Biden sending aides to Detroit to address autoworkers strike, says 'record profits' should be shared

President Joe Biden speaks about the auto workers strike from the Roosevelt Room of the White House in Washington, Friday, Sept. 15, 2023. (AP Photo/Susan Walsh)

WASHINGTON (AP) — President Joe Biden on Friday dispatched two of his top aides to Detroit to help resolve the strike by unionized autoworkers, expressing sympathy for the union by suggesting that the Big 3 automakers should share their “record profits.”

“No one wants to strike,” Biden said in brief remarks at the White House. “But I respect workers’ right to use their options under the collective bargaining system, and I understand the workers’ frustration.”

The United Auto Workers announced a targeted strike of 13,000 workers at three factories after failing to reach a contract with General Motors, Ford and Stellantis. Biden said he is sending acting Labor Secretary Julie Su and senior aide Gene Sperling to Detroit to help reach a “win-win” contract for the companies and their employees.

Biden said that when negotiations began, he encouraged leaders of the two sides to stay at the bargaining table as long as possible. Just a fraction of the UAW’s 146,000 members employed by the Big 3 are striking. The UAW is seeking 36% wage increases over four years. GM and Ford have proposed 20%, while Stellantis, formerly Fiat Chrysler, has put forward 17.5%

“The companies have made some significant offers,” Biden said. “But I believe they should go further to ensure record corporate profits mean record contracts for the UAW.”

The strike began just as Biden is branding the U.S. economy as his own. Going into the 2024 presidential election, the White House has said its policies will help blue collar workers, bolster the middle class and create factory jobs by shifting away from fossil fuels to address climate change. But there are also uncertainties about these changes as automakers gear up to produce electric vehicles and the UAW is the most prominent union to not endorse Biden’s reelection effort.

High inflation going back to 2021 has created an economic and political headache for Biden. Workers’ paychecks have not kept up with the cumulative increases in the cost of groceries, gasoline and other goods. Data from the Labor Department shows that new car prices have jumped nearly 20% since April 2021, while higher interest rates have made auto loans more expensive.

The Democratic president said he is backing the union’s efforts on wage increases because the contracts can set standards across the wider economy, “pushing up wages and strengthening benefits for everyone.”

But Biden also described talks as having broken down, a characterization that UAW president Shawn Fain disputed. The head of the UAW said the union’s negotiators “are hard at work at the bargaining table.”

The UAW strike is just one of many labor disruptions. Screen actors and writers are also on strike, shutting down Hollywood production. Business leaders blamed Biden for encouraging the more aggressive union tactics from the White House by repeatedly voicing support for a constituency that he believes is part of his own identity and a key constituency in next year’s elections.

“The UAW strike and indeed the ‘summer of strikes’ is the natural result of the Biden administration’s ‘whole of government’ approach to promoting unionization at all costs,” said Suzanne Clark, CEO of the U.S. Chamber of Commerce.

Joshua Bolten, head of the Business Roundtable, an association of CEOs, said: “With American families facing challenges from persistent inflation and a slowing economy, this strike will only make matters worse.”

Fain, the UAW president, said that the union’s strike would not hurt the economy, but “the truth is we are going to wreck the billionaire economy.”

“Working people are not afraid,” he said. “You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”

There are other possible strikes coming, including 60,000 health care workers in California, Oregon and Washington, said Joe Brusuelas, chief economist at the consultancy RSM. But the work stoppage at three auto plants, he said, “represents barely a ripple in the national economy” as of now.

Still, a wider strike by the UAW could cause parts of the U.S. economy to shudder.

The consultancy Oxford Economics estimated that a total strike by unionized workers at the Big 3 would cause motor vehicle production to drop 30% or more. The chain reaction across parts suppliers to the stores and restaurants that auto workers patronize could hurt local economies in Michigan, Wisconsin and other states that could be pivotal in next year’s election.

The political spillover was beginning before a strike was formally announced.

Former President Donald Trump, the early Republican front-runner, said that union workers jobs are at risk because of Biden’s push to use of government incentives to build more EVs. Trump said in a recent interview with NBC News that consumers should still be able to buy gasoline-powered autos and that any EVs will ultimately be manufactured in China, despite a wave of factory investments in the United States spurred by Biden’s policies.

“The auto workers are being sold down the river by their leadership, and their leadership should endorse Trump,” said Trump, adding that the workers are “not going to have a union in three years from now. Those jobs are all going to be gone, because all of those electric cars are going to be made in China.”

Biden, by contrast, sees the talks as critical for producing a contract that “leads to a ‘Made in America’ future that promotes good, strong middle class jobs.”