United Auto Workers could strike at a small number of plants if they fail to reach deals with automakers: sources

DETROIT — Leaders of the United Auto Workers union are considering targeted strikes at a small number of plants run by each of Detroit’s three automakers if they fail to reach contract agreements by a Thursday evening deadline.

Union leaders discussed small-scale strikes at a meeting Friday, and local union leaders were briefed on the strategy Tuesday afternoon, two people with knowledge of the strategy said.

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People did not want to be identified because they were not authorized to release details until President Shawn Fain briefed workers Wednesday afternoon during a Facebook Live appearance.

At Tuesday’s meeting, Fain did not specify whether the union would target vehicle assembly plants or component plants, one of the people present said. Strikes at parts factories could lead to production shutdowns at several assembly plants. He also did not specify how many workers would walk out.

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The UAW declined to comment.

Strikes at individual plants would be much cheaper for the union, which would have to pay $500 a week to each of its 146,000 members if it struck General Motors, Stellantis and Ford simultaneously. In that case, the union’s $825 million strike fund would be exhausted in just under three months, not including the union’s health insurance payments.

This strategy comes as the pace of negotiations with the three automakers accelerates, less than two days before the expiration of contracts with the union, Thursday at 11:59 p.m.

Both parties exchange offers and negotiate for long hours. But they still seem far apart in terms of salaries and benefits.

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The union and companies said they were ready to talk to reach an agreement before the deadline. Still, Fain said last week that he threw the companies’ counteroffers in the trash and he accused the companies of being slow to offer salaries and benefits.

Still, both sides were optimistic that agreements could be reached before the deadline.

Ford CEO Jim Farley said Tuesday evening that the company had submitted a new offer to the union that “is our most generous offer in 80 years of UAW and Ford.”

The package includes salary increases, eliminates different salary levels, provides protection against inflation and makes higher contributions to pension plans. “It’s a significant, significant improvement,” he said. “I remain optimistic that a deal can be reached, but there is a limit.”

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Farley ruled out a union demand for a 32-hour work week for 40 hours of pay, but said it was still possible to avoid a strike.

GM Chairman Mark Reuss said Tuesday that much progress has been made in recent days. “The give and take is really happening, so we’re on the right track, it’s part of the process,” he said at an industry gathering in Detroit hosted by trade publication Automotive News.

Reuss said GM’s goal is to reward employees while investing in the future.

Fain, asked on Labor Day about targeted strikes, said everything was on the table. “We’ve come up with a lot of different strategies. But it will really depend on where we are on September 14. That will dictate how we respond.”

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If the union strikes against all three automakers at the same time, it would be a first in the union’s more than 80-year history, said Nelson Lichtenstein, a history professor at the University of California, Santa Barbara. , who studied the question.

The union will likely strike at factories that make components for pickup trucks and large SUVs, which are the companies’ main profit centers, said Marick Masters, a business professor at Wayne State University in Detroit.

“They are trying to impose difficulties on companies and exert increasing pressure to encourage them to make an offer which will be acceptable to the base and which goes further in satisfying the demands they have on the table,” he said.

It would make sense for the union to target the companies’ most popular and lucrative products, he said. “You would go after the components that would shut down as many production facilities as possible.”

This tactic would force companies to lay off workers at assembly plants, and the workers would receive unemployment benefits rather than money from the union’s strike fund, Masters said.

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The last known offers from GM and Ford were 10 percent raises over four years with lump sum annual payments in years when raises are not given. The last known offer from Stellantis, formerly Fiat Chrysler, was for increases of 14.5% over four years, with no lump sum for salaries. All three companies offered lump sums in other areas to cover inflation and a bonus for ratifying a contract.

In addition to general wage increases, the union is seeking to end different wage levels for factory jobs; a 32-hour week with 40 paid hours; the restoration of traditional defined benefit pensions for new recruits who now only benefit from 401(k)-type pension plans; and a return of cost-of-living pay increases, among other benefits.

Perhaps most important for the union is being able to represent workers at 10 electric vehicle battery factories, most of which are built by joint ventures between South Korean automakers and battery makers. The union wants these factories to receive top wages from the UAW. Part of the reason is that workers who now make components for internal combustion engines will need a place to work as the auto industry transitions to electric vehicles.

Automakers say they face huge capital expenditures to develop electric vehicles and prepare factories to make them, while continuing to make cars, trucks and SUVs with internal combustion engines.

The union, however, says the companies are extremely profitable and can afford to give big raises because labor makes up only a small percentage of the price of a car. The companies collectively reported $164 billion in net profit over the past decade, including $20 billion this year.