Steven Rattner on the UAW Strike and the Challenges of Bidenomics

2009 Concessions

In 2009, the United Auto Workers (UAW) made significant concessions to help stabilize the auto industry during a financial crisis. Steven Rattner, who led the government's efforts, explains that these concessions were crucial for the $82 billion rescue package, which required shared sacrifices from all stakeholders, including labor, shareholders, and management 1. The concessions primarily affected new workers, who were hired at lower pay scales, while existing workers retained their compensation levels. Rattner notes that the negotiations were cordial, contrasting with today's more contentious atmosphere under UAW leader Sean Fain 2.

The UAW's attitude was that the existing workers should be protected and the new workers should, in effect, take a lot of the pain.

--- Steven Rattner

The 2009 concessions set the stage for current negotiations, where the UAW seeks to reverse past sacrifices and gain new benefits.

   

Current Demands

The UAW's current demands include significant pay increases and a reduction in work hours, which Steven Rattner argues are unrealistic given the auto industry's financial constraints. Despite healthy profits, automakers face thin margins and costly transitions to electric vehicles, limiting their ability to meet all union demands 3. Rattner suggests that a reasonable resolution might involve a compromise on cash compensation, with the union dropping some of its more ambitious demands 4.

There's no possibility the companies can possibly accept paying people 40 hours and working 32 or anything like that.

--- Steven Rattner

The gap between the union's aspirations and the companies' capabilities highlights the challenges in reaching an agreement.

   

Labor Dynamics

Today's labor dynamics differ significantly from 2009, with a stronger economy potentially empowering workers. Steven Rattner notes that the UAW's strategic strike, targeting one plant per company, aims to conserve resources while maximizing impact 5. The economic backdrop, with its shift in power balance, makes this an opportune moment for the UAW to push for changes 6.

The macro backdrop couldn't be more different from the time when Steven was the car czar.

--- Joe Weisenthal

However, the ripple effects of the strike could lead to widespread layoffs and financial pressures on parts suppliers, complicating the path to resolution.