Trump even encouraged autoworkers to stop paying their union dues.

"He ended in campaign mode by promising, 'When I am president, I will deliver higher wages for autoworkers, I will protect your jobs' — odd promises to make while simultaneously voicing his opposition to the UAW’s fight for those very things," Prescod wrote. Later, Trump refused to give a clear answer about what side he was on. "Taken together, the fulfillment of these demands would represent arguably the greatest victory for US autoworkers in generations. Trump has a clear choice of who to stand with: manufacturing workers or multinational corporations. The public has made its stance clear, as a recent Gallup poll showed a whopping 75 percent of Americans sympathize with autoworkers over Big Three executives."


My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

  • Like most Americans, I'm rooting for the workers here.
  • They deserve a larger share of the profits, have leverage for this fight, and chose the right moment to go on strike.
  • But I also think there is a good chance this blows up long-term, and impacts the workers in a very negative way.

I don't necessarily consider myself a "populist," but I do identify with working class Americans — especially when their needs and wants are juxtaposed to America's corporate elite. There is a reason upwards of 70% of Americans take the side of labor in recent disputes, and it's that so many of us know what it feels like to work long, hard hours without being able to save money, cover a health emergency, or buy a home. The American dream is in short supply.

So I come to this story sympathetic to the union workers: I think they are right to strike, and they've chosen the right moment to go on offense. As I've said recently, this is a powerful moment for workers, and a combination of the free market and organized labor has given them an opportunity to get what they deserve. They should take advantage of it.

Whether the demands laid out in these contracts could come back to hurt them, though, is a very real risk.

Full-time auto workers make $18-32 per hour, but the average worker costs manufacturers about $64 an hour in wages and benefits combined. Labor costs would go up to $150 per hour if this contract were fulfilled. While some Americans would kill to make $32 per hour, anyone who is working full-time for $18 an hour knows how difficult it is to make ends meet in today's economy. Yet that kind of massive increase in cost at the Detroit Three’s scale is bound to be disruptive in ways we can't yet predict.

The history here is, of course, important. Auto workers made major concessions during the 2008 recession, which helped save the industry, and therefore the U.S. economy, and have kept grinding away as record profits came back. Like so many other industries in the U.S. over the last few decades, an inordinate amount of that profit has gone to executives and shareholders. Calling for an equal share in the profits — and demanding the auto industry close the gap between CEO and labor compensation — resonates. That's why three in four Americans, including me, support the workers.

As Shawn Fain has put it: "Record profits mean record contracts." Why not ask for the world and see what you get? You don't have to support unions to believe in this fight. After all, if the workers had no leverage, they wouldn't be out on strike in the first place (nor would the first offer from the auto industry include 20% pay raises).

But it's also true that these workers are fighting a rising, relentless tide. Electric vehicles are coming, and while government subsidies have increased that demand, it was coming with or without the Biden administration. Plainly, Americans and foreigners are interested in EVs, which will be increasingly cost-effective as batteries and infrastructure improve. More of these vehicles will inevitably mean fewer auto industry jobs (because they require fewer parts) and even more foreign competition (because so many other countries are ahead of us on EV and battery manufacturing).

Reading these arguments, there is no real retort to the simple math: The Big Three are already losing the cost war, and if their labor gets a lot more expensive while the country transitions to electric vehicles they are going to start losing to the competition. Losing to the competition means lower profits, which means more layoffs, which means more pain for the workers. Every time these workers get more expensive they also get more vulnerable.

Perhaps there is a deal structure here where union workers get their pay and benefit asks and also move the needle significantly on protecting electric vehicle jobs. Maybe, at full throttle, the Big Three find a way to compete with Tesla and other foreign markets on the electric vehicle transition. Or maybe that transition happens much more slowly than Biden and others want, and the Big Three can keep profiting enough off their large gas-powered SUVs and trucks to make it all work. But there is a lot of uncertainty and wishful thinking in there.

I'm rooting for the workers. When you hear their stories, it's hard not to. They look and sound like so many Americans I know who have watched their work become devalued over the last few decades. But the reality of the numbers here is enough to give me pause. As for Biden, it’s obviously a complicated political moment, but he'll likely be either out of office or not up for re-election when the lasting impact of this strike settles in. 

Given all the dynamics of this strike — the energy transition, the foreign competition, and the government subsidies aiding the transition — a short-term win for workers may set the Big Three up for a long-term downfall. I just hope Fain and UAW know what they're doing — and have a long-term plan for self-preservation.


Your questions, answered.

Q: My Republican friends tell me that all our inflation woes are due to Biden's energy policies. Do you agree?

— Anonymous from Lexington, South Carolina

Tangle: Your friends are exaggerating, because there’s no way Biden’s energy policies are responsible for “all our inflation woes.” I don’t personally agree that they’re even among the major drivers, but there is certainly an argument for that.

