DETROIT (AP) — About 13,000 U.S. auto workers stopped making vehicles and went on strike Friday after their leaders failed to bridge the giant gap between union demands in contract negotiations and what the three Detroit automakers are willing to pay.
Members of the United Auto Workers union began protesting outside a General Motors assembly plant in Wentzville, Missouri, a Ford plant in Wayne, Michigan, near Detroit, and a Stellantis Jeep plant in Toledo, Ohio.
It was the first time in the union’s 88-year history that it withdrew from all three companies simultaneously, as four-year contracts with the companies expired at 11:59 p.m. Thursday.
The strikes will likely determine the future of the union and the U.S. auto industry at a time when American workers are showing strength and companies are facing a historic transition from building internal combustion automobiles to manufacturing electric vehicles.
If they last long, dealers could run out of vehicles and prices could rise. The walkout could even be a factor in next year’s presidential election by testing Joe Biden’s proud claim to be the most pro-union president in American history.
“Workers around the world are watching this,” said Liz Shuler, president of the AFL-CIO, a federation of 60 unions with 12.5 million members.
The strike is very different from previous UAW negotiations. Instead of going after just one company, the union, led by its pugnacious new president, Shawn Fain, is striking at all three. But not all of the 146,000 UAW members at the company’s factories are protesting on the picket lines, at least not yet.
Instead, the UAW targeted a handful of factories to pressure company negotiators to raise their offers, which fell well short of union demands for 36 percent wage increases over four years. GM and Ford offered 20% and Stellantis, formerly Fiat Chrysler, offered 17.5%.
Outside the Ford plant in suburban Detroit, Britney Johnson, 35, who has worked for the company for about 3 1/2 years and has yet to reach top union wages, said that ‘she would like a higher salary, the return of pensions and costs. life increases. “I like the work. It’s just that we deserve more,” she said.
Among the nearly 400 workers on the picket line in Michigan was Adelisa LeBron, 37, who works on the engine line. She’s been there three years and makes $24 an hour as a lower-level employee, she said.
“This strike makes me nervous,” LeBron said. “I am a single mother of 3 teenagers. It is important. With what I earn, I have to work part-time to make ends meet.
The limited strikes will help preserve the union’s $825 million strike fund, which would run out in about 11 weeks if all workers walk out. But Fain said more factories could be added if companies don’t make better offers.
Even Fain called the union’s demands bold, but he maintains that automakers are raking in billions and can afford it. He scoffed at companies’ claims that costly regulations would force them to raise vehicle prices, saying labor represents only 4 to 5 percent of vehicle costs.
“They could double our increases and not raise the price of cars and still make millions of dollars in profit,” Fain said. “We are not the problem. The problem is corporate greed.
The strikes capped a day in which both sides complained that the other had not moved sufficiently from its initial positions.
In addition to general wage increases, the union is calling for the reinstatement of cost-of-living wage increases, an end to different wage levels for factory jobs, a 32-hour week with 40 hours of pay, the reinstatement of traditional defined benefit benefits. pensions for new hires who now only benefit from 401(k) retirement plans, pension increases for retirees and other items.
Starting in 2007, workers waived cost-of-living increases and defined-benefit pensions for new hires. Wage tiers were created as the UAW attempted to help businesses avoid financial distress before and during the Great Recession. Despite this, only Ford avoided government-funded bankruptcy protection.
Many say it’s time to take back the concessions because companies are making huge profits and CEOs are raking in millions. They also want to make sure the union represents workers at the joint venture electric vehicle battery factories the companies are building so workers have jobs making the vehicles of the future.
Workers at large assembly plants earn about $32 an hour, plus large annual profit-sharing checks. Ford said the average annual salary, including overtime and bonuses, was $78,000 last year.
The striking Ford plant employs about 3,300 workers and makes Bronco SUVs and Ranger midsize pickups. The Toledo Jeep complex has about 5,800 workers and manufactures the Jeep Wrangler SUV and Gladiator pickup. GM’s Wentzville plant has about 3,600 workers and makes the GMC Canyon and Chevrolet Colorado midsize pickup trucks, as well as the GMC Savana and Chevrolet Express full-size vans.
The union did not go after the big corporate cash cows of full-size pickup trucks and large SUVs, and instead turned its attention to factories that make vehicles with lower profit margins, Marick said Masters, professor of business at Wayne State University in Washington. Detroit.
“They want to give businesses some space without putting them up against the wall,” Masters said. “They don’t put them directly in the corner. You put an animal in a corner and it’s dangerous.
Automakers say they are facing unprecedented demands as they develop and build new electric vehicles while making gas-powered cars, SUVs and trucks to pay their bills. They fear that labor costs will rise so much that they will have to sell their cars at a higher price than foreign automakers sell in U.S. factories.
GM CEO Mary Barra told workers in a letter Thursday that the company is offering historic wage increases and new vehicle commitments at U.S. factories. GM’s offer, she wrote, “addresses what you have told us is most important to you, despite the fiery rhetoric from UAW leadership.”
On CNBC Thursday, Ford CEO Farley said that if Ford had agreed to the union’s demands, the company would have lost $15 billion over the past decade and gone bankrupt.
Under the UAW’s strategy, striking workers would live on $500 a week in strike pay from the union, while others would remain on the job on full pay. Companies are unlikely to exclude remaining workers from their factories because they want to continue building vehicles.
It’s hard to say how long it will be before strikes reduce inventory at dealerships and begin to hurt companies’ bottom lines.
Jeff Schuster, head of automotive for research firm Global Data, said Stellantis has the largest inventory and could hold on longer. The company has enough vehicles at or en route to dealerships to last 75 days. Ford has a 62-day supply and GM has a 51-day supply.
Schuster nevertheless predicted that strikes could last longer than previous work stoppages, such as the 40-day strike against GM in 2019.
“In this case, it feels like there’s a lot more risk here on both sides,” he said.