DETROIT – The UAW’s historic strike against Detroit’s Big Three automakers began Friday and continued through the weekend.
The union officially declared a strike on Friday, Sept. 15, after its contracts with Ford Motor Company, General Motors, and Stellantis expired at 11:59 p.m. on Sept. 14.
The parties began negotiating in July, but UAW President Shawn Fain said the bargaining process moved slowly with automakers allegedly waiting “until the last eight days” to start talking.” Fain threatened to strike at any of the three companies that didn’t make a deal by the contract deadline.
The union began its strike by striking at a limited number of plants. The UAW is calling this a “stand up strike,” and defines it as “a strike that grows over time, giving our national negotiators maximum leverage and maximum flexibility to win a record contract.” A full strike is still possible, but the union will begin with these smaller strikes.
At midnight Thursday into Friday, workers at GM Wentzville Assembly, the Stellantis Toledo Assembly Complex, and the Ford Michigan Assembly Plant (final assembly and paint only) were asked to strike.
“These three units are being called to stand up and walk out on strike at midnight tonight,” Fain said.
The remaining UAW workers are being directed to continue working under an expired agreement. There will be no contract extension. There have been some layoffs in response to the strikes.
UAW responds to layoffs of non-striking workers
On Friday, Sept. 15, Ford Motor Company and General Motors both announced temporary layoffs of non-striking workers.
Ford announced temporary layoffs of around 600 employees from the Michigan Assembly Plant in Wayne. GM announced that it would be idling its Fairfax Assembly Plant in Kansas, which is expected to put around 2,000 people out of work.
On Saturday, Sept. 16, UAW President Shawn Fain released the following statement in response to the layoffs:
“Let’s be clear: if the Big Three decide to lay people off who aren’t on strike, that’s them trying to put the squeeze on our members to settle for less. With their record profits, they don’t have to lay off a single employee. In fact, they could double every autoworker’s pay, not raise car prices, and still rake in billions of dollars.
“Their plan won’t work. The UAW will make sure any worker laid off in the Big Three’s latest attack will not go without an income. We’ll organize one day longer than they can, and go the distance to win economic and social justice at the Big Three.”
What do we know about the negotiations so far?
The UAW and the Big Three were back at the bargaining table on Saturday, Sept. 16, and the UAW said it had “reasonably productive conversations” with Ford.
Negotiations between the UAW and GM resumed on Sunday, Sept. 17. Talks with Ford and Stellantis were expected to pick back up on Monday, Sept. 18.
Stellantis has since shared details about its most recent offer to the union. According to the Associated Press, the owner of Chrysler said its offer would provide cumulative raises of nearly 21% for hourly wages, with an immediate 10% increase if a contract is ratified. Stellantis’ Mark Stewart said the offer is part of a “really competitive” overall proposal.
There were also discussions related to reviving a plant in Belvidere, Illinois, that had already been idled. That offer was taken off the table after the deadline to avert a strike passed.
Why a strike was called
Tension had been rising between the UAW and the Big Three even before this year’s negotiations began.
New UAW President Shawn Fain was voted into office in March, and has since held a strong position in favor of better pay, benefits and work-life balance for autoworkers. He has maintained that “record profits” recorded by GM, Ford and Stellantis in recent years have not translated into better pay for employees.
The UAW calculates that the Big Three made a combined total of $21 billion in profit in the first half of 2023, and a combined $250 billion in American profits in the last 10 years. In comparison, Fain says employee wages have increased just 6% over the last four years.
Under Fain’s leadership, the union has taken a more aggressive approach to negotiations with the Big Three than it has in previous years. The union announced an extensive list of demands weeks ago, which includes a more than 40% wage increase, an end to tiered wages, cost of living adjustments, reinstated pensions, and more.
But despite both Fain and the automakers previously expressing a desire to bargain in good faith and reach a deal before the deadline, Fain claims the companies essentially waited “until the last eight days to start talking.” The UAW received a counter proposal from Ford at the beginning of September, and received offers from GM and Stellantis one week before the contract deadline.
“We’ve told all three of the companies up front, before this started, we weren’t going to do things the way we’ve always done them; that Sept. 14 is a deadline, not a reference point,” Fain said last week on CNBC. “... They chose to follow the same path they have in the past, which is delay, delay, delay.”
Earlier this month, the UAW filed unfair labor practice charges against Stellantis and GM, accusing them of intentionally delaying the bargaining process. Both automakers called the allegations surprising and untrue, but both promised to provide counter proposals after the allegations were made.
The UAW has since received counter offers from all three companies, but has turned each of them down. The proposals from Ford and GM, which offered 9% and 10% wage increases, respectively, were dismissed by Fain, who called them “insulting.” A previous proposal from Stellantis offered a 14.5% wage increase, which Fain called “inadequate.”
The latest proposals had Ford offering 20% over 4½ years, while GM was at 18% for four years and Stellantis was at 17.5%. Fain said all three companies’ offers on cost-of-living adjustments were deficient.
