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UAW to Expand Strike Against GM and Stellantis While Sparing Ford

2023-09-23 03:19
The United Auto Workers’ unprecedented strategy to simultaneously target all three legacy carmakers is showing results. The union
UAW to Expand Strike Against GM and Stellantis While Sparing Ford

The United Auto Workers’ unprecedented strategy to simultaneously target all three legacy carmakers is showing results.

The union said that it clinched key concessions from Ford Motor Co. and would spare the company more pain even as it expanded the strike to 38 additional facilities run by rivals General Motors Co. and Stellantis NV as of midday Friday.

That carrot-and-stick approach could give it more leverage than in the past when it singled out one automaker and used that deal to pattern agreements with the other two companies. The fresh tactics are a hallmark of new UAW President Shawn Fain, who has kept carmakers guessing as he seeks to break from the legacy of predecessors tainted by corruption.

Fain expanded a week-old walkout to all GM and Stellantis parts plants in the US, adding 5,600 more workers to a labor action that already has 13,000 union members on the picket line from three assembly plants in Michigan, Ohio, and Missouri. The union will maintain its strike of a Ford SUV plant in Michigan but won’t escalate it.

“We will shut down part distribution until those two companies come to their senses and come to the table with a serious offer,” the UAW leader said. “Stellantis and GM in particular are gonna need some serious pushing.”

GM and Stellantis pushed back. In separate statements Friday, they questioned the union’s interest in a quick resolution of the dispute but promised to continue talks.

“Today’s strike escalation by the UAW’s top leadership is unnecessary,” GM’s statement said. “We have contingency plans for various scenarios and are prepared to do what is best for our business, our customers, and our dealers.”

By going after the parts plants, the union walkout will likely impact car owners and repair shops in need of replacement parts. Fain, who also invited President Joe Biden to visit striking workers, has pointed to polls showing public support for the strike is high. But that public approval may be tested if a scarcity of replacement parts keeps cars off the road.

“It certainly seems like the union is getting a lot of leverage through this strategy right now,” said Georgetown University labor law professor Brishen Rogers. “The ultimate question is going to be, if this goes on for weeks and weeks, what sort of things the companies are going to do to push back and whether the union will be able to maintain solidarity and keep the strike going.”

Fain said talks with Ford have seen “some real progress” but that they are still not done. He applauded the automaker for officially reinstating a cost of living allowance suspended in 2009, a top priority for the union’s 146,000 auto workers.

Ford pared a gain of as much as 4.6% to trade up 2.4% as of 2:38 p.m. in New York. GM fell 0.5% to $32.54 and shares of Stellantis were almost unchanged at $19.36. Ford and GM have underperformed the S&P 500 Index’s 13% gain this year while shares of Stellantis, which owns the Jeep and Ram brands, have risen 36%.

Dearborn, Michigan-based Ford agreed to raise pay at components plants on par with assembly workers, the immediate conversion to full-time status for all temporary workers, and profit sharing for them after 90 days. In addition, the UAW won the right to strike over plant closures during the four-year contract, which Fain called “an important victory in our fight to save our jobs.”

Ford welcomed the olive branch from the union’s leadership, but noted more needs to be resolved before a deal is in hand.

“Although we are making progress in some areas, we still have significant gaps to close on the key economic issues,” the company said in a statement after Fain’s address. “The issues are interconnected and must work within an overall agreement that supports our mutual success.”

Ford’s Edge

Ford has shown signs of eagerness to reach a deal ahead of its automaking rivals. But that goodwill gambit may come at a significant price.

Colin Langan, an analyst at Wells Fargo, wrote in a research note that Ford’s “concessions raise concern that the contract will be costly.” He also noted that the wage inflation stemming from a deal with the UAW could spread beyond the three major Detroit automakers.

In Washington, Biden administration officials spoke to all parties involved in the strike on Friday, according to White House press secretary Karine Jean-Pierre. “We are going to help and assist in any way that they feel necessary,” she told reporters.

While Ford’s labor costs are about $1 billion higher than GM and Stellantis because it has more US workers, Ford’s low percentage of temporary staff could give it an edge. With temps representing just 2% to 3% of Ford’s workforce, it’s easier and cheaper for the automaker to convert those workers to permanent status than it would be for GM and Stellantis, which have more than twice as many temps.

“Ford is going to get a settlement in all likelihood, and then there’s going to be a fight to get that settlement to be the pattern for the other two,” said Larry Cohen, former president of the Communications Workers of America and current chair of the advocacy group Our Revolution. “Do they want to help figure out that pattern now, or do they want to have a much bigger fight?”

Neither GM nor Stellantis has agreed to add cost-of-living-allowances. GM and the union have a fundamental disagreement about the COLA issue, said a person familiar with talks. GM wants to offer inflation protection mostly through higher wages. The union wants a big raise, but also to include a COLA formula that lifts wages in line with the rate of of inflation, even if it’s low.

Illinois Jeep Plant

The union’s demand for the right to strike over plant closures has been a sharp point of contention in Stellantis’ negotiations. Mark Stewart, the chief operating officer of North America, said last weekend after the strike began that the company wants to be able to “make the decision on product allocation and where it goes.”

Read more: Stellantis CEO Won’t Rule Out More Job Cuts as EV Shift Bites

Stellantis had put forth a proposal that could lead to the closure of 18 facilities, including 10 parts and distribution centers. Stewart said no jobs would be eliminated in the consolidation of parts centers and that the move was needed to install new technology. But the union has balked at the disruption these moves could cause. The carmaker also floated turning an idled Jeep plant in Belvidere, Illinois, into an Amazon.com-like hub for parts distribution, according to a person familiar with the matter.

The UAW leadership “seem more concerned about pursuing their own political agendas than negotiating in the best interests of our employees and the sustainability of our US operations given the market’s fierce competition,” Stellantis said in its emailed statement.

The company, formed from the merger of Fiat Chrysler and France’s PSA Group in 2021, said it made a sixth offer to the UAW Thursday. That included a “long-term solution” for its idled Jeep plant in Belvidere and “a significant product allocation that allows for workforce stability through the end of the contract,” it said.

--With assistance from Jordan Fabian.

(Updates GM, Stellantis statements from sixth paragraph; Adds White House spokeswoman comment.)

Author: Gabrielle Coppola, David Welch, Keith Naughton and Josh Eidelson