?? What's the deal with the UAW strike?! ??

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Good Morning Party People! ??

ICYMI - Billionaire property developer, Tim Gurner stated that “we need to see unemployment rise. We need it to rise by 40-50%. We need to see pain in the economy.” Booo!

Reminds us of the CEO who applauded their employee for selling their dog.

You, sir, are not invited to The Office Party.

Here’s what we got today:

Today is a deep dive into the United Auto Workers (UAW) strike. GM just threatened to send 2,000 workers home. Ford cut 600 jobs. The implications on the economy are potentially serious. And we’re here to fill you in on everything you need to know.

But first…

The results from last week’s poll…

The alien is…

• 27% said “real” ??
• 73% said “fake” ?

And 0% said “cake” ?? (see below)

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What’s The Deal With The UAW Strike?

The United Auto Workers (UAW) union is on strike against “Detriot’s Big Three” — General Motors, Ford, and Stellantis. A simultaneous strike has never happened in the 88-year history of the UAW.

We are now 4 days into the strike. GM threatened to send 2,000 workers home and Ford cut 600 jobs. UAW members are marching through downtown Detroit. 12,700 workers are on strike. Tensions are rising.

A Little Background…

The UAW is a union with 391,000 active members. It was founded in 1935 and is known for gaining higher wages and pensions for automobile workers. The union has net assets of $1,026,568,450 (yes, that’s billion with a B). Their strike fund is quite large (see later in the article).

In March, Shawn Fain took over as President of the UAW (the ringleader of this operation). And he’s certainly not shying away from making headlines.

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What Does The UAW Want?

The UAW wants a 40% pay increase. Pensions, quality of life improvements, and cost of living adjustments are part of negotiations as well.

The companies believe the UAW’s demands would be too costly for the industry. The Big Three countered by offering increases of 17%. The UAW isn’t budging. They also want a 4-day work week (who doesn’t).

The UAW has a strike fund of $825M, meaning they can draw their strike out for up to 6 weeks (potentially longer).

We have a good ol’ fashioned Western standoff.

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Exploring The Implications

The strike came at an awfully inconvenient time for the companies. There was already a vehicle shortage, leading to an increase in prices. At 10 days in, the strike could lead to economic damages to the tune of $5.6M.

If the strike were to last through the end of the year, some believe it could push the economy over the edge and into recession territory.

Treasury Secretary, Janet Yellen had this to say: “I think it’s premature to be making forecasts about what it means for the economy. It would depend very much on how long the strike lasts, and exactly who’s affected by it”.

?

For every GM job there’s 6 other jobs in the economy that depend on us running, so we gotta get back to work."

--GM CEO Mary Barra

Upstream of the strike, companies that supply parts to the carmakers could feel the effects. Downstream, the thousands of car dealerships will inevitably feel the pain. Car buyers will likely experience higher prices too.

Tesla Is Caught in The Crossfire…

It wouldn’t be newsworthy unless Musk chimed in. But Tesla is actually caught in the crossfire. The UAW tried to unionize Tesla back in 2018 (and failed). They accused Musk of interfering with unionizing efforts from his tweets (classic).

The National Labor Relations Board ordered Musk to delete the tweet and rehire a Tesla employee who was allegedly fired over organizing activity. The 5th Circuit Court of Appeals is currently evaluating the order.

Here’s what Elon had to say (on X)…

“We pay more than the UAW btw, but performance expectations are also higher.

Quite a few of our factory techs who work on the line have become millionaires over the years from company stock grants.”

— Musk

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How Does This End?

On Sunda, UAW President Fain rejected Stellantis’ (Chrysler’s parent company) offer of a 21% pay increase. Fain cited an average pay increase of 40% for the three auto companies CEOs in recent years.

The UAW is asking for a similar increase over the next 4 years as well as an immediate 10% increase upon a formal agreement.

Late on Monday, UAW President Shawn Fain announced that if the companies don’t make progress, more members will strike.

But the companies aren’t devoid of leverage either. If things drag on, they could look to move production elsewhere (this happened when Boeing moved some production to South Carolina).

Stay tuned to see how this ends…

Hopefully, you won’t have to buy a new car soon. Prices might be up.

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