DETROIT (AP) — About 13,000 U.S. auto workers stopped producing vehicles and went on strike Friday after their leaders failed to close a wide gap between union demands in collective bargaining and what Detroit’s three automakers are willing to pay .
Members of the United Auto Workers union began picketing a General Motors assembly plant in Wentzville, Missouri, a Ford plant in Wayne, Michigan, near Detroit, and a Stellantis Jeep plant in Toledo, Ohio.
It was the first time in the union’s 88-year history that it left all three companies at the same time, as four-year contracts with the companies expired at 11:59 p.m. Thursday.
The strikes will likely determine the future of the union and America’s domestic auto industry at a time when U.S. workers are asserting their power and companies face a historic transition from building internal combustion engines to making electric vehicles.
If they last long, dealers could run out of vehicles and prices could rise. The strike could even be a factor in next year’s presidential election as it tests Joe Biden’s proud claim to be the most pro-union president in American history.
“Workers around the world are watching this,” said Liz Shuler, president of the AFL-CIO, a coalition of 60 unions with 12.5 million members.
The strike is very different from previous UAW negotiations. Instead of committing to one company, the union, led by its combative new president Shawn Fain, strikes at all three. But not all of the UAW’s 146,000 corporate plant members are picketing, at least not yet.
Instead, the UAW targeted a handful of factories to pressure company negotiators to increase their offers, which were well below union demands of 36% wage increases over four years. GM and Ford offered 20% and Stellantis, formerly Fiat Chrysler, offered 17.5%.
Even Fain called the union’s demands bold, but maintains that automakers are raking in billions and can afford them. He scoffed at companies’ statements that costly settlements would force them to raise vehicle prices, saying labor costs accounted for only 4% to 5% of vehicle costs.
“You could double our increases without increasing car prices and still make millions of dollars in profits,” Fain said. “We are not the problem. Corporate greed is the problem.”
In addition to general wage increases, the union is calling for the reinstatement of cost-of-living increases, an end to differential pay scales for factory jobs, a 32-hour work week with 40 hours of pay, and the restoration of traditional defined benefit pensions for new hires, who now only have 401(k) pension plans ) style received, pension increases for retirees and other items.
Starting in 2007, employees foregone cost-of-living increases and defined benefit pensions for new hires. The pay scales were introduced as the UAW sought to help companies avoid financial hardship before and during the Great Recession. Yet only Ford escaped state-funded bankruptcy protection.
Many say it’s time to win back the concessions because companies are making huge profits and CEOs are raking in millions. They also want to ensure that the union represents workers at joint-venture electric vehicle battery factories that the companies are building, so that workers have jobs making vehicles of the future.
Top assembly plant workers earn about $32 an hour, plus large annual profit-sharing checks. According to Ford, the average annual wage including overtime and bonuses was $78,000 last year.
Outside the Ford plant in suburban Detroit, 35-year-old worker Britney Johnson worked for the company for about three and a half years, enabling it to achieve top union wages. “I like the job. We just deserve more,” she said.
She calls for higher wages, the return of pensions, an increase in the cost of living and the abolition of different wage levels.
Johnson said this was her first strike, but she had been preparing for it for months and had money set aside. “This is not fun. There are a lot of people who aren’t getting paid,” she said. She expects the strike to last a few weeks.
“We’re the ones who have kind of hoped for the last 20 years that things would change and that we would get back some of what we lost in bankruptcy,” said Tommy Wolikow, who puts parts on an assembly line at GM supplies pickup truck plant in Flint, Michigan, which still produces vehicles. “And with every contract it seemed like we didn’t get what we deserved.”
Wolikow called this year’s talks huge and said meeting the company in the middle wasn’t good enough. “I think it needs to be a little bit closer to the top of what was asked for,” he said.
But automakers say they face unprecedented capital demands as they develop and build new electric vehicles while making gasoline-powered cars, SUVs and trucks to pay the bills. They fear labor costs will rise so much that they will have to sell their cars at higher prices than those sold by foreign automakers with U.S. factories.
GM CEO Mary Barra told workers in a letter Thursday that the company is offering historic wage increases and commitments to new vehicles at U.S. factories. She wrote: “GM’s offer addresses what you have told us is most important to you, despite the heated rhetoric from UAW leadership.”
The limited strikes will help preserve the union’s $825 million strike fund, which would be depleted in about 11 weeks if all 146,000 workers went on strike.
Under the UAW strategy, striking workers would live on $500 a week in strike pay from the union, while others would remain on the job at full pay. It’s unlikely that companies would lock the remaining workers out of their factories because they want to continue building vehicles.
But Fain said the union will increase the number of striking companies if it doesn’t get fair deals from companies.
It’s hard to say how long it will take for the strikes to deplete dealer inventories and hit companies’ profits.
Jeff Schuster, head of automotive at research firm Global Data, said Stellantis has the largest inventory and can last longer. The company has enough vehicles at or en route to dealers to last 75 days. Ford has a 62-day supply and GM has 51. Everyone built as many highly profitable pickup trucks and large SUVs as they could.
Still, Schuster predicted the strikes could last longer than previous labor stoppages, such as a strike against GM in 2019 that lasted 40 days.
“This case feels like there’s a lot more at risk here on both sides,” he said.
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