Automobile workers in the US under the aegis of United Auto Workers (UAW) union on Friday embarked on simultaneous strikes at three factories owned by General Motors, Ford and Chrysler parent Stellantis, kicking off what has been described as most ambitious U.S. industrial labour action in decades.
The industrial action at the Detroit Three will bring to a halt the production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck, along with other popular vehicle models.
“For the first time in our history we will strike all three of the Big Three,” UAW President Shawn Fain said, adding that the union will hold off more costly company-wide strikes for now, but all options are open if new contracts are not agreed.
Fain laid out plans for the walkouts on Facebook Live, less than two hours before the expiration of the old contract.
The action caps weeks of clashes between Fain and Detroit Three executives over union demands for a bigger share of profits generated by combustion trucks, and stronger job security as automakers shift to electric vehicles.
The executives have said the union’s demands would make the automakers uncompetitive against other non-union rivals.
GM CEO Mary Barra told CNBC on Friday that the automaker will keep negotiating, even though she was “frustrated and disappointed” with the strike, which she said would not be good for the industry.
President Joe Biden will address the strike later on Friday, the White House said.
The strikes involving an estimated 12,700 workers will take place at assembly plants operated by Ford (F.N) in Wayne, Michigan, GM (GM.N) in Wentzville, Missouri and Stellantis’ Jeep brand in Toledo, Ohio.
They are critical to the production of some of the automakers’ most profitable vehicles.
“This is more of a symbolic strike than an actual damaging one,” said Sam Fiorani, a production forecaster at Auto Forecast Solutions, who added that he had expected more in the first wave of the strike.
“If the negotiations don’t go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two,” he said.
Targeted walkouts could limit the cost of strike pay to the UAW, which has a $825 million strike fund. This pales in comparison to billions the automakers have built up, thanks to robust profits from the trucks and SUVs UAW members build.
Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data. But a week-long shutdown at the Toledo Jeep plant could cut revenue by more than $380 million, based on Stellantis financial reports.
Fiorani estimated the limited action would stop production of about 24,000 vehicles a week.
The UAW has said it wants a 40% raise, while the automakers have offered up to 20%, but without key benefits demanded by the union. None of the Detroit Three has proposed eliminating tiered wage systems that require new hires to stay on the job for eight years to earn the same as veteran workers – a key UAW demand.
Ford said the UAW’s latest proposals would double its U.S. labor costs and make it uncompetitive against Tesla (TSLA.O) and other non-union rivals.
A walkout could mean that UAW profit-sharing checks for this year would be “decimated,” it said.
