UAW Strike is a Result of the Biden Administration’s Catering to Unions

This was originally published in the Dallas Morning News

The United Auto Workers strikes of General Motors, Stellantis, and Ford may bring back unpleasant memories of the 1970s. A similar strike then — and subsequent concessions from the car manufacturers — helped set the stage for the collapse of the American auto industry and economy.

Hampered by high costs and inflexible work rules, the automakers were ill-prepared to meet the onslaught of international competition they faced when Toyota and Honda delivered less expensive cars that were more reliable and achieved better gas mileage.

Perhaps the UAW has not noticed, but their employers still face keen competition, with cars from Japan, South Korea, Germany and other countries flooding the U.S. market. The incipient threats today are Tesla and the other startup manufacturers of EVs, which use nonunion labor and operate factories that are much more mechanized than the production line for a gas-operated car.

However, the boldness of the UAW’s demands may stem not from ignorance but from the Biden administration’s undermining years of economic and regulatory progress that reduced unions’ stranglehold over certain sectors of the U.S. economy. Given that the strike has expanded into parts centers in Roanoke, Carrollton and this week in Arlington’s GM plant, this should be of concern to Texans who are worried about the state’s and nation’s economic health.

On his first day in office, Biden issued an executive order requiring federal contractors to pay all employees a minimum of $15 an hour. While the order made it more difficult for smaller firms with unskilled labor to get competitive contracts, it created jobs for union workers.

The Biden administration also funneled billions of taxpayer dollars toward unions through the Infrastructure Investment and Jobs Act and Inflation Reduction Act. In both cases, subsidies to businesses are conditioned on paying higher wages and implementing certain work practices that favor union workers.

In August, the Department of Labor published a final rule updating the Davis-Bacon Act prevailing wage standards, which requires that firms receiving federal funds pay what are often union wages to all workers hired. These requirements can also extend in practice to companies doing business with state and local governments. Without the ability to hire lower-paid workers, many of these companies turn to unions for their workers.

Most recently, the National Labor Relations Board has sought to eliminate the secret ballot in union organizing elections. The NLRB has put the burden on companies to request a secret ballot. And even if employers succeed in this, the NLRB is quite willing to throw out the election results if a company has committed what it deems as “unfair” labor practice ahead of an election.

It is in this context that the UAW has been emboldened to make demands similar to those that hobbled the automakers in the 1970s.

Its demands would roll back the concessions the union made years ago that have allowed the automakers to survive, such as the costly defined benefit pension plans and ruinous health insurance programs that helped push Chrysler and GM into bankruptcy. They are also demanding an end to the lower tier of wages and benefits for new workers and a resumption of cost-of-living adjustments, which exacerbates inflation. On top of these, the UAW is demanding an immediate 20% pay raise and a 40% hike over the next four years.

But the most potentially damaging demand is the re-implementation of job guarantees for all members. One thing that has allowed automakers to keep making profits is the ability to move jobs from high-cost union states to Texas and other lower-cost nonunion states. This includes not just building the cars but also the production and distribution of parts.

Mark Stewart, chief operating officer of Stellantis, told reporters that “in a lot of cases, it didn’t make sense to make those investments in the location that [the parts and distribution centers] are in.” Moving locations is the last thing the UAW wants, so it is pushing not only for job security but job security in the location where current jobs exist. This could harm job growth in Texas’ burgeoning auto industry.

The UAW is making demands that will harm the economy, employers and workers. The only reason they are in a position to do this is because the Biden administration is trying to turn back the clock to what they clearly see as halcyon days where unions can use the power of the federal government in their negotiations.

If the current version of the “Big Three” caves to union demands, this will be the reason. And it will also be the reason that we see a once robust sector of the American economy decline and pull the Texas and U.S. economies down with it.