How would the UAW (United Auto Workers) benefit from increased demand for GM and Chrysler vehicles?

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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I think that one distinct way in which the United Auto Workers (UAW) benefit from increased demand for GM and Chrysler vehicles is that it increases the need for workers.  When there is an increase in demand, there is also an increase in production.  With increased production, factory work increases. This means more workers are needed.  At the same time, increased production can also mean that longer hours and thus more money can be generated for workers.  The United Auto Workers benefit from this because they are able to guarantee work for their membership.  They also benefit from increased production because it represents a good sign for business and sustaining economic viability.  The United Auto Workers would be able to negotiate more compensation for their workers because management is experiencing an uptick in production.  If the converse were the case, such as plant closures and decreases in economic growth, the United Auto Workers would not benefit.  When plants close, jobs go away and the union loses leverage and power.  Economic growth in the form of increased demand and production becomes essential for the union because it can make the case that skilled union workers are essential to continue this trajectory.

This was the case when the Ford Motor Company increased production.  When Ford increased production, union workers benefitted from the increase in demand:

Ford Motor Co. is adding 1,550 hourly employees in the first quarter to increase production of the aluminum-bodied F-150 pickup, the company announced today.

The hires will cause between 300 and 500 UAW members earning Tier 2 hourly wages of $19.28 today to rise to top-tier status with hourly wages of $28.50, said Bill Dirksen, Ford vice president of labor affairs.

In this instance, the increase in wages is only possible because of the increase in production that was brought about by an increase in demand. This is an example of how the UAW benefits from increases in demand.  When demand increases, production increases, and when these two elements are seen, UAW workers see benefits.

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