The Big Three's Labor Shortages

[Celerity]

The only way the UAW’s strategy of rejecting voluntary overtime can work is if Ford, GM, and Stellantis lack enough workers to make cars.

https://prospect.org/labor/2023-09-20-big-threes-labor-shortages-uaw/



We’re five days into the United Auto Workers strike of Ford, GM, and Stellantis, and two days from a second round. UAW president Shawn Fain has announced that workers at more plants will “stand up” and walk out if substantial progress is not made in negotiations by noon on Friday. But workers who are still on the job have found their own way to put pressure on the Big Three, by exploiting their long-standing worker shortages. Labor Notes reports on autoworkers’ strategy of “Eight and Skate,” which means working their shifts and then refusing voluntary overtime, which is routinely offered by the Big Three. Working your shift and then leaving work (in other words, doing exactly what it is you were hired to do) shouldn’t really be debilitating to the employer. In this case, it is.

The reason is understaffing: There are simply not enough workers at many auto plants to meet production goals. As a result, the companies turn to existing workers, paying them time and a half, or even double and triple time, to stay on the job. Management at some facilities consistently asks workers to work through their breaks or even lunch. By only working eight hours a day, then, autoworkers can reduce output at the plants. It comes at a cost to these employees, but it’s their way to contribute to the labor effort. And it’s been successful in shutting down some plants over the past weekend, when they would normally be open.

The auto companies could counter by making overtime mandatory, though workers would have to be notified well in advance. But the other thing the companies could do—what they could have done for years, more precisely—is simply hire more autoworkers. If your company is relying on overtime work, the problem is a lack of staff. This is not a new issue bound up with the labor shortages post-pandemic; it’s been this way for many years. As UAW leadership has explained, these companies have enjoyed record profits in recent years and ramped up pay packages to top executives. For which reason, they should have no problem increasing staff levels, or increasing pay to their workers. The companies have cried poverty, but if they are paying double-time rates for extra hours because demand is so high, it’s hard to square that claim. It would be far cheaper to pay a new employee at the base hourly rate than to pay an established worker for an hour of overtime.



So why don’t the companies want to hire more staff? Simply put, the benefits workers get on health care and retirement and paid time off add costs to the business. This is partially a function of the United States being the only major industrialized nation to not provide health care for workers. When employers bear that burden, they want to minimize the expense. But at some point, so much overtime is being paid out that the company isn’t avoiding costs at all. The heavy use of overtime work also calls into question the idea that the switch to electric vehicles will wipe out the automotive labor market. Under this theory, because EVs have fewer parts, fewer workers will be needed to produce and assemble them—about 30 percent fewer by one account. And if having fewer car parts leads to less wearing out of those parts, auto mechanics could go out of business; and if people mostly charge at home, gas stations could gradually close up shop.

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[MichMan]

1. I have an issue with the entire premise that overtime in auto assembly is due to lack of workers

Last edited Wed Sep 20, 2023, 08:29 PM - Edit history (1)

I worked in a Ford plant many years ago for a year, and later visited many assembly lines in a support role for a suppler. I find them quite fascinating. I wonder if the author had ever worked in one ?

The constraint is that the speed of the assembly line is capable of producing X number of cars per hour. Adding more people by itself doesn't change that. Let's assume that an assembly plant produces one vehicle every 90 seconds. Every 8 hour shift therefore produces 320 vehicles in one day, or 1600 in a 5 day, 40 hour week.

The number of shifts can be one, two or three depending on sales. Assembly plants are very expensive to build and operate, the capital investments in tooling and equipment need to run as much as possible, so nearly every plant is intended to run at least two shifts per day. In the example I listed, a two shift 5 day a week operation will produce 3200 vehicles per week. Adding more workers on each shift will not make the line churn out vehicles any faster.

Despite all those tasked with trying to estimate sales volumes of any specific vehicle. the public is fickle and buys what they want, when they want. So, what do you do if you are General Motors and sales of a popular model are 3600 units per week instead of the 3000 that were forecast? Not enough additional sales to make it financially feasible to open a new plant or add an entire extra shift.

Here are some possible solutions. What one would you choose if you were in charge? I've already explained that just adding more people won't increase the line output by itself.

a) Add a third shift. That's fine if you need an entire full week's worth of production every week, but what if you don't? Do you staff it part time, one or two days a week ? Not very feasible to try and find employees that would be interested in that arrangement, training them would be challenging, and they still expect full benefits. Lay off a fully staffed third shift every third week?

Would the UAW be happy with that arrangement ? Doubt it.

b) Add people that only work part time on Saturdays or Sundays? Same issues as the scenario above.

c) Open another assembly plant that only needs to run a couple shifts a week making the same product? How would that work; run full every other week and lay everyone off in between? That would take a lot of capital investments in duplicate tooling and equipment.

d) Redo the entire assembly line by adding more stations, with more employees doing less, to increase the line speed. Plant would go down for several weeks for modifications and it will use up more real estate. The product that wasn't made will have to be made up somehow. Some tasks take a specific amount of time to do regardless. If it takes 90 seconds to install a gas tank, it takes 90 seconds.

What if that model becomes less popular with the fickle buying public because gas prices went up (or down)? Now you have more capacity than you need.

e) Utilize the current work force on Saturday's or 10 hours a day if two shifts. Bingo!


Now, one of the current demands by the UAW is a 32 hour 4 day work week with 40 hours of pay. That would likely mean every plant would lose 20% of production and be shut down completely 3 days per week. Do you hire a part time crew to come in and work that 5th day, or accept the 20% loss in production? This seems like a total non starter IMO

[NowISeetheLight]

2. Robots

I guess I'd worry that more robots will be created to take over more if the production process.