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Bloomberg Businessweek (January 29, 2024)

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Год выпуска: January 29, 2024

Автор: Bloomberg Businessweek

Жанр: Бизнес

Издательство: «Bloomberg Businessweek»

Формат: PDF (журнал на английском языке)

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Количество страниц: 84

That New Contract Smeel

Fresh off his historic victory in Detroit, UAW chief Shawn Fain is taking on Elon Musk, Donald Trump and labor’s green future

Last summer, Joe Biden invited Shawn Fain into the Oval Office and told him it was time for a “come to Jesus” chat. Fain, the newish president of the United Auto Workers, was leading a high-stakes contract battle against Detroit’s Big Three automakers, and he’d been telling members, reporters and anyone else who’d listen that he wanted more help from the White House. The implication was that the UAW was holding out for more reasons to join the raft of major unions that had already endorsed Biden in his likely rematch with Donald Trump. “The federal government is pouring billions into the electric vehicle transition,” Fain had told members in a May letter, “with no strings attached and no commitment to workers.” Fain’s endorsement matters. The Rust Belt delivered Trump the presidency in 2016 and helped seal Biden’s victory in 2020.

At the White House, Biden reminded Fain of his laborfriendly achievements to date and suggested he was doing his part to support autoworkers, according to people familiar with the meeting who spoke on condition of anonymity because they weren’t authorized to discuss it. They say that Fain told Biden, “We don’t agree,” and rattled off a series of issues where he said the president should do more. Biden would have to help, Fain told him, to make sure the next generation of auto jobs would be worth workers’ time. This isn’t how US labor leaders tend to behave. For a generation, they’ve mostly lined up behind Democratic nominees and taken what they could get. While both parties declined to recount the conversation in detail, the people familiar with the meeting say Biden, who frequently describes himself as America’s most pro-union commander in chief, seemed taken aback.

That’s Fain for you. Since taking office in March, the 55-year-old has combined a populist platform worthy of Bernie Sanders with a Trump-tier knack for spectacle. Where his predecessors symbolically shook hands with auto CEOs at the start of contract talks, he snubbed them. He took to addressing members while wearing a T-shirt reading “EAT THE RICH.” He livestreamed himself throwing an early contract proposal from his old boss, Chrysler (now Stellantis NV), into the trash. When the companies didn’t meet his terms, he made good on his strike threats, calling targeted work stoppages that began in September and grew in size over time.

In a series of interviews with Bloomberg Businessweek held between August and January in and around Detroit and Washington, Fain said his refusal to compromise along familiar lines—to accept lower pay, fewer benefits, less job security—was an overdue corrective after decades of disrespect from management, Washington and the UAW’s own ranks. “We have a horrible history in this union, in my work life, of setting expectations low and settling lower,” he said in an interview last summer at Solidarity House, the UAW’s headquarters, on the banks of the Detroit River. “Those days are over.”

All this bluster could be dismissed as just that if Fain hadn’t won. He called strikes at each of the Big Three’s most valuable plants, and by November he’d reached deals with all three that well exceeded what most observers thought possible. The UAW emerged from a punishing six-week strike with wage increases of 25%, or as much as 33% if you throw in cost-of-living adjustments. There’s no precedent for that in most members’ lifetimes. And temporary workers making less than $17 an hour will be converted to permanent and see their wages more than double, to above $41, by the time the contract expires in 2028. “The UAW was underestimated the whole way,” an uncharacteristically sedate Jim Cramer told CNBC viewers after the deals were announced. “It was just a real beatdown.”

Ford, General Motors and Stellantis declined to comment for this story.

While the ink dried on the contracts, Fain announced an even more audacious campaign. The UAW has 380,000 active members, about two-thirds of whom make cars or auto parts. (The rest include everyone from typesetters to postdoctoral researchers.) Fain is now trying to add another 150,000 by unionizing the US plants of 13 more companies, including BMW, Nissan, Subaru, Tesla and Volkswagen. Thousands of workers across those companies have already signed up for the organizing drive, and the union has set up a campaign for each. This is the essential next step, Fain says, toward protecting the UAW’s gains by making sure the industry’s green jobs are good ones.

Most everyone, including auto executives and Biden, says the transition to EVs is the future of the auto industry. The Big Three have committed to spending well over $100 billion on EVs this decade. “We have to embrace it, we have to endorse it and we have to lead it,” Fain told Businessweek shortly after the strikes ended. “So we’re going to do whatever we can to make it work for working-class people.” His UAW pullover was adorned with a brightly colored pin gifted to him by a buddy, a comment on his R-rated Detroit contract talks. It bore a tiny spinning “F---” arrow and a wheel of words that together completed phrases like “F--- THIS,” “F--- OFF” and “F--- YOU.”

