Joseph White and David Shepardson
Updated Thu, September 14, 2023
May Day rally for media workers held by The NewsGuild of New York on International Workers' Day in Manhattan, New York City
By Joseph White and David Shepardson
DETROIT (Reuters) -The United Auto Workers union launched simultaneous strikes at three factories owned by General Motors, Ford and Chrysler parent Stellantis early on Friday, kicking off the most ambitious U.S. industrial labor action in decades.
The walkouts at the "Detroit Three" will halt production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck, along with other popular models. UAW President Shawn Fain said the union will hold off for now on more costly company-wide strikes, but said all options are open if new contracts are not agreed.
Fain laid out plans for the unprecedented, simultaneous walkouts in a Facebook Live address less than two hours before the expiration of the old contract.
The walkouts capped weeks of clashes between Fain and Detroit Three executives over union demands for a bigger share of profits generated by combustion trucks, and stronger job security as automakers shift to electric vehicles.
"For the first time in our history we will strike all three of the Big Three," Fain said.
The strikes involving a combined 12,700 workers will take place at assembly plants operated by Ford in Wayne, Michigan, GM in Wentzville, Missouri and Stellantis' Jeep brand in Toledo, Ohio. They are critical to the production of some of the Detroit Three's most profitable vehicles.
Fain's decision to go with targeted walkouts could limit the cost to the union of strike pay. The UAW has a strike fund of $825 million, which pales in comparisons to billions in liquidity the automakers have built up thanks to robust profits from the trucks and SUVs UAW members build.
Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data.
But a week-long shutdown at Stellantis' Jeep plant in Toledo could cut revenue by more than $380 million, based on data from the company's financial reports.
"This is more of a symbolic strike than an actual damaging one," said Sam Fiorani, a production forecaster at Auto Forecast Solutions, who added that he had expected more in the first wave of the strike.
"If the negotiations don't go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two," he said.
Fiorani estimated the limited action would stop production of about 24,000 vehicles a week. And while it targets some key brands, like the Bronco, buyers would be willing to wait, for now.
COMPANIES FEAR COST HIKES
The union has said it wants a 40% raise. The companies have offered up to 20%, but without key benefits demanded by the union. None of the Detroit Three has proposed eliminating tiered wage systems that require new hires to stay on the job for eight years to earn the same as veteran workers - a central UAW demand.
Ford said the UAW's latest proposals would double its U.S. labor costs and make it uncompetitive against Tesla and other non-union rivals. A walkout could mean that UAW profit-sharing checks for this year would be "decimated," the company said.
Stellantis responded to the union walkout by saying it had immediately put the company in "contingency mode" and would take all of the appropriate structural decisions to protect the company and its North American operations, without elaborating.
Fain said earlier this week that Stellantis had proposed shutting as many as 18 U.S. facilities.
GM said it was disappointed by the walkout, and would continue to "bargain in good faith."
Ahead of Fain's address, GM's top manufacturing executive Gerald Johnson said in a video that the UAW's wage and benefits proposals would cost the automaker $100 billion, "more than twice the value of all of General Motors and absolutely impossible to absorb." He did not detail how the union proposals would result in that cost, or over what time frame.
Fain has rejected the automakers' assertions that union demands would cost too much, saying the companies have spent billions on share buybacks and executive salaries.
Suppliers and other industries that depend on automakers and their workers could see demand and cash dry up if the UAW shut down Detroit Three's U.S. manufacturing operations. The standoff has become a political issue with President Joe Biden, facing re-election next year, prominently calling for a deal.
Biden is pouring billions in federal subsidies into expanding sales of electric vehicles. But the shift to EVs could threaten UAW combustion powertrain jobs. The union has not endorsed Biden's re-election.
"I think the Biden administration just continues to watch this slow-moving car crash as its EV strategy collides head on with unions," Wedbush analyst Dan Ives said.
UAW President Fain has taken an unorthodox approach to the negotiations, bargaining with all three Detroit automakers simultaneously. Past UAW leaders chose one company to set a contract pattern for the other two. Fain has played the companies against each other, seeking to drive up their offers.
