UAW workers in MIchigan (Bill Pugliano/Getty Images)

September 26, 2023   3 mins

When Joe Biden announced his intention to join a United Auto Workers’ picket line in Michigan, his breathless supporters lionised the “historic” and “unprecedented” decision. Amid the praise, there was little mention of the fact that Biden is only visiting the Wolverine State today because Donald Trump had already pledged to visit workers there tomorrow. Nor was there much interest in the political machinations threatening to topple the industry’s bargaining tables.

In the week and a half since the strike against the Detroit Three automakers — General Motors, Ford and Stellantis — was called, the UAW has rolled out a number of unprecedented tactics, from hitting all three manufacturers at once to openly sharing term proposals from negotiations with members and the public. As clever as these manoeuvres may seem, however, and whatever increase in compensation the union ends up winning, the result will be a pyrrhic victory at best. Already, human labour is becoming less and less relevant to the production needs of all automakers, and the “Big Three” in particular are losing their market share. The record wage-and-benefits boosts UAW President Shawn Fain is seeking will only accelerate these trends.

In one way, at least, Fain has the automakers over a barrel: UAW workers’ counterparts in thousands of US factories have been getting significant wage increases lately, with even some blue-collar service jobs approaching the kind of sumptuous hourly compensation that manufacturing jobs singularly used to provide. And yet, one might also wonder why Fain is trying to drive such a hard bargain with negotiators who had already agreed to deliver record-breaking compensation increases to their unionised workers. The typical auto worker, after all, already enjoys some major financial cushions that add up, on a percentage basis at least, to the kind of perks enjoyed by industry executives. These include annual profit-sharing payouts that typically have amounted to $8,000-$12,000 or more per worker since the Great Recession, as well as “ratification bonuses” of several thousand dollars for simply agreeing to vote in favour of the union’s new contract with an automaker.

In light of this, what does the union really hope to achieve? The answer, many suspect, lies in its attempts to indemnify remaining members against the inevitable further dwindling of UAW jobs, just as the UAW have been doing for decades. The unions know fully well that the dawning era of electronic-vehicle production requires about 70% of the labour required to make traditional internal-combustion vehicles, mostly because of the absence of heavy and complicated engine and transmission systems. Faced with the paring of thousands of jobs, the hope is that remaining workers are going to continue to be compensated at the top of the US industrial scale.

Yet while that is the aim, various political machinations make the reality far murkier. Internally, for instance, Fain barely won his election last spring after running as an outsider candidate against a UAW establishment that festered in corruption, landing its past two presidents in prison. As a result, Fain’s aggressive rhetoric towards the automakers in part reflects his need to conjure up a sufficiently plump settlement that will demonstrate his leadership bona fides as a wet-behind-the-ears outsider.

As for Biden, the rationale behind his trip extends far beyond denying Trump an exclusive photo-op. The nearly $800-billion auto industry accounts for about 3% of overall US economic output, which is still concentrated in the Upper Midwest and battleground states such as Michigan and Ohio. A UAW strike that cripples the Detroit Three and leads to massive layoffs and even temporary economic contraction wouldn’t be the kind of “Bidenomics” that would benefit the president’s re-election bid.

And even if this doesn’t happen, Biden’s fleeting trip will hardly paper over the fact that his administration is forcing the automakers that employ UAW workers to plunge into vehicle electrification and battery systems far more quickly than they would like to — and using its new industrial policy to push heavily incentivised EV nameplates into the marketplace at a much faster pace than American consumers are demanding them. In other words, the Biden that will visit Michigan today to demonstrate “solidarity” with the UAW strikers is the very same Biden who is using US taxpayer funds to undercut their future in a very severe way.

At the same time, while considered a “purple” state not long ago, Michigan has for the moment turned decidedly blue. Democrats led by Governor Gretchen Whitmer took advantage of a pro-abortion constitutional referendum on last autumn’s ballot to notch not only Michigan’s new status as a major interstate abortion provider but also to sweep Democrats to control of both houses of the bicameral legislature along with the governorship for the first time in 40 years. It is an open secret that Whitmer is styling herself as a potential presidential candidate should Biden for some reason withdraw.

Meanwhile, Michigan Republicans are in disarray as Christian conservatives and Trumpians have tightened control over a GOP that now values ideological purity over the coalition-making that might make their candidates competitive in 2024 after narrowly losing the state in 2020. Trump’s own visit, then, may end up being less effective in winning Michigan in 2024 — and more about playing nationally to a blue-collar demographic that Biden’s party, despite its staunch pro-union proclivities, has essentially abandoned.

Dale Buss is an award-winning financial journalist based in Michigan.