Detroit’s Big Three automakers failed to reach a new labor agreement before their contract with employees represented by the United Auto Workers expired at midnight Thursday, triggering one of the largest strikes to hit the U.S. in years.
UAW President Shawn Fain said in a Facebook Live address late Thursday that employees at three factories for Ford, General Motors and Stellantis would immediately walk off the job. The factories include a GM assembly plant in Wentzville, Missouri; a Ford assembly plant in Wayne, Michigan; and a Stellantis assembly complex in Toledo, Ohio.
“Tonight, for the first time in our history, we will strike all three of the Big Three at once,” he said.
Roughly 12,700 employees at those facilities will participate in the labor actions. While on strike, they will be paid about $500 a week from UAW’s $825 million strike fund, according to The Associated Press.
“The locals that are not yet called to join the stand-up strike will continue working under an expired agreement,” Fain said, while warning that workers at other plants may walk out if further talks with the automakers bog down.
The work stoppage marks the first strike at the Detroit-based automakers since workers walked out on GM in 2019.
“We will show our strength and unity on the first day of this historic action,” Fain said. “All options remain on the table.”
Britney Johnson, 35, who has worked for the company about 3 1/2 years, joined about 400 workers on the picket line outside the Ford’s Wayne plant in suburban Detroit. A mass rally was scheduled for Friday afternoon in downtown Detroit.
“I like the job,” she said. “It’s just that we deserve more.”
At the Toledo Jeep plant, assembly line worker Candace Bowles, 52, cleaned up her workstation and walked out when the midnight bell rang. “I’m really happy that everyone stood together,” she said.
Strategically, targeting only three plants will give the UAW flexibility in potentially stopping work at other facilities when union officials resume negotiations with the automakers. It will also preserve the the labor group’s strike fund, according to Benjamin Salisbury, an automotive industry analyst at Height Securities.
Why the UAW is on strike
The UAW’s demands include a 36% pay increase across a four-year contract; pension benefits for all employees; limited use of temporary workers; more paid time off, including a four-day workweek; and more job protections, including the right to strike over plant closings.
With talks at an impasse on Thursday, leaders at Ford, General Motors and Stellantis (formerly Fiat Chrysler) said they had made multiple offers to the UAW in recent weeks in hopes of inking a new deal for the union’s 145,000 workers.
“I think they’re preparing for a historic strike with all three companies,” Ford CEO Jim Farley told CBS News earlier Thursday.
Said Ford in a later statement, “At 8 p.m. this evening at Solidarity House in Detroit, the United Auto Workers presented its first substantive counterproposal to Ford a few hours from the expiration of the current four-year collective bargain agreement.”
What the automakers say
In response to the strike order, Stellantis said it was “extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers. We immediately put the company in contingency mode and will take all the appropriate structural decisions to protect our North American operations and the company.”
Stellantis, which was formed under a 2021 merger between Fiat Chrysler and European automaker Groupe PSA, owns Chrysler, Dodge, Jeep and RAM, along with major foreign car brands including Citroën, Peugeot and Maserati.
GM CEO Mary Barra told CBS News on Friday that the car giant negotiated with the UAW in good faith in hopes of averting a strike.
“We’ve been at the table since July 18,” Barra said, adding that GM initially received over 1,000 demands from the labor group. “We have a historic offer on the table, and we’re at the table right now ready to keep going.”
All Big Three leaders said they’ve made reasonable counteroffers and are willing to negotiate further. The automakers emphasize that they face pressure to keep costs and car prices low in order to compete with Tesla and foreign car makers, especially as the companies compete for a stake in the rapidly growing electric vehicle market.
Barra said GM cannot meet all of the the UAW’s wage demands because of the need to invest aggressively on developing new products, particularly electric vehicles.
“We have to make sure the company is going to succeed for the next 115 years and that means we need to invest,” she said. “If we don’t invest and have new products that customers want to buy, that impacts the number of vehicles we build, which directly impacts how many people are part of our manufacturing team.”
“What their initial offer was, is to pay our hourly workers about $300,000 each, and to work four days,” Farley said on Thursday of the UAW’s demands. “That would basically put our company out of business.”
Fain acknowledged that the automakers had upped their wage offers, but the proposals remain inadequate, he said. Ford has offered 20% over 4.5 years, while GM and Stellantis offered 18% and 17.5% over four years, respectively.
The strike could disrupt the domestic auto industry, cause car prices to rise, and lead to nearly $6 billion in losses in wages and earnings, while reducing overall U.S. economic growth by as much as 0.3%, analysts warn.
“If the strike lasts longer than three to four weeks, it will be moderately detrimental to GM and Ford’s EV strategy in 2024. … While the Detroit stalwarts battle with the UAW, there’s a bottle of champagne that’s being iced at Tesla headquarters,” Wedbush Securities analyst Dan Ives said in a report.
“Record profits have not been shared fairly”
President Joe Biden on Friday dispatched two of his top aides to Detroit to help resolvethe strike by unionized autoworkers, expressing sympathy for the union by suggesting that the Big Three automakers have seen record profits but that “those record profits have not been shared fairly” with workers.
“No one wants to strike,” the Democratic president said in brief remarks at the White House. “But I respect workers’ right to use their options under the collective bargaining system and I understand the workers’ frustration.”
Biden said he is sending Acting Labor Secretary Julie Su and senior aide Gene Sperling to Detroit to help reach a “win-win” contract for the companies and their employees.
Biden said he called during the first day of negotiations and encouraged both sides to stay at the table as long as possible.
“The companies have made some significant offers,” Biden said. “But I believe they should go further to ensure record corporate profits mean record contracts for the UAW.”
—The Associated Press contributed to this report