Detroit’s Big Three automakers failed to arrive New employment agreement Before their contracts expired, employees represented by the United Auto Workers union expired at midnight Thursday, sparking one of the largest strikes to hit the United States in years.
UAW President Sean Fine said in a Facebook Live address late Thursday that employees at three Ford, GM and Stellantis plants will leave the job immediately: the GM Assembly Plant in Wentzville, Missouri, the Ford Assembly Plant in Wayne, Michigan, and the Ford Assembly Plant In Wayne, Michigan. Stellantis Assembly Complex in Toledo, Ohio.
“Tonight, for the first time in our history, we will hit the big three at the same time,” he said.
Approximately 12,700 employees at those facilities will participate in the labor proceedings. Employees will be paid about $500 weekly from the UAW’s $825 million strike fund, according to the Associated Press.
“Local residents who have not yet been invited to join the strike will continue to work under the expired agreement,” Fine said.
He told CNN he did not expect any bargaining on Friday but that the two sides could return to the table on Saturday.
Dozens of workers gathered outside the Ford plant in Wayne as the midnight deadline approached, while a massive rally was scheduled for Friday afternoon in downtown Detroit.
“We will show our strength and unity on the first day of this historic action,” Fine said. “All options remain on the table.”
Strategically, targeting just three plants would give the UAW the flexibility to potentially shut down work at other facilities when union officials resume negotiations with automakers. It will also maintain the labor group’s strike fund, according to Benjamin Salisbury, an auto industry analyst at Hite Securities.
The work stoppage marks the first strike at Detroit automakers since GM workers struck in 2019.
Why is the UAW on strike?
The UAW’s demands include a 36% pay increase across a four-year contract; Retirement benefits for all employees; Limited use of temporary workers; More paid leave, including a Four-day work week; and more job protections, including the right to strike against factory closures.
As talks reached an impasse on Thursday, leaders at Ford, General Motors and Stellantis (formerly Fiat Chrysler) said they had made multiple offers to the UAW in recent weeks in hopes of signing a new deal for the union’s 145,000 workers.
“I think they are preparing for a historic strike with all three companies,” Ford CEO Jim Farley told CBS News earlier Thursday.
“At 8 p.m. this evening at the Solidarity House in Detroit, the UAW filed its first substantive counterproposal to Ford just hours after the expiration of the current four-year collective bargain agreement,” Ford said in a later statement.
What automakers say
After the strike began, Stellantis said it was “deeply disappointed by the refusal of UAW leadership to engage in a responsible manner to reach a fair agreement that is in the best interests of our employees, their families, and our customers. We have immediately placed the company on a state of emergency.” situation and we will make all appropriate structural decisions to protect our North American operations and the company.”
Stellantis, founded in 2021 in a merger between Fiat Chrysler and European automaker Groupe PSA, owns Chrysler, Dodge, Jeep and Ram, along with major foreign brands including Citroën, Peugeot and Maserati.
GM CEO Mary Barra told CBS News on Friday that the strike is happening despite the company’s efforts to negotiate in good faith.
“We’ve been at the table since July 18,” Barra said, adding that GM initially received more than 1,000 applications from the UAW. “We have a historic offer on the table and we are on the table now ready to continue.”
Barra also said GM is unable to give UAW members the pay increases they seek because some of the company’s profits must be spent on developing new products, especially electric vehicles.
“We have to make sure the company is successful for the next 115 years, and that means we need to invest,” she said. “If we don’t invest in and source new products that customers want to buy, it impacts the number of vehicles we make, which directly impacts the number of people who are part of our manufacturing team.”
Although the Big Three have not been willing to meet all of the UAW’s demands, they maintain that they have made reasonable counteroffers and are willing to negotiate further. In outlining their position, automaker officials say they are under enormous pressure to keep costs and car prices low in order to compete with Tesla and foreign automakers, especially as the companies compete for a share of the growing electric vehicle market.
“Their initial offer was to pay each worker about $300,000 hourly, and work four days,” Farley said Thursday of the UAW’s demands. “This would put our company out of business.”
“If the strike lasts longer than three to four weeks, it will be somewhat detrimental to GM and Ford’s EV strategy in 2024. … While Detroit supporters are fighting the UAW, there’s a bottle of champagne being frozen at Tesla headquarters,” he said. Wedbush Securities analyst Dan Ives said in a report.
He said that although Fine acknowledged that automakers had raised their wage offers, the proposals were still insufficient. Ford offered 20% interest over 4.5 years, while GM and Stellantis offered 18% and 17.5% over four years, respectively.
Analysts warn that a strike could disrupt the domestic auto industry, cause vehicle prices to rise, and lead to losses in wages and profits amounting to about $6 billion, while reducing overall US economic growth by up to 0.3%.
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