The United Auto Workers union (UAW) has started simultaneous strikes at three assembly plants owned by the “Detroit Three” automakers – Ford, General Motors (GM) and Stellantis – on Friday morning, in what is seen as the most ambitious U.S. industrial labor action in decades.
The strikes, which involve about 12,700 workers, will affect the production of some of the most popular and profitable vehicles in the U.S. market, such as the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck.
UAW President Shawn Fain announced the walkouts in a Facebook Live address shortly before the expiration of the old contract at midnight. He said the union will hold off on more costly company-wide strikes for now, but warned that all options are open if new contracts are not agreed soon.
“For the first time in our history we will strike all three of the Big Three,” Fain said.
The union is demanding a 40% raise for its members, as well as stronger job security and benefits as the automakers shift to electric vehicles. The companies have offered up to 20%, but without meeting the union’s key demands. None of them has agreed to eliminate the tiered wage system that requires new hires to work for eight years to earn the same as veteran workers.
The companies have also argued that the union’s proposals would make them uncompetitive against non-union rivals like Tesla, and jeopardize their future investments in electric vehicles. They have warned that a prolonged strike could hurt their revenues and profits, as well as the workers’ profit-sharing checks.
Stellantis said it had immediately activated its contingency plan to protect its North American operations, and would take all of the appropriate decisions to safeguard the company. Fain said earlier this week that Stellantis had proposed shutting down as many as 18 U.S. facilities.
Ford and GM said they were disappointed by the union’s decision to strike, and would continue to bargain in good faith. GM’s top manufacturing executive Gerald Johnson said in a video that the union’s proposals would cost the company $100 billion, which he called “absolutely impossible to absorb.”
Fain dismissed the companies’ claims as “scare tactics” and said they have spent billions on share buybacks and executive salaries. He said the workers deserve a fair share of the profits they have generated by building combustion trucks and SUVs.
The strikes are expected to stop production of about 24,000 vehicles a week, according to Sam Fiorani, a production forecaster at Auto Forecast Solutions. He said the strikes are more symbolic than damaging at this point, but could escalate if negotiations do not progress.
“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 added that while some of the models affected by the strikes are in high demand, such as the Bronco, buyers would be willing to wait for now. He said Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime.
U.S. auto workers launch first simultaneous strike at Detroit Three