September 18, 2023
The Detroit Three automakers collectively have about 150,000 UAW-represented employees at dozens of factories nationwide, making popular vehicles like the Ford F-150, Chevrolet Silverado, and Jeep Wrangler.
UAW President Shawn Fain said the union would begin a strike at three factories after national contracts expired at 11:59pm on Thursday, September 14, rather than striking all U.S. operations of the companies:
- GM’s assembly plant in Wentzville, Missouri;
- Ford’s assembly and paint plant in Wayne, Michigan; and
- Stellantis’ assembly plant in Toledo, Ohio.
There has never been a strike against all three automakers at once. “We must show the world that our fight is a righteous fight,” Fain said Thursday night on a livestream.
Fain said the UAW could gradually expand the strike to include additional plants —or all of them—if the automakers don’t give in to the union’s demands: “If we need to go all out, we will. Everything is on the table.”
Workers who go on strike will get $500 per week in strike pay from the union.
Ford said in a statement on Thursday night that the UAW didn’t offer a “substantive counterproposal” until 8 p.m. Thursday and the company had delivered a “historically generous” offer that included wage hikes, COLA, more paid-time off, and higher retirement contributions.
The UAW’s counteroffer “showed little movement from the union’s initial demands,” Ford said.
“We are disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments,” GM said in a statement, adding that “we will continue to bargain in good faith with the union to reach an agreement as quickly as possible.”
The automakers want a deal that will ensure they can compete with non-unionized automakers like Tesla, which already has a cost advantage over the Detroit Three.
In their latest offers, GM and Ford pitched a 20% pay increase and agreed to a return to cost-of-living adjustments (COLA)—one of the UAW’s demands. But the two sides were far apart on benefits as of Thursday afternoon.
A strike at select plants could quickly become “a logistical nightmare for the Detroit Three as it relates to the supply chain because automakers will have to adjust deliveries of specific parts to their assembly plants,” CFRA Research analyst Garrett Nelson said Thursday in a written analysis.
“Not knowing which plants the UAW will target in advance could create a massive level of uncertainty and have a crippling impact on production,” Nelson added.
If it turns into a strike at all of the automakers’ U.S. plants, it would cost more than $5 billion over a period of 10 days, according to the Anderson Economic Group.
Among the automakers’ biggest concerns is that they’ll fall behind on electric vehicles if a prolonged strike sets them back or leads to unaffordable contracts.
“This is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success,” Wedbush Securities analyst Dan Ives said Thursday in a research note, using the area code for Detroit.
But the UAW says the the Detroit Three can afford the compensation increases it’s asking for after years of massive profits stemming from record-high vehicle prices and strong sales.
Research contact: @axios