Skeptics argue that Fain is just F-wheeling around, that higher wages will make it harder for US companies to compete in the EV market and that Americans don’t want the cars anyway. Electric models accounted for about 8% of US auto sales last year, according to researcher Cox Automotive, and carmakers in the US spent much of 2023 marking down their EVs, cutting profit forecasts and delaying production of new models. While US sales growth in EVs continues to outstrip that of the overall car market, Trump has made electrics a familiar bogeyman in his campaign for Rust Belt votes, and many workers believe him when he says the better way to protect their jobs is to keep betting on gas. In December, Stellantis warned it may lay off about 3,600 employees as it struggles to sell enough hybrids to satisfy California emissions rules.

Along with selling the cars, Detroit’s future success depends on whether Fain’s union can force the industry’s other players, including Elon Musk, to improve their wages, benefits and safety. Fain says where EV skeptics see the inevitability of market forces and Chinese labor standards, he sees a clear set of policy choices favoring the typical Businessweek reader over his colleagues. “There’s no future, in this path we’re on, for the majority of people,” he said at the UAW’s political headquarters in Washington this January. “We have to change the dialogue.”

Some UAW members worry that Fain is overpromising, but most of the dozens of members interviewed for this story say he’s earned enough credibility to take a big swing. “If you hear him say something, it’s nothing that you don’t hear a thousand times inside of these doors,” says Ford employee Landen Bradshaw. A growing number of allies at nonunion plants share his vision, too. “I want to be part of making that future,” says Deairatry Hilliard, a grandmother of three who’s volunteered to help the UAW organize her Rivian Automotive Inc. electric truck plant in Illinois. But also, she says, “I want something better for us. Not just for the future, but for us, now.”

Fain has a way of making people budge. In August, a month after his Oval Office chat—which Fain described in an interview as “a very honest discussion about where we stand”—the US Department of Energy announced an additional $12 billion in grants and loans to convert auto factories to produce hybrids and EVs, saying it would prioritize union shops and higher-paying jobs. A month later, Biden became the first sitting president to join a picket line. During his appearance in Michigan, he gave a brief speech before passing the mic to “Shawn Fain, your president.” Fain thanked him and told the crowd, “We know the president will do right by the working class.” Biden put his arm around a UAW member and stood by as Fain gave a speech about the union’s “war” against “corporate greed”—a bigger enemy, he suggested, than any foreign adversary. When Fain declared the working class to be “the true liberators,” Biden pumped his fist.

Big Three jobs were once good enough to lure Fain’s grandparents from Tennessee and Kentucky to Indiana. Three went to General Motors Co., including his father’s mother, whose parents had handed her off to an orphanage during the Great Depression. Another went to Chrysler in 1937, the same year the union was formally recognized. UAW jobs were “the gold standard,” says Fain, who in 1994 got his own job at the Indiana plant. He worked there until the UAW hired him in 2012, by which point, he says, the union’s clout and courage had collapsed.

After peaking at about 1.5 million in the 1970s, UAW membership fell by more than two-thirds over the following four decades, as auto work moved abroad and to new US plants the union failed to organize. In 2007, after Chrysler’s private equity buyout, the UAW agreed to concessions including a lower pay scale for subsequent hires. Fain, then a local elected UAW committeeman, wrote a letter telling union leadership that by agreeing to this deal “you might as well get a gun and shoot yourself in the head.” Once he joined UAW staff, he says, union brass chided him for failing to see the company as family.

In 2017 the Department of Justice announced a probe into UAW corruption and bribery by Fiat Chrysler Automobiles executives. The investigation led to convictions of 15 union and company officials, including two former UAW presidents, and a 2020 settlement that eventually led, early in 2023, to the UAW’s first direct election of its president by the full membership. Fain says he prayed a lot before deciding to run for the top spot, expecting that if he lost, he’d lose his UAW job, too. During a Zoom debate with Ray Curry, the UAW’s then-president, Fain declared himself “mad as hell” about the union’s recent track record, which he blamed on leaders with low expectations who “view the companies as our partners rather than our adversaries.” Curry declined to comment for this story.

