While United Auto Workers members who were hired prior to the 2008 financial crisis have pensions, those brought on since have received 401 plans instead. The union is demanding the auto companies provide pensions for new employees and those who currently lack them.
Labor experts don’t see a return to a system of full-fledged pensions happening anytime soon, if ever, because of the massive cost associated with them. Even so, demanding pensions is a smart strategy, some say, because it reminds both sides how far behind auto workers have fallen since their heyday.
Now that the major Detroit auto companies are raking in record profits and CEO pay is soaring, striking workers say they deserve to get back the benefits they sacrificed to help the auto companies skirt financial collapse in the 2008 financial crisis. According to people familiar with the companies’ estimates, restoring pensions and granting the UAW’s other original demands — including a more than 40% wage increase, cost-of-living increases, a four-day work week and a boost to retiree benefits — would add more than $80 billion to each of the biggest US automakers’ labor costs. Ford Chief Executive Jim Farley said that proposal, which has since been revised downward slightly by the union, could bankrupt the company.