Auto strikes

US auto workers target Detroit Three with first simultaneous strike

US auto workers target Detroit Three with first simultaneous strike
A sign seen during a strike by members of the United Auto Workers union (UAW) outside of the Ford Michigan Assembly Plant in Wayne, Michigan, USA, 15 September, 2023. UAW members walked off the job as part of a strike called in response to failed contract negotiations with the Big Three automakers - General Motors, Ford and Stellantis, the parent company of Jeep and Chrysler. The union has called the strike on all three of the auto makers at the same time for the first time in history. EPA-EFE/MIKE MULHOLLAND

DETROIT, Sept 15 (Reuters) - The United Auto Workers union launched simultaneous strikes at three factories owned by General Motors, Ford and Chrysler owner Stellantis on Friday, kicking off the most ambitious US industrial labor action in decades.

The walkouts at the Detroit Three will halt production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck, along with other popular 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 walkouts cap 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 standoff has become a political issue, with President Joe Biden, facing re-election next year, calling for a deal.

The strikes involving a combined 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’ STLAM.MI Jeep brand in Toledo, Ohio. They are critical to the production of some of the automakers’ most profitable vehicles.

Fain’s decision to go with targeted walkouts could limit the cost to the union of strike pay. The UAW has a $825 million strike fund, which pales in comparison to billions in liquidity 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 its Jeep plant in Toledo could cut revenue by more than $380 million, based on data from Stellantis’ financial reports.

“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.

Fiorani estimated the limited action would stop production of about 24,000 vehicles a week. And while it targets some key brands, buyers would be willing to wait, for now.

In Wayne, Michigan, hundreds of people, including auto workers on the night shift and their supporters, gathered at a Ford assembly plant as the strike began.

Stellantis shares fell more than 1% in early trading, among the worst performers on the euro-zone STOXX50 .STOXX50 index. Ford shares were down 2.3% and GM was off 1.7% in early premarket trading in New York in thin volumes.



The union has said it wants a 40% raise. The companies 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 US 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.

Stellantis said it had immediately gone into “contingency mode” and would take all appropriate structural decisions to protect the company and its North American operations, without elaborating.

Fain said earlier this week that Stellantis had proposed shutting as many as 18 US facilities.

GM said it was disappointed by the walkout, and would continue to “bargain in good faith.”

Ahead of Fain’s address, GM’s top manufacturing executive Gerald Johnson said in a video that the UAW’s wage and benefits proposals would cost the automaker $100 billion, “more than twice the value of all of General Motors and absolutely impossible to absorb.” He did not detail how the union proposals would result in that cost, or over what time frame.

Fain has rejected the automakers’ assertions that union demands would cost too much, saying the companies have spent billions on share buybacks and executive salaries.

Suppliers and other industries that depend on automakers and their workers could see demand and cash dry up if the UAW shuts down Detroit Three’s US manufacturing operations.

Biden is pouring billions in federal subsidies into expanding sales of electric vehicles. But the shift to EVs could threaten UAW combustion powertrain jobs. The union has not endorsed Biden’s re-election.

“I think the Biden administration just continues to watch this slow-moving car crash as its EV strategy collides head on with unions,” Wedbush analyst Dan Ives said.

UAW President Fain has taken an unorthodox approach to the negotiations, bargaining with all three Detroit automakers simultaneously. Past UAW leaders chose one company to set a contract pattern for the other two. Fain has played the companies against each other, seeking to drive up their offers.

While a deal with one or more of the automakers could come at any time, the disruption is an opportunity for non-union automakers in the United States, including Tesla, Toyota 7203.T, Honda 7267.T and Mercedes MBGn.DE.

Those non-union factories, plus imported vehicles, account for more than half of the vehicles sold in the US market.

A full strike would hit earnings by about $400 million to $500 million at each affected automaker per week of lost production, Deutsche Bank estimates. Some of those losses could be recouped by later boosting production schedules, but that possibility fades as a strike extends to weeks or months.

By Joseph White and David Shepardson

(Reporting by Joseph White in Detroit, David Shepardson in Washington, Peter Henderson in San Francisco and Mehr Bedi in Bengaluru; editing by Jamie Freed and Alexander Smith)


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