Automakers And UAW Labor Dispute Ends, But Likely Only Temporarily

The UAW announced the six-week labor conflict between the Big Three automotive manufacturers is officially over via a notice on their website on November 20, 2023.

The agreement was met with great sighs of relief, but only after the disruptive, power-based moves from both parties led to an estimated $10.4 billion in economic net losses. Stakeholders on both sides should have no illusions that this labor contract will bring long-term peace between the UAW and automakers.

Why? The UAW and automakers have a predictable pattern of labor disputes that sets the precedent that adversarial tit-for-tat behaviors are not only acceptable, but expected. If history has a way of repeating itself, the parties will be back at it in 2028 when their contract expires.

But does it have to? As an academic studying the art, science and practice of highly collaborative business relationships, I would suggest the UAW and automakers could escape the cycle, but only if both parties choose to put the past behind them and seek a more collaborative and trust-based approach to their negotiations.

A History Of Distrust

The UAW and automakers have a deep-rooted pattern of management-labor disputes dating as far back as 1913. The Carriage and Wagon Workers Union launched initiatives to include production workers – not just skilled workers – in their fight for labor rights, rivaling the American Federation of Labor (AFL) long before the first motorized automobiles were accessible to the broader population.

As cars became more mainstream, major production sites, such as Detroit, were in upheaval. In 1932, an incident where Ford laid off 80% of its workforce without unemployment benefits sparked a hunger march comprising 3,000 participants on March 7, 1932.

Police attempts to disperse them resulted in four deaths, prompting another march of 60,000 participants only five days later. Pinching needs paved the way for the rise of the UAW from its predecessor union and was formally founded following a convention in 1935.

Fast forward to the Flint Sit-Down Strike in 1948, the 10-week International Harvester strike in the 1950s, solidarity efforts with the civil rights movement, navigating the gas-price spikes effect on auto industry workers in the 1970s and many incidents beyond that peppering society’s timeline, and it’s easy to see disagreements have always been present.

The last major dispute? In 2019, 46,000 UAW members campaigned a strike against GM for over a month, resulting in a four-year contract that expired — serendipitously — in 2023. With each contract negotiation and ensuring labor disputes, the parties simply up the ante and set the precedent that their adversarial tit-for-tat behaviors are not only acceptable, but expected.

A Broken Negotiation Process

The UAW-Automaker strikes are a classic example of how typical, old-school, power-based approaches fuel a virtual circle of distrust. Take, for example, UAW President Shawn Fain’s livestream video to UAW members on October 6 – three weeks into the strike. In the video, Fain stresses “winning” and using “power” ten times each and uses adversarial phrases such as “fight like hell,” “stand up,” “hammer” and “threat.”

If you were a company with the size and power of the Big Three automakers, would you simply back down as the UAW flexes its muscles? The typical answer is “no”, because the automakers’ leadership would appear weak if they did not stand up to Fain and the union members.

And if you were the UAW with nearly 50,000 members, would you bow down to the automakers’ management when they use their negotiation power to cut back on benefits like they did during the Great Recession? Once again, the typical answer is “no,” because the UAW leaders would also appear weak.

The result is a pattern of adversarial, tit-for-tat behaviors that lead to an escalating duel each time a contract expires. There is also a scientific reason why the parties find themselves in an escalating dual — it’s called “game theory.”

University of Michigan professor Robert Axelrod’s book “The Evolution of Cooperation” helped put the concept of game theory on the map with his pioneering study of the prisoner’s dilemma, delving deeply into the economic impact of choosing collaboration versus power-based approaches.

So, what happens when parties choose to be adversarial and use their power? Axelrod describes this as “tit-for-tat” behavior. Simply put, if you are adversarial, expect your counterpart to be adversarial, too.

Axelrod’s advice?

The best tactics for “winning” are: 1) Always return cooperation for cooperation. 2) Be fair with your partner. 3) Don’t try to be tricky and game the system for your own benefit. The lessons are simple, but profound: Playing a game cooperatively to achieve a mutual goal is always better than playing it with self-interest in mind.

Now that the UAW and automakers are past their painful and protracted contract negotiations, they should do some soul-searching on what got them to this point, not only for this round, but in all the previous episodes when they battled at the negotiation table, as well.

The Solution: Negotiate How To Negotiate

At a most fundamental level, neither side trusts the other. But how can you break the cycle of distrust? Instead of waiting for the other side to blink, both parties must put aside the need to win “this deal at this time” and begin to lay the foundation for a trusted relationship by negotiating how they will negotiate in the future.

For example, they should start by negotiating what negotiating tactics are trustful – as well as which ones are distrustful, of course. Reviewing a glossary of negotiating terms is a great starting point. Both sides should go down the list and agree – together – on which negotiating tactics are fair and trusting and which are trust-busting so they can be avoided.

Think about it: Ban the good-cop, bad-cop tactic. Avoid stonewalling, escalation tactics, leaking information, lying, unfair framing methods, power plays and “If I do this, you’ll do that” approaches.

By completing this exercise, the UAW and automakers will realize they both have created an environment of distrust because they are using trust-busting tactics. Once both parties recognize they are perpetuating a vicious cycle of distrust, they can consciously stop the behaviors that encourage distrustful negotiating tactics. Rather, they’ll intentionally promote and use only trust-building tactics.

Next, they should decide on clear consequences for what will happen if either party does not commit to using the agreed-upon trust-building tactics. That’s right: What are the consequences when one party falls into old-school behaviors based on self-interest and power plays?

For example, what if for every distrustful move, the offending party was penalized in the negotiation process? How would that work? Let’s say the parties are negotiating 20 items in the contract. Each side gets to put a weighted ranking on the importance of each item. Slip up with distrustful behavior and lose one of the items on your negotiating list. Every distrustful move is a lost opportunity for your organization.

Working together to build a trusting management-labor relationship might seem like it requires a Herculean effort. Still, it’s got to be less painful than the $10.4 billion lost in economic benefits that the U.S. economy has had to absorb because of the recent strike.

For more on negotiating how to negotiate, see “Getting to We: Negotiating Agreements for Highly Collaborative Relationships.”