GM, Stellantis idle plants and lay off workers in Kansas and Ohio

The United Auto Workers (UAW) and the Detroit Three automakers on Thursday have a final full day to make significant progress on a new contract before the union plans to otherwise announce an expansion of its U.S. strikes.

The standoff is fueling worries about prolonged industrial action that could disrupt production and ripple through the supply chain and dent U.S. economic growth.

The UAW last week launched unprecedented, simultaneous strikes at one assembly plant each of General Motors, Ford and Chrysler parent Stellantis.

General Motors said in a statement that it was forced to idle its Fairfax Assembly Plant in Kansas City, Kansas, due to the UAW’s strike at GM’s Wentzville Assembly Plant in Missouri. The Wentzville plant sends metal stampings to Fairfax. “It is unfortunate that the UAW leadership’s decision to call a strike at Wentzville Assembly has already had a negative ripple effect, with GM’s Fairfax Assembly plant in Kansas being idled today and most of its represented team members leaving the plant as there is no work available,” GM said in a statement.

Chrysler-parent Stellantis said Wednesday it will temporarily lay off 68 employees in Ohio and expects to furlough another 300 workers in Indiana because of the United Auto Workers strike at a Jeep assembly plant in Toledo. Stellantis said it will immediately furlough 68 employees at its Toledo Machining Plant in Perrysburg, Ohio, citing storage constraints. Stellantis anticipates similar actions at Kokomo Transmission and Kokomo Casting in Kokomo, Indiana, impacting an estimated 300 additional employees.

UAW President Shawn Fain said in a video released late on Monday that he would announce an expansion of the strikes at 12 p.m. EDT on Friday (1600 GMT), barring “serious progress” in talks.

“We’re not waiting around. And we’re not messing around,” he said at the time.

UAW workers are expected to rally at one of Ford’s two Louisville, Kentucky assembly plants on Thursday evening in support of workers striking at other plants.

The city is home to Ford’s Louisville assembly plant and its Kentucky truck plant. Ford CEO Jim Farley has previously said the Kentucky truck plant, which assembles F-Series trucks, is the company’s most profitable plant globally.

Analysts expect plants that build high-margin pickup trucks such as Ford’s F-150, GM’s Chevy Silverado and Stellantis’ Ram to be the next targets if the walkout continues.

Fain has said Detroit automakers have not shared their huge profits with workers while enriching executives and investors.

GM President Mark Reuss on Wednesday rejected claims by the union that the record profits automakers make go toward fueling “corporate greed,” saying they have been reinvested in electric vehicles as well as gasoline-powered cars.

In the opinion piece published in the Detroit Free Press, Reuss also called UAW’s demands for a 40% pay hike “untenable,” signaling the two sides remain far apart over the key issue.

The three automakers have proposed 20% raises over 4-1/2 years.

UAW workers also want to end a tiered wage structure that they say has created a large gap between newer and older employees, forcing some to work two jobs to make ends meet.

S&P said the strikes were highly likely to last several weeks, potentially cutting third-quarter U.S. gross domestic product by 0.39% and causing “upheaval” across global automotive supply chains.

The ongoing walkout at mid-sized truck factories benefits rival Toyota Motor, which does not have unions at its U.S. factories and is about to launch redesigned Tacoma pickup trucks, S&P added.

Tesla investors have said a potential hike in wages and benefits at Detroit competitors would widen the EV giant’s labor cost structure advantages.

Material from Reuters was used in this report.