DETROIT – The United Auto Workers union says it will go on strike at three vehicle assembly plants as it presses Detroit companies to come up with better wage and benefit offers.
The factories include a General Motors assembly plant in Wentzville, Missouri; a Ford factory in Wayne, Michigan, near Detroit; and a Stellantis Jeep plant in Toledo, Ohio. Only assembly and paint shop workers will walk out at the Ford plant.
Contracts between 146,000 auto workers and the companies are set to expire at 11:59 p.m. Thursday. Workers will stay on the job at all other plants.
“Time is of the essence,” union President Shawn Fain told workers late Thursday in an online address less than two hours before the deadline.
Despite increased offers from Ford and GM, it appears that no deals will be reached before the contacts expire.
Fain said for the first time in the union’s 88-year history, the UAW will strike at all three companies at the same time. He said union bargainers have been working hard but have been firm in trying to reach fair deals.
About 13,000 workers at the three plants are preparing to walk off the job after contracts with the Detroit Three expire at 11:59 p.m.
Fain has said more walkouts could be scheduled if companies don't move on bargaining. The companies, he said have made billions in profits during the past decade and can afford to pay workers more to make up for concessions made starting in 2007 to help the automakers in tough times. He says labor costs are only 4% to 5% of a vehicle's cost.
“They could double our raises and not raise car prices and still make millions of dollars in profits,” Fain said. “We’re not the problem. Corporate greed is the problem.”
The union has a list of demands including 36% pay raises over four years, cost of living raises, and an end to different tiers of wages for workers. Ford and GM are offering 20% during the next contract while the last known offer from Stellantis, formerly Fiat Chrysler, was 17.5%.
The companies say the union hasn't responded to their latest offers and have called union demands unreasonable. They fear taking on increased costs at a time when they have to spend billions to develop and build new electric vehicles, while also making automobiles with internal combustion engines.
The Ford plant that's targeted employs about 3,300 workers who will strike, and it makes Bronco SUVs and Ranger midsize pickup trucks.
The Toledo Jeep complex has about 5,800 workers and manufactures the Jeep Wrangler SUV and Gladiator pickup.
GM's Wentzville plant has about 3,600 workers and makes the GMC Canyon and Chevrolet Colorado midsize pickups, as well as the GMC Savana and Chevrolet Express full-size vans.
The union didn't go after the companies' big cash cows, which are full-size pickup trucks and big SUVs, and went more for plants that make vehicles with lower profit margins, said Marick Masters, a business professor at Wayne State University in Detroit.
“They want to give the companies some space without putting them up against the wall,” Masters said. “They're not putting them right into the corner. You put an animal in the corner and it's dangerous."
Masters said the companies are going to have to raise their wage offers in order to reach an agreement and address the issue of wage tiers and how to convert temporary workers to full-time jobs.
In a statement late Thursday, Ford said the union responded to the company's latest “historically generous” offer by showing little movement from its initial demands.
“If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor,” the statement said.
On CNBC Thursday, Ford CEO Jim Farley said if Ford had agreed to the union’s demands, it would have lost $15 billion during the last decade and gone bankrupt.
The announcement and looming strikes capped a day of both sides griping that the other had not budged enough from their initial positions. But talks continued on Thursday with GM increasing its wage offer and Ford looking for a counteroffer from the union.
The chasm between the two sides could be a shock to a U.S. economy already under strain from elevated inflation. It’s also a test of President Joe Biden’s treasured assertion that he’s the most pro-union president in U.S. history.
In a video released Thursday night, GM manufacturing chief Gerald Johnson said the union initially presented over 1,000 demands that he said would cost more than $100 billion. “That’s unreasonable,” Johnson said. “It’s more than twice the value of all of General Motors and absolutely impossible to absorb and still compete in today’s automotive market.”
If there’s no deal by the end of Thursday, Fain said union officials will not bargain on Friday and instead will join workers on picket lines.
The UAW started out demanding 40% raises over the life of a four-year contract, or 46% when compounded annually. Initial offers from the companies fell far short of those figures.
In addition to cost-of-living pay raises and an end to varying tiers of wages for factory jobs, it wants a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, pension increases for retirees and other items.
The companies have upped their initial wage offers, with Ford and GM now at 20%, and GM offering 10% in the first year. Stellantis has made another offer following its last known offer of 17.5%.
“We know a strong GM is important to all of us,” GM CEO Mary Barra wrote in a letter to workers Thursday. “We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight.”