President Joe Biden is trying to walk a fine line as the clock ticks toward a looming deadline for a possible UAW strike of the Big Three automakers, keeping in direct touch with the key players engaged in the negotiations.
The situation has proved tricky for the president – he has called himself the most pro-union president in history, but a strike would also harm the economy that he constantly points to as a success while he makes his case for reelection. Anderson Economic Group estimates that a strike against all three companies would be a $5 billion hit to the economy after just 10 days.
Jared Bernstein, chair of the White House Council of Economic Advisers, stopped short of telling reporters on Wednesday that the president would support a strike, instead emphasizing that Biden wants a fair deal for autoworkers.
“I’m going to leave it at he believes the autoworkers deserve a contract that sustains middle class jobs and he wants the parties to stay at the table to work round the clock to get a win-win agreement,” Bernstein said. “And he’s encouraged the parties to do that, he’s explicitly encouraged them to do so.”
Biden spoke with UAW president Shawn Fain on Labor Day, a White House official tells CNN, and also spoke with the leaders of the Big Three – GM, Ford, Stellantis – last week ahead of his trip to Asia.
Negotiators remain far apart in the final hours before the deadline. The union is demanding job protections among its ambitious slate of bargaining goals. It says it is ready to have its 145,000 members at the three companies go on strike as early as Friday if it can’t reach a deal with the companies, and a strike could have widespread economic consequences.
Negotiations have proven “uniquely challenging” because of a new approach by UAW leadership, according to three sources briefed regularly on the discussions, who requested anonymity to describe sensitive conversations during ongoing negotiations.
Unlike past negotiations, UAW has not selected a single automaker with which to seek an initial deal that would be replicated with the others. In 2019, for instance, UAW prioritized reaching a deal with General Motors, whose workers struck for 40 days before the parties reached a deal that ended a two-tier wage structure for workers of varying tenure. Deals with Ford and Fiat Chrysler (now Stellantis) soon followed.
“Because it’s still open with all three companies and all issues are still outstanding, it’s complicated in a way prior negotiations haven’t been,” one of these sources told CNN.
Some signs of progress have emerged: A recent offer by Ford proposed a 20% wage increase over roughly four years, representing nearly double its initial offer of 9% over the same period.
But a large gap still remains between the companies’ most recent offers, and the expectations set by Fain and UAW members. The odds of the targeted strike – even for a limited amount of time – appear to be rising, despite the publicly optimistic proclamations of the Biden administration.
Asked by CNN’s Poppy Harlow whether Biden still believed the parties could avoid a strike, Deputy Treasury Secretary Wally Adeyemo said this week, “Yes, that’s where the president is.”
Fain said in a Facebook Live event on Wednesday that he had identified a targeted strike plan that would see work stoppage at select locations if no deal was reached in the next day.
Fain visited the White House in July to discuss his negotiating strategy with Biden administration officials including NEC Director Lael Brainard, counselor to the president Steve Ricchetti, deputy chief of staff Jennifer O’Malley Dillon, and senior adviser Gene Sperling, who has been appointed the president’s go-between in the talks. After the Roosevelt Room meeting, Biden requested a meeting with Fain, who had been sworn in for a matter of months and was only beginning to build relationships with potential political allies, remaining something of an “unknown quantity” going into battle.
“That’s been one of the things that’s been uniquely challenging about this,” one source told CNN, acknowledging there’s not a clear enough read on Fain’s leadership and negotiating style to discern what is bluster and what is strategy.
The Labor Day Fain call, which was first reported by the Wall Street Journal, came after CNN asked the president about the strike earlier in the day ahead of planned remarks to union workers in Philadelphia.
“No, I’m not worried about a strike until it happens,” Biden said when asked if he was worried about the possibility. “I don’t think it’s going to happen.”
Asked about those comments last Monday, Fain told CNN affiliate WXYZ that he was “shocked” by Biden’s reaction.
“I appreciate the president’s optimism and I also hope that the Big Three will come to their senses and start bargaining in good faith, but we are ready to do what is necessary come September 15 if they don’t,” Fain later told CNN.
The official described the Labor Day call between Biden and Fain as “productive.”
And Biden encouraged the auto executives, the official said, “to provide more forward-leaning offers and stay at the table.” Talks have yet to yield a resolution. Biden was frequently briefed on the ongoing talks during his trip to India and Vietnam.
Acting Labor Secretary Julie Su and Sperling, who was tapped to lead the White House’s response, have also been engaged during the negotiations. Still, the Biden administration is limited in what it can do.
The president doesn’t have the legal authority he would have if a freight railroad or airline was threatening to strike. In those cases, a different labor law gives the president the authority to order both sides to continue on the job. So the best he can do is apply public pressure.
And despite Biden’s reputation as a pro-union president, his influence with the UAW union is fairly limited, especially considering its criticism of the administration’s support of a move away from gas-powered cars to electric vehicles, which the union sees as bad for the jobs of many of its members.
The administration lacks the legal or legislative authority to act as a participant in the negotiations but has held conversations with UAW about broader policy changes that would be seen as favorable, even as the union slams the administration’s support of a transition to electric vehicle manufacturing as detrimental to their industry.
One example has been repeatedly cited as a source of optimism for UAW workers – and potential cornerstone for an endorsement for Biden in 2024.
The Department of Energy recently published guidelines for the distribution of $15 billion that elevates sites for consideration that have collective bargaining agreements and pledge to retain high-paying union jobs. That prioritization of retaining union jobs, praised by the UAW, was seen as moving rank and file union members toward support of Biden, according to people briefed on the situation.
But for now, the president’s focus is on encouraging the parties to continue negotiating to resolve the myriad issues outstanding in a shrinking window of time. And if they can’t, the White House would turn its focus on how to blunt the economic impact, which is not seen as life-threatening or critical in the way that a potential rail strike would have been in 2022. The impact would be expected to be limited to consumer prices, which have started rising after months of stability. The Bureau of Labor Statistics said Wednesday the price of new vehicles rose 0.3% in September, and 2.9% over the last year.
This story has been updated with additional reporting.