While a deal with one or more of the automakers could come at any time, the disruption is an opportunity for non-union automakers in the United States, including Tesla, Toyota, Honda and Mercedes.
Those non-union factories, plus imported vehicles, account for more than half of the vehicles sold in the U.S. market.
A full strike would hit earnings by about $400 million to $500 million at each affected automaker per week of lost production, Deutsche Bank has estimated. Some of those losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months.
(Reporting by Joseph White in Detroit, David Shepardson in Washington, Peter Henderson in San Francisco and Mehr Bedi in Bengaluru; Editing by Jamie Freed)
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Auto workers strike after contract talks with US car giants fail
United Auto Workers union unable to agree deal with Ford, GM and Stellantis, who have seen profits and executive pay soar
Michael Sainato
@msainat1
United Auto Workers union unable to agree deal with Ford, GM and Stellantis, who have seen profits and executive pay soar
Michael Sainato
@msainat1
THE GUARDIAN
Auto workers have launched a series of strikes after their union failed to reach agreement with the US’s three largest manufacturers over a new contract, kicking off the most ambitious industrial labor action in decades.
The deadline for talks between Ford, General Motors, Stellantis and the United Auto Workers (UAW) expired at midnight on Thursday, with the sides still far apart on the union’s new contract priorities.
The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US.
The strikes kicked off at midnight at a General Motors plant in Wentzville, Missouri, a Stellantis plant in Toledo, Ohio, and a Ford assembly plant in Wayne, Michigan.
They involve a combined 12,700 workers at the plants, which are critical to the production of some of the Detroit Three’s most profitable vehicles including the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck.
“This is our defining moment,” said Fain during a livestream on Thursday night, less than two hours before the strike was set to begin.
Fain said he would join the picket line at the Wayne plant when the action began at midnight and did not rule out broadening the strikes beyond the initial three targets. “If we need to go all out, we will.”
The UAW has a $825m strike fund that is set to compensate workers $500 a week while out on strike and could support all of its members for about three months. Staggering the strikes rather than having all 150,000 members walk out at once will allow the union to stretch those resources.
A limited strike could also reduce the potential economic damage economists and politicians fear would result from a widespread, lengthy shutdown of Detroit Three operations.
Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data.
But a week-long shutdown at Stellantis’ Jeep plant in Toledo could cut revenue by more than $380 million, based on data from the company’s financial reports.
“If the negotiations don’t go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two,” said Sam Fiorani, a production forecaster at Auto Forecast Solutions.
He estimated the limited action would stop production of about 24,000 vehicles a week.
Among the union’s demands are a 40% pay increase, an end to tiers, where some workers are paid at lower wage scales than others, and the restoration of concessions from previous contracts such as medical benefits for retirees, more paid time off and rights for workers affected by plant closures.
Workers have cited past concessions and the big three’s immense profits in arguing in favor of their demands. The automakers’ profits jumped 92% from 2013 to 2022, totaling $250bn. During this same time period, chief executive pay increased 40%, and nearly $66bn was paid out in stock dividends or stock buybacks to shareholders.
The industry is also set to receive record taxpayer incentives for transitioning to electric vehicles.
Despite these financial performances, hourly wages for workers have fallen 19.3%, with inflation taken into account, since 2008.
The Biden administration is reportedly considering emergency aid for smaller supply firms to the automaker manufacturers due to the strike, and president Biden spoke to Fain on the status of negotiations on Thursday.
Ford said in a statement the UAW’s latest proposals would double its US labor costs. A walkout could mean that UAW profit-sharing checks for this year will be “decimated,” the company said.
GM and Stellantis declined to comment ahead of the midnight strike deadline.
However in an earlier video GM’s top manufacturing executive Gerald Johnson said that the UAW’s wage and benefits proposals would cost the automaker $100 billion, “more than twice the value of all of General Motors and absolutely impossible to absorb.” He did not detail how the union proposals would result in that cost, or over what time frame.
And in an appearance on CNBC on Thursday evening, Ford CEO Jim Farley also criticized the union, claiming, “there’s no way we can be sustainable as a company,” if they met the union’s wage demands.
