Auto workers walked off the job Friday at three factories producing some of Detroit carmakers’ most popular vehicles, setting off a lengthy strike that could hurt the U.S. economy and impact the 2024 presidential election.
About 13,000 members of the United Auto Workers at plants in Ohio, Michigan and Missouri joined Friday morning in what the union described as a targeted strike that could spread to more plants if wages are raised by as much as 40 percent. And no other benefits were demanded. meet.
The union’s four-year contract with three automakers – General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram, expired Thursday, and the companies and union remained far from reaching new deals.
UAW President Shawn Fenn used broad language Thursday to explain why his members were going on strike against all three automakers at the same time — something the union has never done in its nearly 90-year history. did.
“This is the defining moment of our generation,” Mr Fenn, the first union leader elected directly by members, said in an online video. “The money is there, the cause is justifiable, the world is watching, and the UAW is ready to stand up.”
The union and companies did not negotiate Friday, and the UAW said it planned to resume bargaining on Saturday. President Biden sent two senior administration officials to Detroit on Friday to encourage companies and the union to reach agreements.
At a Ford plant in Wayne, Michigan, west of Detroit, strikers waved placards — one read, “Record profits; record contracts” — and gave thumbs-up to vehicles honking their horns. A metal chain-link fence The sign read, “Absolutely no foreign cars allowed.” The protesters, all wearing red T-shirts, were assigned six-hour shifts at the protest site. If the strike continued, they were expected to work one shift per week. will be called.
While first and foremost the fight is between automakers and automakers, this conflict could have far-reaching consequences. A prolonged strike would reduce the number of new cars available for sale, which could increase inflation and force the Federal Reserve to keep interest rates higher.
A strike also presents a dilemma for Mr. Biden, who has called for rising incomes but must also be mindful of the economic impact of a strike and his goal of promoting electric vehicles as a solution to climate change.
Speaking at the White House on Friday, the president strongly supported the union. “Over the past decade, thanks to the extraordinary skills and sacrifices of UAW workers, auto companies have seen record profits, including the last few years,” he said. “But those record profits have not been shared fairly.”
The UAW says its wage demands are broadly in line with compensation increases for top executives at Ford, GM and Stellantis. The increase is intended to help workers recoup ground lost to inflation and to compensate for major concessions the union gave to automakers after the 2007-8 financial crisis, when GM and Chrysler found themselves in bankruptcy court. Was forced to reorganize.
But auto executives say they already pay production workers significantly more than rivals like Tesla and Toyota, whose U.S. workers are not unionized. The companies also argue that such large increases would undermine their efforts to develop electric vehicles and remain relevant as the industry makes a difficult and costly transition from gasoline cars and trucks to electric vehicles.
Ford, which employs the most union members, reported a $1.9 billion profit in the second quarter, equivalent to 4 percent of its sales. Tesla earned $2.7 billion in the same period, which is about 11 percent of its sales.
GM Chief Executive Mary T. Barra said the strike would hurt the industry. “I am extremely disappointed and disappointed,” he told CNBC on Friday. “We don’t need to be on strike right now.” He said the company has “put a historic offer on the table” that includes better job security and “world-class health care.”
Mr. Fenn’s decision to close only three factories is also a departure for the union, which in previous strikes had typically walked out all factories of a single automaker. By disrupting production of some of the most profitable vehicles while allowing most plants to continue operating, the union hopes to inflict pain on carmakers while allowing the majority of its members to continue collecting paychecks.
Less than 10 percent of the approximately 150,000 UAW members at the three companies are on strike. Limited strikes could allow the union to keep the pressure up longer by preserving its $825 million strike fund. The union will pay striking workers $500 a week and cover their health insurance premiums.
In addition to the Ford plant in Michigan, which makes Bronco and Ranger pickup trucks, workers worked at Wentzville, Mo., near St. Louis. Production ceased at a GM plant in Washington, D.C., which makes the GMC Canyon and Chevrolet Colorado and a Stellantis. Complex in Toledo, Ohio, which builds the Jeep Gladiator and Jeep Wrangler. If no agreement is reached, the union expects to target additional factories in the coming weeks.
The union is also demanding cost-of-living adjustments that would protect workers if inflation rises again. And it wants to restore pensions that the union agreed to eliminate for new hires after the financial crisis, improve retiree benefits and reduce work hours. The union also wants to end a pay system that starts new hires at wages much lower than the top UAW wage of $32 an hour.
Till Friday last week, companies had offered salary hikes of about 14.5 per cent to 20 per cent over four years. His proposals include lump sum payments to help offset the effects of inflation and policy changes that would raise the wages of recently hired workers and temporary workers, which are typically about one-third that of experienced union members. Earn less.
In a last-minute effort to keep assembly lines running, GM offered its workers a 20 percent raise late Thursday and said it was willing to pay cost-of-living adjustments to experienced workers. A 20 percent increase would be more than workers have received in decades. But the union rejected the proposal, which it says would barely cover inflation.
Leaders of automakers have criticized the UAW’s tactics, focusing on Mr. Fain, who became president in March and announced an end to overly friendly relations between union leaders and auto executives. He took office after two former UAW presidents were sentenced to prison as a result of a federal corruption investigation.
Stellantis Chief Executive Carlos Tavares called Mr. Fenn’s strategy “posture.” Ford’s chief executive, Jim Farley, said the two sides should negotiate instead of “planning strikes and PR events”. And GM’s Ms. Barra said that “each negotiation is based on the personality of its leader.”
If autoworkers are successful, they could inspire workers in other industries. Union activism is on the rise: Hollywood screenwriters and actors have been on strike for months. In August, United Parcel Service workers won the largest wage increase ever in a contract negotiated by the International Brotherhood of Teamsters.
“Workers have been oppressed for a very long time and now they’re realizing they can do something about it,” said Mijin Cha, an assistant professor at the University of California, Santa Cruz, who works on workers’ interests and climate change. Let’s study the relationship between the fight against. “People see that there is a path to greater economic security and that workers have power together.”
The strikes come as auto production is still recovering from the impact of the pandemic, which led to shortages of semiconductors and other components. Car prices and wait times have declined, but dealer inventories remain low and a prolonged strike may eventually make it difficult to find popular U.S.-made models.
“We’re not back up to speed inventory-wise,” said Wes Lutz, owner of Extreme Dodge, a car dealership in Jackson, Michigan.
Shortages aren’t always bad for carmakers. This allowed them to earn higher profit margins during the pandemic. And this will benefit all the carmakers who were having trouble moving certain models. Pat Ryan, chief executive of car-shopping app Co-Pilot, said Stellantis had at least 100 days of inventory for brands like Dodge and Chrysler, and a strike could help free up many dealers’ lots.
Still, if prices for popular models rise, it would be another acceleration in the Federal Reserve’s path to reducing inflation, and a political liability for Mr. Biden. The president, who has no formal role in the talks, said Friday he had been in touch with union leaders and auto executives, in addition to sending two administration officials to Detroit.
It is unclear how much impact the administration’s intervention will have on automakers or the union.
Despite Mr. Biden’s pro-union statements, Mr. Fain has withheld UAW support for the presidency despite generally supporting Democrats, and he has criticized federal incentives and loans to automakers for electric vehicle and battery production. Has been criticized, which does not require new factories to form a union.
Former President Donald J. Trump, who is the frontrunner in the Republican primary race, is courting UAW workers and has attacked Mr. Biden’s electric vehicle policies as bad for workers and consumers.
Contributed reporting Neil E. Boudet, J. Edward Moreno, santul nerkar And Jenna Smialek,