Navigating Unrest: The UAW Standoff with Auto Titans and the Crucial Buffer of Temporary Staffing

The United Auto Workers (UAW) and The Big Three auto manufacturers, General Motors (GM), Ford Motor (Ford), and Stellantis, the maker of Chrysler, Dodge, and Jeep, locked horns in an epic 40-day work stoppage that caused $10.4 billion in economic losses.

How Did The UAW Get To This Point

On one side of the strike was an aggressive new union president, Shawn Fain. Fain took a hard stance on behalf of auto workers and showed no restraint as he registered his opinions to the press. According to Reuters, Fain said, “We’re done taking their crap and the scraps they want to feed us.” The Washington Post quoted Fain as saying, “The only way the working class advances is if we stand together … the only way we’re ever going to have a better quality of life for ourselves and our families is if we fight for it.”

Fain rallied 97 percent of the UAW members to strike because automakers could not agree to cost-of-living adjustments, an end to wage tiers, restoration of pensions for new hires, and other demands. According to CBS News, through Oct. 26, the end of the sixth full week of the strike, the losses amounted to:

• Wages of OEM Workers – $650 million.
• Losses to the Detroit 3 Manufacturers – $4.3 billion.
• Lost Wages and Earnings to Supplier Companies and Workers – $3.3 billion
• Loses to Dealers, Customers, and Ancillary Auto Industry Workers – $2.0 billion

The Losses Are Growing

From the 1970s through the beginning of 2000, the U.S. employed almost three times as many auto workers. According to Michigan Advance, in 1970, The Big Three automaker’s combined employment was 408,000 workers. Today, only 146,000 people work for those companies – 57,000 at Ford, 46,000 at GM, and 43,000 at Stellantis.

Although the numbers are significantly diminished, 146,000 striking workers will severely impact the automotive industry. Alliance for Automotive Innovations underscores this statement: “Automotive ecosystem drives $1 trillion into the U.S. economy yearly—nearly 5 percent of GDP.” The Alliance further elaborates on the juggernaut nature of the auto industry by saying it produces “$105 billion in exports” and “every $1 spent in vehicle manufacturing creates an additional $3.45 in economic value.”

Precedent Has Been Set; Strikes Impact Us All

Prolonged strikes significantly impact the U.S. economy. In 1959, United Steelworkers of America (USWA) went on strike for 116 days. The University of Chicago Press Journals writes, “More than half a million workers nationwide shut down the massive basic steel industry. Regarding person-hours idled, it was, and would remain, the most significant work stoppage in U.S. history.”

In July 2014, the labor contract between the International Longshore and Warehouse Union (ILWU) and its employer group, the Pacific Maritime Association (PMA), expired. The economic impact of the strike caused export loss, higher costs, and reduced consumer purchasing power. The National Association of Manufacturers (NAM) estimated that “an import disruption during this same 20-day period would cost the economy $8.3 billion in 2014 and an additional $2.0 billion in 2015.” A deal was ultimately reached in 2015 after then-Labor Secretary Perez helped broker an agreement. Contrastingly, during the 40-day strike in 2019, “GM lost $3.6 billion.” A precedent has been set that these strikes can potentially disrupt more than what’s at stake for each negotiating party.

Temporary Workers; Changing The Narrative

Staffing agencies are neutral and face a unique challenge when supplying temporary help during strikes because the public perspective is often negative. Many view their business as doing a disservice to the cause. When, in fact, this narrative is far from the truth.

As outlined above, there is more at stake during a significant and prolonged strike than current working conditions and pay. Significant strikes have an impact that trickles down into many other areas of our economy, such as supply chains and exports. Using temporary workers to keep a minimum workflow in motion can help lessen a strike’s extended, adverse economic effects. In addition, temporary workers allow each negotiating party more time at the bargaining table.

Unions and the general public need to understand that temporary workers are indeed—temporary. Staffing agencies are not in the business of job replacement; they provide a short-term option. No strike lasts forever; when it’s over, the temporary workers depart, and union workers resume their jobs. Staffing agencies also provide a valuable resource for:

• Contingency Planning – Companies need to ensure continuity of operations, especially in sectors where interruptions can lead to significant revenue loss or public safety concerns. Staffing agencies analyze current processes, document the physical attributes of a company, and identify primary goals to develop a customized plan.
• Security Services – During a strike, protecting everyone involved, including employees on the picket line, is paramount. Staffing agencies use a hands-off approach to conflict resolution and non-confrontational methods to help create a safe and secure environment to prevent animosity and conflict.
• Skilled and Unskilled Workers – It takes expertise to keep a company running. Staffing agencies offer skilled and unskilled temporary workers to help maintain production levels and avoid delays or disruptions.

Conclusion

Staffing agencies are agnostic. The public perception often mischaracterizes them as disruptive forces during strikes, but in reality, they play a pivotal role in helping to ensure economic stability and business continuity. History has shown that prolonged and extensive strikes impact more than union members and industries—they can alter economic conditions, affecting household budgets.

A staffing agency’s intervention is not about negating the efforts or undermining the rights of striking workers; instead, it’s about mitigating broader economic repercussions and ensuring overall safety. Staffing agencies provide a balanced ecosystem during tumultuous times by offering temporary workers.

All stakeholders must recognize staffing agencies’ nuanced roles and short-term contributions as helping organizations and employees reach their long-term goals. Understanding and appreciating this distinction will inevitably lead to a changed narrative that realizes the staffing agency gives the striking party more time to negotiate toward an agreeable resolution.

Authors

Trevor Fandale

Trevor Fandale is the President of Huffmaster. He joined the company in 2016 as Vice President of Finance, bringing a strong financial analysis and strategic planning background. Trevor has provided executive assistance to develop short and long-term company goals, plans, and development strategies. Trevor's expertise and vision have been invaluable to the company’s success.