GM CEO Mary Barra also said in a letter to employees about the status of negotiations and the company’s latest offer to the union, “Remember: we had a strike in 2019 and nobody won.”
The contract fight has garnered significant support from the public and US labor movement. Drivers represented by the Teamsters have pledged not to cross the picket line, halting deliveries of vehicles from the automakers throughout the strike. Several labor unions, environmental, racial and social justice groups have publicly announced support for the UAW in their fight for new contracts.
Fri 15 Sep 2023
Auto workers have launched a series of strikes after their union failed to reach agreement with the US’s three largest manufacturers over a new contract, kicking off the most ambitious industrial labor action in decades.
The deadline for talks between Ford, General Motors, Stellantis and the United Auto Workers (UAW) expired at midnight on Thursday, with the sides still far apart on the union’s new contract priorities.
The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US.
The strikes kicked off at midnight at a General Motors plant in Wentzville, Missouri, a Stellantis plant in Toledo, Ohio, and a Ford assembly plant in Wayne, Michigan.
They involve a combined 12,700 workers at the plants, which are critical to the production of some of the Detroit Three’s most profitable vehicles including the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck.
“This is our defining moment,” said Fain during a livestream on Thursday night, less than two hours before the strike was set to begin.
Fain said he would join the picket line at the Wayne plant when the action began at midnight and did not rule out broadening the strikes beyond the initial three targets. “If we need to go all out, we will.”
The UAW has a $825m strike fund that is set to compensate workers $500 a week while out on strike and could support all of its members for about three months. Staggering the strikes rather than having all 150,000 members walk out at once will allow the union to stretch those resources.
A limited strike could also reduce the potential economic damage economists and politicians fear would result from a widespread, lengthy shutdown of Detroit Three operations.
Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data.
But a week-long shutdown at Stellantis’ Jeep plant in Toledo could cut revenue by more than $380 million, based on data from the company’s financial reports.
“If the negotiations don’t go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two,” said Sam Fiorani, a production forecaster at Auto Forecast Solutions.
He estimated the limited action would stop production of about 24,000 vehicles a week.
Among the union’s demands are a 40% pay increase, an end to tiers, where some workers are paid at lower wage scales than others, and the restoration of concessions from previous contracts such as medical benefits for retirees, more paid time off and rights for workers affected by plant closures.
Workers have cited past concessions and the big three’s immense profits in arguing in favor of their demands. The automakers’ profits jumped 92% from 2013 to 2022, totaling $250bn. During this same time period, chief executive pay increased 40%, and nearly $66bn was paid out in stock dividends or stock buybacks to shareholders.
The industry is also set to receive record taxpayer incentives for transitioning to electric vehicles.
Despite these financial performances, hourly wages for workers have fallen 19.3%, with inflation taken into account, since 2008.
The Biden administration is reportedly considering emergency aid for smaller supply firms to the automaker manufacturers due to the strike, and president Biden spoke to Fain on the status of negotiations on Thursday.
Ford said in a statement the UAW’s latest proposals would double its US labor costs. A walkout could mean that UAW profit-sharing checks for this year will be “decimated,” the company said.
GM and Stellantis declined to comment ahead of the midnight strike deadline.
However in an earlier video GM’s top manufacturing executive Gerald Johnson said that the UAW’s wage and benefits proposals would cost the automaker $100 billion, “more than twice the value of all of General Motors and absolutely impossible to absorb.” He did not detail how the union proposals would result in that cost, or over what time frame.
And in an appearance on CNBC on Thursday evening, Ford CEO Jim Farley also criticized the union, claiming, “there’s no way we can be sustainable as a company,” if they met the union’s wage demands.
GM CEO Mary Barra also said in a letter to employees about the status of negotiations and the company’s latest offer to the union, “Remember: we had a strike in 2019 and nobody won.”
The contract fight has garnered significant support from the public and US labor movement. Drivers represented by the Teamsters have pledged not to cross the picket line, halting deliveries of vehicles from the automakers throughout the strike. Several labor unions, environmental, racial and social justice groups have publicly announced support for the UAW in their fight for new contracts.
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