UAW targets three Detroit automakers in first simultaneous attack

By RockedBuzz 7 Min Read
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By Joseph White and David Shepardson

DETROIT (RockedBuzz via Reuters) – The United Auto Workers union launched simultaneous strikes on Friday at three factories owned by General Motors, Ford and Chrysler parent Stellantis, kicking off the most ambitious U.S. industrial industrial action in decades.

The strikes at the Detroit Three will halt production of the Ford Bronco pickup truck, Jeep Wrangler and Chevrolet Colorado, along with other popular models.

“For the first time in our history we will be striking all three of the Big Three,” UAW President Shawn Fain said, adding that the union will suspend more costly company-wide strikes for now, but all options are open if new ones are struck. contracts. not agreed.

Fain laid out plans for the strikes on Facebook Live, less than two hours before the old contract expired.

The action caps weeks of clashes between Fain and three Detroit executives over union demands for a bigger share of the profits generated by combustion trucks and greater job security as automakers shift to electric vehicles.

Executives said the union’s demands would make the automakers uncompetitive with other non-union rivals. GM CEO Mary Barra told CNBC on Friday that the automaker would continue to negotiate, even though she was “frustrated and disappointed” by the strike, which would not be good for the industry.

The standoff has become a political issue, with President Joe Biden, who faces re-election next year, calling for a deal. Biden will talk about the strike later Friday, the White House said.

The strikes involving a total of 12,700 workers will take place at assembly plants operated by Ford in Wayne, Michigan, GM in Wentzville, Missouri and Jeep brand Stellantis in Toledo, Ohio. They are critical to the production of some of automakers’ most profitable vehicles.

Friday’s strike was smaller than some analysts expected.

“This is more of a symbolic strike than a truly harmful strike,” said Sam Fiorani, a production meteorologist at Auto Forecast Solutions, who added that he expected more from the first strike wave.

“If the negotiations don’t go in a direction that Fain thinks is positive, we can expect a bigger strike within a week or two,” he said.

Targeted strikes could limit the cost of strike payments to the UAW, which has an $825 million strike fund. That pales in comparison to the billions that automakers have amassed from robust profits from trucks and SUVs built by UAW members.

According to data from Cox Automotive, Stellantis has more than 90 days of Jeeps in stock and has been building SUVs and trucks overtime. But a week-long shutdown at Jeep’s Toledo plant could reduce revenue by more than $380 million, according to Stellantis financial reports.

Fiorani estimated that the limited action would halt production of about 24,000 vehicles per week.

In Wayne, Michigan, hundreds of people, including night-shift auto workers and their supporters, gathered at a Ford assembly plant at the start of the strike.

Stellantis shares fell more than 1% in early trading, among the worst performers on the euro zone’s STOXX50 index. Ford shares fell 1.9% and GM shares fell 1.2% in early premarket trading in New York on light volume.


The UAW said it wanted a 40% raise, while automakers offered up to 20%, but without the key benefits the union sought. None of the Detroit Three has proposed eliminating tiered pay systems that require new hires to stay on the job for eight years to earn the same as veteran workers – a key demand of the UAW.

Ford said the UAW’s latest proposals would double the cost of U.S. labor and make it uncompetitive with Tesla and other non-union rivals. A strike could mean that the UAW’s profit-sharing checks for this year would be “decimated,” he said.

Stellantis said it immediately entered “emergency mode” and would make structural decisions to protect the company and its North American operations, without further details.

Fain said earlier this week that Stellantis had proposed closing as many as 18 U.S. facilities.

GM’s top manufacturing executive, Gerald Johnson, said in a video Thursday that the UAW’s wage and benefit proposals would cost the automaker $100 billion. He did not explain in detail how the union’s proposals would entail that cost, or over what time frame.

“All three will very soon face difficult legal, financial and operational issues at these plants and with retailers and suppliers,” said Patrick Anderson of the Anderson Economic Group in Chicago.

Fain rejected automakers’ claims that union demands would cost too much, saying the companies have spent billions on stock buybacks and executive salaries.

Suppliers and other industries that depend on automakers and their workers could see demand and liquidity dry up if the strike lasts long.

While Biden is investing billions in federal subsidies to expand electric vehicle sales, this shift could threaten jobs in the combustion engine industry, and the UAW has not endorsed his re-election.

Biden’s likely opponent, former President Donald Trump, on Friday criticized the shift to electric vehicles as a job killer for the UAW in an effort to woo their votes.

While a deal with one or more automakers could come at any time, the disruption presents an opportunity for non-union automakers in the United States, including Tesla, Toyota, Honda and Mercedes.

These non-union factories, plus imports, account for more than half of the vehicles sold on the U.S. market.

A full strike would impact earnings of about $400 million to $500 million for each affected automaker for each week of lost production, Deutsche Bank estimates. Some of these losses could be recouped by subsequently increasing production schedules, but this possibility disappears when the 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 Bangalore; Editing by Jamie Freed and Alexander Smith)

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