President Biden disembarks from Marine One on the South Lawn of the White House Aug. 14. (Yuri Gripas/Abaca via Bloomberg News)
President Joe Biden urged the United Auto Workers union and Detroit’s Big Three automakers to come to a “fair agreement,” weighing in on tense contract talks with major implications for the U.S. economy.
Significant differences between the union and car companies on pay, benefits and transitioning to electric vehicles have raised concerns about a work stoppage when the current contract expires Sept. 14.
“I’m asking all sides to work together to forge a fair agreement,” Biden said in a statement Aug. 14. “The need to transition to a clean energy economy should provide a win‑win opportunity for auto companies and unionized workers.”
Biden called on General Motors Co., Ford Motor Co. and Stellantis NV to “take every possible step to avoid painful plant closings” and when job transitions are necessary, ensure they “are fair and look to retool, reboot and rehire in the same factories and communities at comparable wages, while giving existing workers the first shot to fill those jobs.”
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The president’s decision to speak publicly about the talks underscores concern inside the administration about the possibility of a strike or lockout. Biden has spent the summer seeking to turn around Americans’ dim views of his economic stewardship, and a work stoppage at U.S. auto plants could halt positive momentum for the economy.
In the last several months, Biden avoided supply chain-crippling labor disputes on freight railroads, at West Coast ports and between UPS Inc. and the International Brotherhood of Teamsters union. But the auto talks could be the most contentious yet.
The UAW is looking to boost wages, restore pensions for new hires, secure cost-of-living increases and cut hours. Those demands would add more than $80 billion to each of the Big Three’s labor costs, according to people familiar with the companies’ estimates.
The union has said they are looking to recover lost pay from the pandemic and ensure organized labor has strongholds in new electric vehicle and battery plants.
Fain by Emily Elconin/Bloomberg News
By backing some of the UAW’s core demands, Biden could generate goodwill with the union. The UAW has not endorsed Biden’s re-election, after backing him in 2020, amid their concerns with the move toward electric vehicles.
U.S. automakers are investing tens of billions in designing and building EVs and are looking to increase profits from conventional vehicle manufacturing to pay for the transition. UAW President Shawn Fain has accused the companies of engaging in a “race to the bottom” with EV and battery factories that will employ fewer workers making lower wages.
Biden has tapped senior adviser Gene Sperling to liaise with the union and auto companies during the negotiations. The president also met last month with Fain when UAW leaders were at the White House to brief senior staff on their positions in the talks, according to a White House official.
