The 2020 presidential race gives UAW powerful bargaining chip in GM strike

Key Points
  • Top Democratic presidential hopefuls have strongly supported the UAW strike, while criticizing General Motors.
  • GM calls candidates' criticism about wages and benefits unfounded.
  • Gallup reports America's approval rating of unions has increased 16 percentage points from its 2009 low point.
United Auto Workers picket outside of General Motors' truck plant in Flint, Mich., on Sept. 16, 2019.
Michael Wayland / CNBC

DETROIT – The 2020 presidential race is becoming an unexpected tool for the United Auto Workers in its strike against General Motors.

While President Donald Trump has remained neutral in the 9-day-old work stoppage, top Democratic presidential hopefuls have vocally backed the UAW in an attempt to win over blue-collar voters, some of whom crossed their traditional political lines to support Trump in 2016.

The candidates have used the strike as a backdrop to their presidential runs, supporting the UAW and its workers while condemning GM for increasing production in Mexico and China as it idles plants in the U.S. The support brings additional public pressure on the automaker in the union's fight for a more lucrative deal for its members.

"It is good to be here with workers from the UAW who are here to hold GM accountable," Sen. Elizabeth Warren, D-Mass., told workers picketing outside GM's Detroit-Hamtramck plant Sunday. "GM made billions of dollars in profits last year and closed five plants. ... GM is demonstrating that it has no loyalty to the workers of America or to the people of America."

GM said the criticism about its wages and benefits was unfounded, according to an emailed statement to CNBC on Tuesday. "The total compensation of our UAW workforce — including wages, profit sharing and benefits — is the highest in the U.S. auto industry," it said.

GM in fact has distributed record profit-sharing checks to UAW members in recent years and members retain a golden health-care plan that has workers paying only 3% of their out-of-pocket costs. That compares with 28% for the average U.S. worker, according to the Henry J. Kaiser Family Foundation.

Biden, Warren join UAW picket line as strike against GM enters second week
Biden, Warren join UAW picket line as strike against GM enters second week

Union monitoring candidates

The UAW, which hasn't endorsed a presidential candidate yet, declined to comment on the support it's getting on the campaign trail or its potential impact on negotiations. The union historically endorses Democrats.

The union is closely monitoring the 2020 race to see which candidate is most involved with the strike effort, according to person familiar with negotiations. It's seen "as an audition to win union support for upcoming presidential primaries and general election," the person said, specifically citing concerns regarding health care and GM's decision to move employees to more expensive COBRA health plans during the strike.

Former Vice President Joe Biden took aim at GM and other companies during a visit Sunday to a GM assembly plant in Kansas, saying the union hasn't been fairly rewarded for helping to bring the automaker out of bankruptcy and back to profitability.

"I knew the reason why General Motors was in trouble wasn't because of the UAW; it was because of bad management decisions," Biden told workers. He added that once GM started doing well, it raised salaries for executives and bought back stock instead of rewarding the union.

Democratic hopefuls Sen. Amy Klobuchar of Minnesota and Beto O'Rourke of Texas have also visited striking GM workers in the past week. Sen. Bernie Sanders of Vermont is scheduled to visit UAW picketers on Wednesday at GM's Detroit-Hamtramck plant.

Public support

The election campaign and positive sentiment for the union have placed the UAW in a more favorable light than any national strike against the Big Three Detroit automakers in decades, according to industry experts. That's despite a federal investigation into union corruption that has reached the highest ranks of the UAW.

Gallup recently reported America's approval rating of unions has been steadily improving over the last decade.The polling firm found 64% of respondents approve of labor unions, surpassing 60% for the third consecutive year and up 16 percentage points from its 2009 low point.

"Higher public support for unions in the past few years likely reflects the relatively good economic conditions in place, particularly low unemployment," according to Gallup. It said the lowest union approval ratings it found was from 2009 through 2012.

The last time the union went on strike was 12 years ago when the auto industry — particularly Ford, GM and Fiat Chrysler — were beginning to tailspin. GM and then-Chrysler would end up in government-backed bankruptcies in 2009.

The union, at that time, went on strike in protest of concessions such as a two-tier wage system and elimination of traditional benefits for new hires. As some union members have described it, the strike was a planned political move that resulted in little to no changes.

United Auto Workers members on strike picket outside General Motors' Detroit-Hamtramck Assembly plant on Sept. 18, 2019 in Detroit.
Michael Wayland / CNBC

This time, the automakers remain highly profitable, and while they are bracing for a potential downturn in the market or recession, many economic indicators remain healthy.

"Public support appears to be with the union," said Art Wheaton, a labor expert with the Worker Institute at Cornell University. "The position the UAW has taken is something that's supported by a wide swath of people. That's why there are people walking the picket lines with them."

The union's narrative now is standing up for middle-class Americans who are fighting against a massive, multibillion corporation that's trying to squeeze its workers out of well-paying jobs to increase profits.

Wheaton said the political support and ripple-effect the strike is having on other companies, including auto suppliers, will "add more pressure to GM" to bring the strike to an end with a more lucrative tentative deal than one previously submitted to the union two weeks ago that led to the strike.

"It will add more pressure to GM to ask, 'How long are we willing to do this?'" he said.