March 04, 2024

UAW strikes spread as 7,000 more workers join the picket line

United Auto Workers member Mariusz Mirek holds a picket sign near a General Motors Assembly Plant in Delta Township, Michigan. The UAW union expanded its strikes against Detroit automakers, adding 7,000 workers at a Ford plant in Chicago and a General Motors assembly factory near Lansing, Michigan.

DETROIT (AP) — The United Auto Workers union expanded strikes against Detroit automakers, ordering 7,000 more workers to walk off the job in Illinois and Michigan to put more pressure on the companies to improve their offers.

It was the second time the union has widened the walkout, which started two weeks earlier at three assembly plants before the most recent addition of a Ford plant in Chicago and a General Motors assembly factory near Lansing.

Union President Shawn Fain told workers in a video appearance that the strikes were escalated because Ford and GM refused “to make meaningful progress” in ongoing contract talks. Jeep maker Stellantis was spared from the third round of strikes.

Ford and GM shot back as a war of words with the union also intensified. Ford accused the UAW of holding up a deal mainly over union representation at electric vehicle battery plants, most of which are joint ventures with a Korean manufacturer.

“There is still time to reach an agreement and avert disaster,” Ford said in a statement, adding that the strikes are starting to affect fragile companies that make parts for factories affected by the walkouts.

GM’s manufacturing chief said the union was calling more strikes “just for the headlines, not real progress.”

The GM plant in Delta Township, near Lansing, makes large crossover SUVs such as the Chevrolet Traverse and Buick Enclave. A nearby metal parts stamping plant with 300 workers will remain open, Fain said.

The Chicago Ford plant makes the Ford Explorer and Explorer Police Interceptors, as well as the Lincoln Aviator SUV. The Explorer Interceptor is the nation’s top-selling police vehicle.

Fain said union bargainers are still talking to all three companies, and he was hopeful they could reach deals.

Stellantis, he said, made significant progress moments before his appearance on Facebook Live by agreeing to unspecified cost-of-living raises, the right not to cross a picket line and the right to strike over plant closures.

Raneal Edwards, a longtime GM employee who works at the Lansing-area factory, said she was “shocked, but happy” to hear that her plant would join the strike.

“I feel like they don’t understand that this is about more than wages,” Edwards said. “It’s about having security at our jobs.”

Edwards said she believes the UAW’s strategy of slowly adding more plants will work.

“I love it because it keeps us on our toes. No one knows what’s next,” she said.

But in a note to workers Sept. 29, Edwards’ boss, GM manufacturing chief Gerald Johnson, said the company has yet to receive a counteroffer from union leaders to a Sept. 21 economic proposal.

Ford CEO Jim Farley accused the union of holding an agreement hostage over union representation of workers at future electric vehicle battery factories.

Farley, on a conference call with industry analysts, said high wages at battery plants would make Ford’s electric vehicles much costlier than those from Tesla and other competitors.

“Record contract? No problem. Mortgaging our future? That’s a big problem. We will never do it,” Farley said.

Ford’s battery plants, Farley said, have not been built and mostly are joint ventures with a South Korean battery maker.

“They have not been organized by the UAW yet because the workers haven’t been hired and won’t be for many years to come,” Farley said.

Fain later accused Farley of lying about the talks and said the union gave Ford a counteroffer on Sept. 25, but has not heard back.

The union is far apart on economic issues with Ford, Fain said, such as a defined-benefit pension for workers hired after 2007 and health insurance for retirees. Workers hired after 2007 get a 401(k)-style retirement plan.

But Fain did say “job security in the EV transition” remains an issue.

Automakers have long said that they’re willing to give raises, but they fear that a costly contract will drive up vehicle prices, making them more expensive than models made at nonunion U.S. plants run by foreign automakers, largely in the South.

The union counters that labor costs are only 4% to 5% of the cost of a vehicle, and that the companies are making billions in profits and can afford big raises.

Wedbush analyst Dan Ives said the expanded strikes show both sides are digging in for a potentially long battle.

Ives wrote in a note to investors that President Joe Biden’s administration is watching union demands collide with his push for cleaner electric vehicles.

Biden, who has billed himself as the most union-friendly president in history, traveled Sept. 26 to the Detroit area to walk picket lines with workers at a GM parts warehouse.

Republican front-runner Donald Trump also traveled to the Detroit area for a rally at a nonunion truck parts maker.

Offers on the table from the companies will add $3,000 to $5,000 to the cost of an average electric vehicle that would be passed on to consumers, Ives wrote. Such costs “would ultimately be a torpedo to the future business models” of the automakers, he wrote.

The electric vehicle battery plants are a huge issue for the union’s future. Some industry executives, including Farley, say it will take up to 40% fewer workers to make EVs because they have fewer moving parts.

So, the union is looking to organize battery plants and win top wages so displaced workers have somewhere to go, especially those making combustion engines and transmissions.

Other industry officials, including GM CEO Mary Barra, say there will be enough jobs for all as the industry moves away from gasoline vehicles.

The automakers’ last known wage offers were around 20% over the life of a four-year contract, a little more than half of what the union has demanded.

Other contract improvements, such as cost-of-living increases, restoration of defined-benefit pensions for newly hired workers and an end to tiers of wages within the union are also on the table.

The union went on strike Sept. 15, immediately after its contracts expired.

The UAW initially targeted one assembly plant from each company. Then it added 38 parts distribution centers run by GM and Stellantis. Ford was spared from that expansion because talks with the union were progressing then.

The union has structured its walkouts in a way that has allowed the companies to keep making pickup trucks and large SUVs, their top-selling and most profitable vehicles.

Previously it shut down assembly plants in Missouri, Ohio and Michigan that make midsize pickup trucks, commercial vans and midsize SUVs, all of which are profitable, but don’t make as much money as the larger vehicles.

The new strikes against GM and Ford target crossover SUVs that are big moneymakers for both companies.

In the past, the union picked one company as a potential strike target and reached a contract agreement with that company to be the pattern for the others.

But this year, Fain introduced a novel strategy of targeting a limited number of facilities at all three automakers.

About 25,000, or about 17%, of the union’s 146,000 workers at the three automakers are now on strike, allowing it to preserve a strike fund that was worth $825 million before Sept. 14.