Policy Backgrounders

New UPS Union Contract Averts Potential Strike

July 28, 2023

US auto workers in the United Auto Workers (UAW) union plan to strike on Friday, September 15, unless new contracts are agreed with Detroit’s Big Three automakers. 

• Following high auto profits over the pandemic and stagnant compensation since the 2008 financial crisis, the union demands substantial increases to wages and benefits, in addition to structural changes on tiering of employees, retiree medical benefits, and union representation at new battery plants.
• Some automakers have been slow to respond, with the UAW filing a complaint last week of unfair labor practices against Stellantis and General Motors for failing to make counteroffers. The companies are expected to push back significantly as full union demands could potentially reduce the Big Three’s operating margins in 2026 by one-third.
• The negotiations also reflect tensions in implementing federal initiatives focusing on domestic production while maintaining high-quality jobs, as automakers face increasing cost pressures in their shift towards launching electric vehicle (EV) fleets.