There’s no use pretending that organized labor can suspend the laws of economics.
I wrote earlier today about how the United Auto Workers union doesn’t really exist to represent autoworkers. Its biggest organizing successes in recent years have been in higher education, and there are now as many UAW members in the University of California system as there are at General Motors.
Nonetheless, it received a bunch of positive coverage from the press and fawning from politicians during its strike against Ford, GM, and Stellantis last year. You’d think it was a huge win for autoworkers. UAW president Shawn Fain was still getting hagiographical treatment from CBS News two weeks ago and was just named MotorTrend person of the year. But since the strike ended on October 30, 2023, automakers have been announcing layoffs. Some examples:
- November 4, 2023: Ford announced 1,600 layoffs at its plant in Louisville. The company said the layoffs were related to parts availability. The facility affected never went on strike.
- December 8, 2023: Stellantis announced layoffs at two Jeep plants in Detroit and Toledo. The company cited stricter emissions regulations in California and more than $3 billion in lost revenue during the UAW strike as the reasons for its decision.
- December 14, 2023: General Motors announced 1,300 layoffs at two plants in Michigan. The company cited delays in electric-vehicle production as the reason, and the layoffs were planned before the new collective-bargaining agreement was ratified. But after ratification, the company laid off 34 more workers than planned. “These workers, who do some jobs previously performed by workers under the national UAW-GM contract and tasks dedicated to electric-vehicle production, previously had their own contract and were paid less than traditional GM production workers,” the Detroit News reported. “They had received $18.50 to $22 per hour and were bumped up to full production wages in the new agreement, which top out at $35.88 per hour after the latest 11% pay hike.”
- January 14, 2024: Stellantis announced the elimination of 539 “supplemental employee” positions. Those positions were lower paid, and the UAW got the companies to raise their pay in the contract negotiations. Stellantis said those 539 workers were terminated immediately, will not have the chance to be reassigned elsewhere in the company, and will not receive supplemental unemployment benefits.
- January 19, 2024: Ford announced that 1,400 workers would be affected by changes in production at the Michigan plant where the electric F-150 is made. Responding to weak demand for the electric truck, the company said it moved workers from that plant elsewhere.
As you can see, some of the layoffs are related to the UAW’s actions, and others are not. The layoffs are consistent with global trends in the car industry. For example, Volkswagen is in the midst of an $11 billion cost-cutting program that will result in job losses. The cost-cutting at VW and elsewhere is in large part due to depressed demand for electric vehicles despite automakers’ efforts, usually with government support, to shift their production in that direction.
The UAW has cheered for that transition, and it has endorsed Joe Biden, who is leading that transition in the U.S., for reelection. At least 98 percent of its campaign contributions in every election cycle since 1990 have gone to Democrats, who have consistently been the party pushing electric vehicles in more recent years, both at the state and national levels.
And now, after the UAW’s big “win,” the layoffs are still coming, because at some point when you’re making products not enough people want to buy, money gets tight and cuts have to happen. There’s nothing Shawn Fain can do or say to change that fact, and there’s no use pretending that organized labor can suspend the laws of economics.