The Detroit News
Sept. 29, 2023
Kalea Hall, Breana Noble, Beth LeBlanc, and Jordyn Grzelewksi
As the United Auto Workers widened its strike Friday against two of Detroit’s automakers, union President Shawn Fain insisted “talks have not broke down” as the expanding work stoppage moves into its third week — unnerving suppliers and business leaders worried about longer-term damage and prompting angry words from the chief executive officers of both companies.
Key differences remain on wages, job security and retiree benefits, and Ford Motor Co. Chief Executive Officer Jim Farley raised another after workers walked out at the Dearborn automaker’s Chicago Assembly plant and General Motors Co.’s Lansing Delta Assembly plant: the union, he said, is blocking a possible settlement by demanding that employees in the company’s four planned battery plants be included in the Ford-UAW master agreement.
“What’s really frustrating is that I believe we could reach the compromise on pay and benefits,” Farley said in a news conference, “but so far the UAW is holding the deal hostage over battery plants.”
The Ford chief executive officer’s comments mark the first time since the strike began Sept. 15 that the union or any of the Detroit Three automakers have publicly mentioned the battery plants in connection with the ongoing contract talks.
They also come days after Ford said it was pausing construction of its planned $3.5 billion battery plant in Marshall. Farley said Friday the automaker is reevaluating the project’s scope based primarily on labor costs, the final language of the Inflation Reduction Act, and how the next contract with the UAW affects the company’s ability to invest in the products that would be supplied by the plant.
“Keep in mind, these battery plants don’t exist yet,” Farley said. They’re mostly joint ventures. And they have not been organized by the UAW yet because the workers haven’t been hired, and won’t be for many years to come.”
In response, Fain said in a statement that the Ford chief executive officer should “know that we are far apart on core economic proposals like retirement security and post-retirement healthcare, as well as job security in this EV transition, which Farley himself says is going to cut 40 percent of our members’ jobs.”
GM Chief Executive Officer Mary Barra, in a statement issued early Friday evening, slammed the union’s approach to the talks and its decision to send more workers out.
“As we saw this week, UAW leadership continues to expand the strike while upping the rhetoric and the theatrics,” she said. “It’s clear that there is no real intent to get to an agreement.”
The union’s latest expansion of its unprecedented strike against all three Detroit automakers bring the number of autoworkers on the picket lines to 25,300, out of 146,000 UAW members at the companies, and targets profitable SUVs made at both plants. Lansing Delta Assembly makes Chevrolet Traverses and Buick Enclaves, while Chicago Assembly produces Ford Explorers, Police Interceptors and Lincoln Aviators.
“We’re still talking with all three companies,” Fain said during a livestream announcing the new strike targets. “And I’m still very hopeful that we can reach a deal that reflects the incredible sacrifices and contributions our members have made over the last decade. But I also know that what we win at the bargaining table depends on the power we build on the job. It’s time to use that power.”
Chicago Assembly has 5,700 hourly workers and Lansing Delta Assembly has 2,300 workers, including 300 who work at the Lansing Regional Stamping part of the complex, which will not be on strike. The stamping plant was likely left out as a strike target since it supplies several GM plants, including Lansing Grand River, Flint Assembly, Fort Wayne Assembly in Indiana and Oshawa Assembly in Ontario.
Gov. Gretchen Whitmer’s office weighed in on Friday, saying in a statement from deputy chief of staff Zack Pohl that “the prospect of a prolonged strike combined with a federal shutdown is the greatest threat to the American economy, future job growth, and our state’s fiscal health if a deal is not made soon.”
“The Governor will always have working people’s back which is why we need to get a deal done ASAP so everyone can get back to work making the best cars and trucks in the world,” he said. “Time is of the essence.”
Economic development officials and industry experts also expressed rising concern Friday about the possible outcomes of the walkouts and the negotiations to end them.
Dan Ives, a Wedbush Securities analyst, wrote in a Friday note: “This UAW debacle strike trajectory is like watching a slow moving car crash take place on black ice in our view.”