Last week, Fain said that understands he’ll have to lose out on some of the UAW’s aggressive demands in order to reach a deal -- but the offers made by the automakers so far have not been well-received by the union.
The UAW is mostly holding firm on its demands, and autoworkers already voted to authorize a strike if leaders decided to call one. Automakers did not appear likely to quickly give into the union’s demands, citing their significant and expensive investments into their transition to electric vehicles.
Potential impact of the strike
Unlike in previous years, UAW President Fain did not identify a target company for the quadrennial talks and a potential strike. Instead, he has threatened to strike at any of the Big Three that hasn’t reached a deal by this year’s contract deadline.
There are 146,000 autoworkers represented by the UAW across Ford, GM and Stellantis. Nearly all of the union’s autoworkers -- 97% -- voted to authorize a strike.
Here’s how many UAW-represented autoworkers are employed at each company:
- At Ford, there are more than 57,000 UAW workers.
- At GM, there are about 46,000 UAW workers.
- At Stellantis, there are about 43,000 UAW workers.
UAW workers could choose not to strike, but they would lose out on weekly pay and health benefits covered by the union. The union has about $825 million in its strike fund, so those on the picket line will get $500 per week during the strike. This weekly pay would be a pay cut for most employees, though it’s a larger amount than what was provided during the 2019 GM strike.
However, experts say those funds could run out quickly if workers are striking from all three companies at once.
When crunching the numbers for a 2023 strike, the Anderson Economic Group found that if members strike at all three automakers at once, the companies could lose a combined total of $989 million in earnings in a 10-day period. An estimated $856 million in direct wages would be lost.
Note: Both GM and Ford are clients of the consultancy firm.
Those numbers may sound high, but that’s the point of a strike: for it to be costly for the employers.
In addition to impacting the Big Three, experts argue the strike could have a ripple effect throughout the supply chain and other businesses. Beyond the auto industry, the strike could have a broader impact on the Midwest economy.
Jeff Rightmer, who teaches global supply chain management at Wayne State University, told Local 4 that if the strike lasts six weeks like the 2019 strike did, then the lower levels of the supply chain will likely be affected. While the bigger, stronger tier one suppliers would be able to “hold on longer,” he predicts that tier two and tier three suppliers, some of which are small businesses, would have to close their doors if the strike lasts a while.
Businesses like bars and restaurants that are near striking workplaces could also be affected, Rightmer said. The strike could also impact businesses that are contracted by the Big Three, but whose workers aren’t represented by the UAW.
Auto dealers may also take a hit from a halt in production amid a strike. Already low dealership inventories could drop even lower, meaning dealers could run out of product, and potentially charge even more for vehicles. Experts say dealers were already responsible for jacking up vehicle costs anywhere from 30%-60% during the pandemic.
What are the UAW’s demands?
The UAW is seeking better pay and benefits, a better work-life balance for autoworkers, and job security amid the automakers’ massive investment in electric vehicles. Workers are particularly concerned about what EV production means for their future, since the vehicles require less people to make them -- though those workers require more thorough training.
Here are the UAW’s demands, from the union’s website:
- Eliminate wage tiers.
- Secure substantial wage increases.
- Restore Cost of Living Adjustments (COLA).
- Defined benefit pension for all workers.
- Re-establish retiree medical benefits.
- Establish the right to strike over plant closures.
- Establish a job bank known as the working family protection program.
- Make all temporary workers permanent employees, and put strict limits on the future of temps.
- More paid time off to be with families.
- Significantly increase retiree pay.
A look at the UAW’s last Big Three strike
In 2019, about 48,000 workers struck from GM for six weeks. The automaker was selected as a target for negotiations and a potential strike, and the eventual deal struck between GM and the union was used to establish similar deals with Ford and then-Chrysler (which has since merged with the parent company of the Peugeot brand to form Stellantis).
The strike, which became the longest UAW strike since 1970, caused 34 plants to idle across several states.
Analysts estimated that GM lost about $2 billion in vehicle production over two fiscal quarters due to the strike, though GM’s estimate was higher. The company reported a net income of $2.3 billion in their third quarter of 2019, which was down 9% from a $2.5 billion net income in the same quarter in 2018.
The final agreement between the UAW and GM included an $11,000 signing bonus for each member, performance bonuses, two 3% annual raises, two 4% lump sum payments, and holding the line on health care costs. GM estimated that wage increases from that deal would cost the company an additional $100 million per year.
The 2019 contract also allowed GM to permanently shut down three plants that were designated for closure, including one in Warren.
The auto industry shifted significantly in the years that followed the 2019 strike, primarily due to unforeseen circumstances brought on by the COVID pandemic. Supply chain issues led to lower supply amid a high demand across the U.S. Automakers have since maintained that lower supply intentionally, through which they’re acquiring bigger profits.