Here’s that argument: One of the biggest drivers of inflation last summer when the CPI’s month-over-month growth was at its peak was fuel costs, and gas prices were particularly high. Biden’s administration had been publicly signaling for the first half of his term that they would be pursuing an energy policy that focuses on renewables and starts to divest in oil and gas. That signal to the industry of lowering supply meant, in the face of steady demand, oil companies would raise their prices. However, the administration was hamstringing the industry’s ability to respond, as represented by Biden’s trip to Saudi Arabia in July to negotiate for more production out of the Middle East, despite enormous reserves at home.

That argument misses a few things. For starters, inflation was and remains a global issue, and the inflation rate in the United States has been comparatively middle-of-the-road. It doesn’t make much sense to credit our policies for global prices, and much of the global rise in energy cost was due at least in part to the war in Ukraine. Then there’s the fact that persistent inflation has been driven by Core CPI, which does not include the more volatile fuel and energy prices.

Perhaps most importantly, however, is the fact that the United States’ production of crude oil has been steadily increasing since Biden took office, and is near the all-time high we hit right before the start of the pandemic. Speaking of the pandemic — that thing that upended the entire world economy — the general story of what’s caused inflation that I find most convincing is one that factors that in.

That story goes like this: The global Covid pandemic jarred the economy to a halt, disrupted the supply chain, and spiked the ratio of job openings to unemployment. This caused major price increases, which were pushed over the edge by federal fiscal policy. Lots of government stimulus along with pandemic saving caused a massive spike in demand after the "return to normal." In response, the Fed raised interest rates to curtail inflation, which after decades of near-zero interest rates required a pretty long and significant correction. It’s not monocausal, but it’s still economics 101.

As for Biden’s energy policies, I don’t think they were a big factor in causing inflation, and I’m actually optimistic about them moving forward. Oil production is pretty high, and we’re investing in an “all-of-the-above” approach to transition into an energy future that’s less reliant on fossil fuels. And if we keep trending in our current direction, there is a potential outcome for the U.S. in which we're more energy-independent and less carbon-emitting — relying on a combination of oil, natural gas, wind, solar, and nuclear power.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to my inbox) or fill out this form.


Is college worth it?

We put together a YouTube video exploring the pros and cons of attending college. Is it still worth the cost? Or worth it for the experience? Or should you go another route?


Under the radar.

Hackers are disrupting a number of hotels and casinos owned by MGM reports, with outages lasting for several days. Guests have reported hours-long waits at front desks, inoperable slot machines, key cards that don't work, and other issues at locations from Las Vegas to New York. Officials believe the group responsible is called Scattered Spider — a hacker collective made up of 19 to 22 year-olds who used a rather rudimentary tactic to get inside: They called the company help desk and imitated an employee found on LinkedIn to get access to their account. Axios has the story.


Numbers.

  • 67%. The percentage of Americans who say they approve of labor unions, according to an August 2023 Gallup poll.
  • 75%. The percentage of Americans who say they side with UAW in their negotiations with U.S. auto companies.
  • 43%. The percentage of Americans who say they want labor unions to have more influence than they have today. 
  • 26%. The percentage of Americans who say they want labor unions to have less influence than they have today. 
  • 88%. The percentage of Democrats who say they approve of labor unions. 
  • 69%. The percentage of independents who say they approve of labor unions. 
  • 47%. The percentage of Republicans who say they approve of labor unions. 

The extras.

  • One year ago today we didn't have a newsletter, but I had just written a Friday edition called 'Seeing Ghosts,' one of my favorite pieces of last year.
  • The most clicked link in Thursday's newsletter was Yoda, the dog who caught the escaped convict in Pennsylvania.
  • Other options: 829 Tangle readers responded to our poll asking about the gun ban in New Mexico, with 52% opposing the ban but sympathetic to Governor Lujan Grisham's intention. 37% opposed the ban, but were not sympathetic to the governor's intention, and 8% supported the ban. "The governor had other options without doing something unconstitutional," one respondent said.
  • Nothing to do with politics: What was that about Mexican alien mummies?
  • Take the poll. What do you think of the UAW strike? Let us know!

Have a nice day.

Paramedic Pete Lewin is offering a service to help firefighters, police officers, and soldiers in the United Kingdom suffering from PTSD by taking them swimming with his Newfoundland dogs. Lewin chose Newfoundlands because they were originally bred as service and rescue dogs in fishing fleets. Those taking part in the therapy put on a dry suit and lifejacket and wade into the middle of a lake, where they float on their backs in silence. When their time is up, they are “rescued” by a Newfoundland: the dog swims out to them and gently tows them back to shore. “The dogs don’t judge you,” said Kevin Robinson, who did four tours in Northern Ireland during the Troubles. “All they want to do is look after you. It keeps me happy for two to three days.” The Week has the story.


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Isaac Saul
I'm a politics reporter who grew up in Bucks County, PA — one of the most politically divided counties in America. I'm trying to fix the way we consume political news.