The contract bargaining team at General Motors early this week kept a close eye on an economic counteroffer that its crosstown rival, Stellantis, had just presented to the UAW.
Hours earlier, GM had handed its own latest offer to the union.
At that moment, neither of those two proposals apparently matched the one from Ford Motor Co. "Ford has moved much further in our direction than the other two have," a UAW leader familiar with the negotiations but not authorized to talk told the Detroit Free Press on Monday.
This stuff normally doesn't play out in public this way.
And so if you're keeping score at home, you can see how things keeps changing in the ongoing contract negotiations involved the United Auto Workers union and the Detroit Three automakers. All sides are watching what the others are doing, then trying to match them or offer something that is more advantageous to their balance sheets while still meeting a union demand.
That's precisely what UAW President Shawn Fain had in mind when he decided this year to negotiate national labor contracts with all three automakers at once, and very publicly, refusing to name one company as the negotiating lead, instead playing each car company and their offers off the others.
In doing so, Fain discarded a tradition of negotiating a contract with one company first, then using that contract as a pattern for the other two.
"Shawn Fain's negotiating strategy for the members' demands serves to throw the companies off balance," said Marick Masters, a business professor and labor expert at Wayne State University. "The strategy reflects open communications, industry-wide bargaining with a labor-centered perspective, and a willingness to strike all three companies while waging a corporate campaign to put additional pressures on the companies to make more favorable agreements."
'Back door communications'
Since 1946, the UAW strategy has been to negotiate with three or more automakers separately but simultaneously at the beginning of negotiations, said Harley Shaiken, professor emeritus and labor expert at the University of California, Berkeley.
But then there was always the selection of a target company chosen in the final stages of the talks, sometimes days before the deadline. The tradition was started under famous UAW leader Walter Reuther in the 1940s, Shaiken said.
Louis G. Seaton, left General Motors vice president heading negotiating team for the company and United Auto Workers president Walter P. Reuther, shake hands before the start of the opening session on a new contract on March 25, 1958.
"The union having been in talks with all of them understood at that point which one would be most amenable to their core target demands," Shaiken said. "For the automakers, being the target was an advantage because they would have more control over the process and, on occasion, could settle for agreements less advantageous to their competitors."
Once the agreement was reached with the target, the subsequent agreements with the others would "never be a carbon copy," Shaiken said, but rather set the pace.
"This time around there has clearly been more transparency and the UAW has made a serious effort to have greater involvement at an earlier stage with its members," Shaiken said. "Floating the notion of striking any automaker if they haven’t reached an agreement before the strike deadline and threatening to strike all three simultaneously have resulted in considerable turmoil among investors, but not necessarily of the teams at the bargaining table."
A 2023 Cadillac LYRIQ rolls off the assembly line and drives into a special event celebrating the start of retail products for the electric vehicle on March 21, 2022, at the General Motors Spring Hill assembly plant in Spring Hill, Tennessee. The event marks another milestone for GM and its commitment to an all-electric future.
'Peeking at each other's homework'
As of late Tuesday afternoon, two union sources who requested anonymity because they weren't authorized to speak said there had been a lot of movement at the bargaining tables with proposals and counterproposals. Still, there remained a lot of work to do to reach a tentative agreement by the contract expiration at 11:59 p.m. Thursday.
By not picking a target company, that means a tentative agreement at one automaker would protect that company from a strike, but the other two could face walkouts. And if the union got a tentative agreement with one company, would it use the deal as a model for the other two?
A UAW member holds a sign that reads 'united for a strong contract' during a rally and practice picket in Detroit on Wednesday, Aug. 23, 2023.
“I don’t think we need to," according to one of the union people familiar with negotiations. "I think they’re talking to each other and peeking at each other’s homework."
For example, this person said, referring to negotiations about the automakers recognizing a federal holiday, "Once one gave Juneteenth, another gave Juneteenth and then the third did and that’s kept happening.”
Since the minute Fain won election in the union and took office earlier this year, he has bucked tradition. He skipped a formal handshake with the automakers' CEOs when negotiations officially started. And he has regularly held live updates for members and the public to reveal the companies' offers, something that was usually kept behind closed doors until there was a tentative agreement. He has even filed unfair labor charges with the National Labor Relations Board against GM and Stellantis, charges both sides say are baseless.
Fain opted to drop the traditional pattern bargaining because he's said it wasn't working for members.
Genius or madness?
Fain's practice of publicizing the negotiating demands on both sides encourages each automaker to wait for the other two to make offers, Masters said, noting that each company has a competitive interest in keeping its labor costs as low as possible especially as they funnel billions of dollars into transitioning to EVs.
So will a three-way negotiation be the wave of the future and might it benefit one or either side?
"It is an open question in my mind," Masters said. "Applying pressure on all three might be the best way to see which capitulates first with the best deal. Selecting a target and proceeding with the bargaining procedure of the past several decades is certainly more predictable than a simultaneous approach, but the union is trying to break a mold that it does not believe has served the membership well."
Brett Miller, a Detroit-based labor and employment attorney, said Fain's strategy is aimed at the union being able to maximize its leverage and put the most pressure possible on the automakers.
"If one automaker caves on a key economic issue it could cascade to the rest of the companies," Miller said. "On the other hand, this does allow the other automakers insight into the other negotiations, which could backfire as it may provide a bit of a unified front against the UAW. Time will tell whether the new strategy is reckless or genius. There are potentially billions of dollars in lost revenues for the companies and lost wages for the workers on the line."
Then again, the UAW could play all three automakers against each other and still pick one as the strike target, said Erik Gordon, a business professor and labor expert at the Ross School of Business at University of Michigan.
"The one that the union thinks is most likely to cave after the union has gotten all three to reveal several rounds of cards," Gordon said of a possible strike target. "This time around, it might not be obvious which company is the weakest and best target to set the pattern for all three companies."
The high stakes of getting a good deal
When asked for their views on the UAW's new negotiation process, Stellantis officials declined to comment and Ford did not provide a response.
GM spokesman David Barnas sent this statement in an email: "The GM and UAW bargaining teams have been meeting regularly, including this past weekend. We have been hyper-focused on negotiating directly and in good faith with the UAW and are making progress. Our goal remains the same — to achieve an agreement without a disruption that rewards our team members and protects the future of the entire GM team.”
The stakes are high for all parties to get a deal done by the deadline. For the automakers, they must make offers that appease the union workforce, but keep the company financially healthy to fund a shift to an all-electric future. A strike would be damaging, especially at GM and Ford, where there are plans to roll out several new electric vehicles this year and a need to keep factories running.
For the workforce, walking off the line and living on strike pay of $500 a week can get old fast and with 150,000 union members across the Detroit 3, taking them all out could quickly drain the union's $825 million strike fund.
But for Fain, the stakes are highest because he must get the strongest deal possible to keep his promise to his members and potentially recruit from nonunion plants such as electric vehicle makers Tesla and Rivian, as well as foreign carmakers, and at new battery plants being built across the nation.
"The UAW needs a good deal not only to sell to its own members, but also to show to nonunion workers the benefits they can expect from having a union," Masters said. "For the UAW to show these benefits, the contracts must have a clearly significant rise in base wages and compensation formulas in profit-sharing."
