Detroit– About 13,000 U.S. auto workers stopped building cars and went on strike on Friday because their leaders were unable to bridge a wide gap between what the union is demanding in contract negotiations and what Detroit’s Big Three automakers are willing to pay.
Members of the United Auto Workers began picketing at the General Motors assembly plant in Wentzville, Missouri; the Ford plant in Wayne, Michigan, near Detroit; and the Stellantis Jeep plant in Toledo, Ohio.
With the four-year contract expiring at 11:59 p.m. Thursday, it’s the first time in the union’s 88-year history that all three companies have been laid off at the same time.
The strikes could chart the future of unions and the domestic auto industry at a time when U.S. labor is flexing its muscle and auto companies face a historic shift from making internal-combustion-engine cars to electric vehicles.
If this situation persists for a long time, dealers could experience vehicle shortages and prices could rise, affecting a U.S. economy already under pressure from rising inflation. The strike could even become a factor in next year’s presidential election, as it tests Joe Biden’s proud claim to be the most union-friendly president in U.S. history.
“Workers everywhere are watching this,” said Liz Shuler, president of the AFL-CIO, a coalition of 60 unions with 12.5 million members .
This strike is significantly different from previous strikes during UAW negotiations. Under its combative new president, Shawn Fain, the union is targeting not one company but all three. But not all of the 146,000 UAW members at the company’s plants are on the picket lines, at least not yet.
Instead, the UAW targeted a handful of plants, urging company negotiators to raise offers that were well below the union’s demand for 36 percent wage increases over four years. General Motors and Ford offered 20%, and Stellantis (formerly Fiat Chrysler) offered 17.5%.
Outside a Ford plant in suburban Detroit, Britney Johnson, 35, has worked at the company for about 3 1/2 years but has yet to reach the union’s maximum wage. Life increases. “I love this job. We just deserve more,” she said.
She was on the picket line outside the factory with about 400 workers.
At the Toledo Jeep plant, Candace Bowles, 52, an assembly line worker, said it felt “weird” to leave work. “I didn’t want to do it, but it had to be done,” Powers said.
As the deadline approached, she cleared her workstation and walked out as the clock struck midnight. “I’m really happy that everyone is standing together,” she said.
A limited strike would help preserve the union’s $825 million strike fund, which would be depleted in about 11 weeks if all workers strike. But Fein said if the companies don’t come up with better offers, more factories may be added.
Even Fein called the union’s demands bold, but insisted the automakers were making billions of dollars and could afford them. He scoffed at companies’ claims that costly settlements would force them to raise vehicle prices, saying labor only accounts for 4 to 5 percent of a vehicle’s cost.
“They could double our raises without raising car prices and still make millions of dollars in profits,” Fein said. “We are not the problem. Corporate greed is the problem.”
The attack capped a day in which each side complained that the other had not changed enough from its initial stance.
In addition to general wage increases, the union is seeking the restoration of cost-of-living raises, an end to varying pay levels for factory jobs, a 32-hour work week, a 40-hour wage, and a return to traditional defined benefits now only available through 401(k)-style retirement plans. Pensions for new employees, increases in pensions for retirees and other items.
Starting in 2007, workers gave up cost-of-living increases and defined-benefit pensions for new hires. The UAW created the pay scale in an attempt to help companies avoid financial difficulties before and during the Great Recession. Even so, only Ford avoided government-sponsored bankruptcy protection.
Many say it’s time to roll back these concessions because these companies are making huge profits and CEOs are making millions. They also want to ensure union representation for workers at the joint electric vehicle battery factories the companies are building so workers have a chance to build future vehicles.
Workers at top assembly plants earn about $32 an hour, plus large annual profit-sharing checks. Ford said the average annual salary last year, including overtime and bonuses, was $78,000.
About 3,300 workers are on strike at the Ford plant, which makes the Bronco SUV and Ranger midsize pickup truck. The Toledo Jeep plant has about 5,800 workers and produces the Jeep Wrangler SUV and Gladiator pickup truck. GM’s Wentzville plant, which employs about 3,600 workers, builds GMC Canyon and Chevrolet Colorado midsize pickup trucks, as well as GMC Savana and Chevrolet Express full-size vans.
Marick Masters, a business professor at Wayne State University, said the union is not targeting the companies’ big cash cows, which are full-size pickup trucks and large SUVs, but is more targeting those whose production margins are lower car factory. Detroit.
“They want to give these companies some space and not put them against the wall,” Masters said. “They’re not going to put them in the corner. You put animals in the corner and that’s dangerous. “
Automakers say they are facing unprecedented demand as they develop and build new electric vehicles while also making gasoline-powered cars, SUVs and trucks to stay afloat. They worry labor costs will rise so much that their cars will have to be priced higher than foreign automakers with U.S. factories.
General Motors CEO Mary Barra told workers in a letter Thursday that the company is delivering historic wage increases and new vehicle commitments to U.S. plants. She wrote that GM’s proposal “addresses what you told us was most important to you, despite the fiery rhetoric from UAW leadership.”
On Thursday, Ford CEO Jim Farley said on CNBC that the company would lose $15 billion over the past 10 years and go bankrupt if it agreed to the union’s demands.
Under the UAW strategy, striking workers will receive strike pay of $500 per week from the union, while other workers will continue to receive full pay. These companies are unlikely to lock their remaining workers out of their factories because they want to keep building vehicles.
It’s hard to say how long it will take for the strike to reduce dealer inventories and start hurting the company’s bottom line.
Jeff Schuster, head of automotive at Global Data Research, said Stellantis has the most inventory and can maintain it longer. The company has enough vehicles at dealers or on the way to dealers to last 75 days. Ford has a 62-day supply and General Motors has a 51-day supply.
Still, Schuster expects the strike could last longer than previous shutdowns, such as the 40-day strike against General Motors in 2019.
“It feels like there’s more risk on both sides,” he said.
