Updated 10:29 a.m. 9/14
(Reuters) – U.S. automakers and union negotiators offered little hope a deal would be reached on Thursday to avoid a midnight walk-off that would be the United Auto Workers’ first-ever simultaneous strike against the Detroit Three carmakers.
The UAW on Wednesday outlined plans for a series of strikes targeting individual, undisclosed U.S. auto plants if agreements are not reached by 11:59 p.m. EDT on Thursday (0359 GMT on Friday), rather than a full walkout.
“To win, we’re likely going to have to take action,” UAW President Shawn Fain said on Wednesday.
Coordinated strikes would represent arguably the most ambitious U.S. labor action in decades and could impact U.S. economic growth, depending how long they last.
Primary bargaining talks have moved to the UAW’s office in downtown Detroit where negotiations are ongoing Thursday with just over 12 hours before the deadline, sources said.
Fain said the Detroit Three had offered 146,000 U.S. auto workers pay raises of as much as 20% over 4-1/2 years, but he blasted the proposal as inadequate even as automakers protested the union had yet to formally respond to their latest, more generous offers. The union is asking for 40% raises and major improvements in benefits.
The Washington Post reported Thursday Biden administration officials are preparing economic measures to protect auto suppliers that could be impacted, including through government loans. The White House declined to comment on the report.
Ford CEO Jim Farley said in a letter to employees seen by Reuters, “bargaining is a two-way street and we continue to implore the UAW to stay at the table, work together to reach an agreement, and avert a strike.”
Ford hourly employees on strike “would take home nearly 60% less on average with UAW strike pay than they would from working. And without vehicles in production, the profit-sharing checks that UAW workers could expect to receive early next year will also be decimated by a significant strike.”
Fain outlined a strategy to “create confusion” with a series of work stoppages targeting individual U.S. plants if no deal is reached.
Stopping work at a key engine or transmission plant, for example, could have a cascading effect by depriving other factories of parts they need to produce vehicles. Another option would be to strike profitable pickup truck or SUV assembly plants.
Fain said it was still possible that at a later date all of the auto workers could strike.
A full strike would hit earnings at each affected automaker by about $400 million to $500 million per week assuming all production was lost, Deutsche Bank has estimated.
Some losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months.
U.S. President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future,” White House economic adviser Jared Bernstein said Wednesday. A prolonged strike could pose political problems for Biden.
Senator John Fetterman, a Democrat, rejected the idea automakers could not pay more, saying the Detroit Three CEOs made a combined $74 million last year.
Ford Motor has proposed a 20% hike in pay over the contract term, General Motors 18%, and Chrysler parent Stellantis 17.5%, Fain said. That is less than half the pay hikes the union has sought, but higher than companies initial offers.
GM and Stellantis said they had received responses to their latest offers, while Ford said Thursday it was still waiting for a UAW counteroffer. GM said it continues “to bargain directly and in good faith with the UAW.”
Ford warned of a grim scenario. “The future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome.”
The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.
Fain said automakers had rejected the pension, 32-hour work week and other benefit improvements sought. He also criticized proposed changes to profit sharing that would cut payments to workers.
The UAW said it was planning a rally in Detroit on Friday that will include Fain, Senator Bernie Sanders and other members of Congress, coinciding with a first of day of expected walkouts.
(Reporting by David Shepardson; Editing by Peter Henderson, Jamie Freed and Nick Zieminski)
(Reuters) – United Auto Workers (UAW) President Shawn Fain said on Wednesday the union is preparing to strike against the Detroit Three automakers, a day before four-year labor deals are set to expire Thursday night.
Fain said the Detroit Three automakers had offered pay raises of as much as 20% over four and a half years but called the hikes inadequate.
Coordinated strikes would mark the first-ever simultaneous labor stoppage at all three Detroit automakers and one of the largest U.S. industrial labor actions in recent years.
“We’re making progress but we’re still very far apart on our key priorities,” Fain said in a Facebook Live address.
Ford Motor has proposed a 20% hike in pay, General Motors 18%, and Chrysler-parent Stellantis 17.5%, Fain said. That is less than half the 40% pay hikes the union has sought — including an immediate 20% hike on ratification of a contract and 5% annual hikes.
Fain outlined a strategy to “create confusion” for the Detroit Three automakers with a series of strikes targeting individual U.S. plants if no deal is reached.
Reuters reported late on Tuesday that the union may opt to strike at targeted auto plants if they fail to reach new contracts covering 146,000 U.S. auto workers.
A UAW strike that shuts the Detroit Three manufacturers could cost carmakers, suppliers and workers over $5 billion, Michigan-based Anderson Economic Group estimated, and could lead to a disruption of the broader auto supplier network.
Stellantis confirmed Wednesday it had made a third offer.
“We’re awaiting their response to this latest offer,” the company said in an email to employees. “Our focus remains on bargaining in good faith to have a tentative agreement on the table before tomorrow’s deadline.”
Stellantis last week said it had offered U.S. hourly workers a 14.5% wage hike over four years, while GM had offered workers a 10% wage hike and two additional 3% annual lump-sum payments over four years. Stellantis last week did not offer additional lump-sum payments.
U.S. President Joe Biden has “encouraged the parties to stay at the table and to work 24/7 to get a win-win agreement that keeps UAW workers at the heart of our auto future,” White House economic adviser Jared Bernstein said Wednesday.
Biden called top executives from all three automakers last week to “encourage them to provide more forward-leaning offers to stay at the table,” Bernstein added.
AFL-CIO President Liz Shuler told Reuters autoworkers do not want to go on strike “but they will if they have to in order to reach a fair deal.”
Shuler noted there have been over 200 strikes this year in the United States. “It’s because the economy is broken. Workers are fed up,” she said.
The UAW and GM were meeting Wednesday in a new round of bargaining, sources said.
DETROIT RALLY PLANNED
The UAW said it is planning a rally in Detroit Friday that will include Fain, Senator Bernie Sanders and other members of Congress that would coincide with a first of day of walkouts.
The UAW is considering initially targeting only some specific plants for work stoppages at the three Detroit automakers, two sources briefed on the matter said, adding the strike plan could still change.
Targeting strategic plants could quickly force automakers to halt U.S. production and could extend the time before the UAW’s $825 million strike fund is exhausted.
The UAW initially sought a 20% wage hike upon ratification and four annual 5% hikes, but had offered to trim those hikes to around 36% in total, three sources told Reuters. Fain said the union was still seeking 40% hikes in total. “We’ve been at 40% — that is our demand,” Fain told CNBC.
Ford last week hiked its offer to a 10% wage hike and lump sum payments after offering a 9% wage increase through 2027 and 6% lump sum payments.
The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.
(Reporting by David Shepardson; editing by Christina Fincher, Nick Zieminski and Deepa Babington)
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