Automakers Spend Billions In Stock Buybacks But Plead Poverty To Workers

The Big Three car companies have authorized $5 billion in stock buybacks over the past year.

by Matthew Cunningham-Cook and Lucy Dean Stockton, The Lever

Roughly 150,000 auto workers are preparing to launch what may be the biggest strike in decades this Thursday over their employers’ refusal to provide adequate pay and job security. Meanwhile, in the past twelve months, the Big Three automakers — General Motors, Ford, and Stellantis — have authorized $5 billion in stock buybacks, effectively giving billions of dollars to shareholders that could have gone to autoworkers.

On top of the stock buybacks, the Big Three have reported $21 billion in profits in just the first six months of 2023. Despite the enormous gains, the companies have cried poverty in response to union demands for wage increases to make up for decades of pay stagnation.

a woman holds a sign at a uaw autoworkers strike

In a statement released last month, General Motors (GM) claimed that the United Auto Workers (UAW)’s demands “would threaten our ability to do what’s right for the long-term benefit of the team.”

As part of its efforts to force the auto companies to spend more on their workers, the UAW has taken aim at the corporations’ stock buyback approach, in which companies repurchase their shares to drive up their short-term value. In their negotiations over a new contract, which expires on Thursday, the union proposed automatic payments to workers when the companies authorize buybacks or expand dividends.