To Ives, the strike is “now getting nastier with both sides digging in the trenches in what could be a long and drawn out battle between the UAW and the Detroit auto stalwarts.”
Stellantis spared this time
Stellantis managed to avoid a strike expansion on Friday. “Moments before this broadcast,” which was close to half an hour late, the Jeep and Ram truck maker made progress on the cost-of-living adjustments that had been suspended in 2009, the right not to cross a picket line, the right to strike over product commitments and plant closures, and an outsourcing moratorium, Fain said.
In a statement provided by spokesperson Jodi Tinson, Stellantis said it “has been intensely working with the UAW to find solutions to the issues that are of most concern to our employees while ensuring the company can remain competitive given the market’s fierce competition. We have made progress in our discussions, but gaps remain. We are committed to continue working through these issues in an expeditious manner to reach a fair and responsible agreement that gets everyone back to work as soon as possible.”
The strike expansion at GM will leave without work for a portion of its Parma Metal Center in Ohio, which employs 960 people outside Cleveland, and the Marion Metal Center that sits between Indianapolis and Fort Wayne in Indiana and has 717 employees.
Under the previous labor agreement, there are no provisions for company-provided supplemental unemployment benefits, the company said in a statement provided by spokesperson David Barnas. The union has said members laid off at the Detroit Three because of the strike will receive $500 per week in pay like the members on strike.
“We have said repeatedly that nobody wins in a strike, and this is yet another demonstration of that fact,” GM’s statement said. “We will continue to bargain in good faith with the union to reach an agreement as quickly as possible.”
GM didn’t go completely without a win on Friday, though. UAW spokesperson Jonah Furman said the union withdrew unfair labor practice charges it had filed with the National Labor Relations Board against GM and Stellantis, contending the companies hadn’t provided economic proposals two weeks out from the Sept. 14 contract expiration.
Competitiveness concerns
The UAW is using a targeted plant strike strategy that has the union send workers to picket lines based on how negotiations proceed. The union first called on workers to strike at GM’s Wentzville, Missouri, midsize truck plant, Ford’s Michigan Assembly plant where the Bronco and Ranger are built and Stellantis’ Toledo plant where the Jeep Gladiator and Wrangler are built. Last week, the union added all of the parts distribution warehouses for Stellantis and GM to the list, leaving Ford out because it had made progress in talks with the Dearborn automaker on cost of living adjustments, wage disparities at feeder plants and job security protections.
The sides have remained far apart on the union’s demands to provide pensions for all employees, retiree health care, a restored jobs bank and wage increases of 36% over four years. The companies have offered wage hikes of about 20% while expressing concern that granting all of the union priorities would further widen the gap between their employee costs and those of non-union competitors.
Some analysts watching the strike share those concerns.
“This is a defining period for Detroit and the future of the auto industry as we firmly believe that if GM, Ford, Stellantis accept anything close to the deal on the table the future will be very bleak for the US auto industry,” wrote Ives, the Wedbush Securities analyst.
In an open letter to Michigan leaders, the Detroit Regional Chamber wrote that “the stakes” of the UAW strike against the Detroit Three “involve more than the strike’s length, the number of plants impacted, and the size of workers’ pay increase. It is about America’s automotive future and Michigan’s role in it.”
The union contends, and experts agree, that labor costs represent about 5% of a vehicle’s overall cost.
Fain told reporters at a rally Friday outside of the union’s Solidarity House headquarters that competitiveness isn’t an excuse not to compensate workers fairly.
“What I worry about is the fear-mongering and the threats, and ‘competition’ in the words of the corporations means one thing: It means a race to the bottom,” he said. “They’re not going to disappear, because we’re going to bargain a great contract. We’re going to organize like hell, because the non-union companies down there that are even lower standards than we are are going to see the difference, and they’re going to want to be a part of something bigger.”
In a Friday message to employees, Gerald Johnson, GM’s executive vice president of global manufacturing, wrote that the company had “still have not received a comprehensive counteroffer from UAW leadership to our latest proposal made on September 21. Calling more strikes is just for the headlines, not real progress. The number of people negatively impacted by these strikes is growing and includes our customers who buy and love the products we build.”