The global supply of cars could be under threat after the United Automobile Workers union went on an unprecedented strike on Friday, the first time against all three Detroit automakers at the same time.
A collective bargaining agreement between UAW and the companies – General Motors, Ford Motor and Stellantis, the parent of Chrysler – could not be negotiated when the current contract expired at 11:59 PM on Thursday. This led to over 12,700 workers walking off the plants at the stroke of midnight.
UAW strikes 3 states
The strike targeted three different states. The GM plant in Wentzville, Missouri, employs 3,600 hourly workers, the Stellantis plant in Toledo, Ohio, 5,800, and there are 3,300 workers at Ford’s Michigan plant.
In the 88 years since it was founded, UAW has called strikes aimed at a single automaker, but this is the first time multiple companies have been targeted.
In a video streamed via Facebook on Thursday night, the union’s president, Shawn Fain, said: “For the first time in our history we will strike all three of the Big Three. We are using a new strategy. We are calling on select locals to stand up and go out on strike.”
The union, which has more than 150,000 members at the factories of the three companies, is demanding a 40 percent increase in wages over the next four years. They have also asked for cost-of-living adjustments that nudge wages higher in response to inflation, shorter working hours, improvements to pensions and health care, and job security measures. The union also wants the hourly wages to climb to $32 after eight years of service.
Union contracts for 150,000 @UAW members at the Big Three – Ford, General Motors, & Stellantis – expire 11:59 PM on Thursday. On Friday, our members at L376 in Windsor, CT & L422 in Mansfield, MA will be picketing whether on strike or “just practicing.” https://t.co/K8pEUU5Typ pic.twitter.com/y6TxrVzphn
— UAW Region 9A (@UAWRegion9A) September 13, 2023
The companies have offered up to 20 percent hike in wages, but without most of the key benefits demanded by the union.
In a statement, Ford said the UAW’s latest proposals would double its US labour costs, and make it uncompetitive against Tesla and other non-union rivals.
Gerald Johnson, one of GM’s top manufacturing executive said that the UAW’s proposals would cost the company $100 billion, which would be “more than twice the value of all of General Motors and absolutely impossible to absorb”.
The union has countered the carmakers’ argument by saying the companies have spent billions on share buybacks and executive salaries.
US President Joe Biden held talks with all involved parties, and without taking any particular side, he has urged them to keep talking and work out a solution as soon as possible. The standoff could become a key political issue as Biden faces re-election next year.
A full strike would hit earnings by about $400 million to $500 million at each affected automaker per week of lost production, Deutsche Bank has estimated.
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