Fain won a runoff by about 500 votes, but he quickly started acting like a man with a mandate. He sidelined some old-timers and filled key roles with outsiders, including a former Sanders organizer and a former reporter who’d been a fierce critic of past UAW leaders. Together, they started prepping for a fight. “Are you ready to rumble?” Fain asked at an August rally where he also quoted the Old Testament and Malcolm X. The crowd clapped and cheered.

He arrived at the bargaining table with lofty demands (pensions, four-day workweek) and announced that absent a deal, the Big Three could expect a strike the moment their contracts expired. Rather than bargaining with one company at a time, setting a ceiling on what the other two might offer, he negotiated with all three at once, leading them to copy one another’s concessions to keep up. Far from keeping the talks private and cordial, he livestreamed detailed, often blistering updates. “They look at me, and they see some redneck from Indiana,” he said during one stream. “They look at you, and they see somebody they would never have over for dinner or let ride on their yacht.”

At midnight on Sept. 15, Fain launched a strike at one plant from each company. Then he expanded the stoppage week by week, doling out punishment to whichever companies he felt were behaving poorly at the bargaining table. Workers watched his livestreams on their phones at their factories, waiting to learn if they’d be the next to walk out. When Ford Motor Co. showed up to negotiations without a new economic offer, Fain said, “You just lost Kentucky Truck,” and then, with a phone call, launched a surprise strike at its most lucrative plant. “Shutting down that plant harms tens of thousands of Americans,” Chairman Bill Ford said in an October speech, citing the impact on suppliers and communities as well as the factory’s workers.

At certain points, Fain threatened to strike GM and Stellantis’ entire US workforces. At another, Stellantis North America’s chief operating officer, Mark Stewart, suggested the company used temps partly because many workers couldn’t be trusted to show up for their shifts, and Fain accused him of “f---ing gall.” Fain, whose media team publicly highlighted Instagram posts that showed Stewart hanging in Mexico during bargaining, asked the COO if he and Chief Executive Officer Carlos Tavares should be docked attendance points for not showing up on time for talks. (Stewart, who left Stellantis this January, declined to comment.) “The proudest days of my life have been the birth of my children, the marriage to my wife, my acceptance into the Marine Corps and the day that Shawn Fain told Mark Stewart to go f--- himself,” says Daniel Vicente, a machine operator who was elected a UAW regional director as part of Fain’s ticket.

During a late October livestream, Fain told members the companies were right to say they were offering “record” contracts but that they still had a lot of bad years to make up for: “We’ve got cards left to play, and they’ve got money left to spend.” The deals he reached over the next couple of weeks showed he was right. Along with the massive across-the-board pay raises and the promotions for their longtime temps, the companies agreed to pay about $150 million in what amounted to back pay for the period workers spent on strike. GM and Stellantis also agreed to make it easier for workers at their EV battery plants, which are joint ventures with South Korean companies, to unionize and join the contracts. Biden called Fain from a state dinner with the Australian prime minister to congratulate him.

Auto executives have said that Fain’s polemics did lasting damage to the UAW’s relationships with their companies and that he could have gotten the same results without all the personal attacks. Company officials felt they were being unfairly cast as villains in a lefty morality play meant to drum up support for unionization. “This should not be Ford versus the UAW,” Bill Ford said in his October speech. “It should be Ford and the UAW versus Toyota, Honda, Tesla and all the Chinese companies that want to enter our home market.” GM leaders were rankled by a UAW video highlighting the eight-figure annual compensation of CEO Mary Barra and her peers, which depicted them wearing crowns as halos of $100 bills circled their heads. Some lawmakers and even local union leaders say it’ll take time to rebuild trust between the two sides. “If we stay too radical, we’re going to lose out on opportunities,” says one UAW local leader who spoke on condition of anonymity for fear of ticking off the national leadership. He says he worries about spooked automakers shying away from investment in battery jobs.

Fain acknowledges that he can misfire when shooting from the hip, such as when he briefly declared a battery deal with GM “dead in the water” while the two sides were just working through details. “‘Dead in the water’ probably wasn’t a good choice of words that day,” he says. “It’s just, when I have 20 cameras in my face and people throwing things at me, it was just the first thing that came out of my mouth.” But he notes the deal got done all the same. Workers at several prominent plants, including Kentucky Truck Plant, voted against the deals because they wanted more, not less. And allies say telling hard truths helped Fain galvanize his members, with spectacular results. “He has shown what grassroots leadership is all about,” says Sanders, who chairs the Senate’s labor committee. “Shawn is an honest guy, and he told them the truth,” adding that “it resonated all over the country.”...

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