Even after escalating a strike against Detroit automakers on Friday, the United Auto Workers union still has enough leverage to force the companies to agree to significant increases in wages and benefits.
So far, only about 12% of union members have taken part in the strike. If it chooses, the UAW could significantly increase the number of workers striking assembly and parts plants at GM, Ford and Strantis, owner of the Jeep and Ram brands.
However, the UAW’s emerging strategy also poses potentially significant risks for the union. By expanding the strike from three large auto assembly plants to all 38 GM and Ford parts distribution centers, the UAW could anger people who may not be able to get their vehicles repaired at service centers that lack parts.
The union’s thinking appears to be that by striking auto production and parts facilities, it will force automakers to negotiate a relatively quick end to the strike, which is now in its second week. However, some analysts say that to do so, unions may have to take more aggressive action.
“We believe the next step for the UAW is to pursue a more nuclear option – targeting core plants in and around Detroit,” said Wedbush Securities analyst Daniel Ives. A wider strike.” “That would be a torpedo.”
With so many workers and factories still operating, unions have options to squeeze companies harder, said Sam Abuelsamid, an analyst at consulting firm Guidehouse Insights.
“They can add more assembly plants to the list,” Abu Samid said. “They can target more factories that produce the most profitable vehicles.”
As examples, he pointed to a GM plant in Flint, Mich., that builds heavy-duty pickup trucks, and the Stellantis plant in Sterling Heights, Mich., which builds Ram trucks.
All three companies said talks with unions were continuing Saturday, though officials said no major announcements were expected.
In Canada on Saturday, Ford workers began voting on a tentative deal that their union said would boost base pay by 15 per cent over three years, along with cost-of-living increases and a $10,000 ratification bonus. The tentative agreement was reached earlier this week, just hours before the strike deadline.
The Unifor union said the deal covers 5,600 workers and includes better retirement benefits. If the deal is approved in a vote that ends Sunday morning, the union will use it as a model for new contracts at GM and Stellantis plants in Canada.
In the United States, UAW strikes began more than a week ago, attacking three assembly plants – one each at General Motors, Ford and Stellantis. In expanding the strike on Friday, the UAW only attacked parts distribution centers for General Motors and Stellantis. UAW President Shawn Fain said Ford was spared the latest strike because it made progress in negotiations with the union.
The aim of cracking down on parts centers is to put pressure on General Motors and Fiat Chrysler’s successor Stellantis by hurting the dealers that service those companies. Repair shops are profit centers for dealers, so this strategy may prove effective. Millions of motorists rely on these shops to maintain and repair their cars and trucks.
“It hurts dealers hard and it hurts customers who are buying these expensive cars in good faith,” said Cornell University labor expert Art Whitten. “You just tell all your customers, ‘Hey, we can’t fix what we just Sell you those $50,000 to $70,000 cars because we can’t get you the parts.'”
The more militant unions have refused to publicly discuss their strike strategy. Fein has said repeatedly that a key part of his plan is to keep companies guessing about the UAW’s next move. Indeed, the union has shown unusual discipline in sticking to its talking points.
On Friday’s picket line, Fein was asked whether a strike against spare parts centers would hurt and potentially alienate consumers.
“What hurts consumers in the long run is that these companies have increased vehicle prices by 35% over the past four years,” he countered. “It’s not because of our salaries. Our salaries went up 6%, the CEO’s salary went up 40%. “
Selling parts and providing service is highly profitable for car dealers. AutoNation reported that its dealer repair shop gross margins were 46% last year. The problem these companies face is that dealers and other repair shops often run low on inventory and rely on receiving parts quickly from manufacturer warehouses.
Mike Stanton, president of the National Automobile Dealers Association, said his members want to avoid anything that would compromise customer service, “so we certainly hope that the automakers and the UAW can come to an agreement quickly and amicably.”
To compensate for the losses of striking workers, automakers are weighing options, including staffing parts warehouses with salaried workers.
“We have contingency plans in place for a variety of scenarios and are prepared to take steps that are best for our business and our customers,” GM spokesman David Barnas said. “We are evaluating if and when Implement these plans.”
Likewise, Stellantis spokesperson Jodi Tinson said: “We have contingency plans in place to ensure we meet our commitments to our dealers and customers.” She declined to provide further details.
In talks with the companies, unions point to the automakers’ recent huge profits and high CEO salaries and seek wage increases of about 36% over four years. The companies quoted slightly more than half that amount.
The companies say they can’t afford to meet the union’s demands because they need to invest profits in a costly transition from gasoline-powered cars to electric vehicles. They immediately dismissed some demands, including a 32-hour work week and pay for 40 hours.
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Associated Press writer Alexandra Olson in New York contributed to this report.
