Strike imminent? UAW, Detroit 3 at odds on last day of old contract

A deal between UAW and the Detroit 3 negotiators still appears far away as we enter the last day before a strike is called. If no deal is reached, the UAW said it plans for a series of strikes targeting individual, undisclosed U.S. auto plants, rather than a full walkout of nearly 150,000 workers. For the first time in the UAW’s 80-plus-year history, the union could order members at all three of Detroit’s automakers – General Motors, Ford and Stellantis – to walk off the job starting after their contracts expire at 11:59 p.m. ET on Thursday, UAW President Shawn Fain said in a Facebook video address Wednesday evening.

“We do not yet have offers on the table that reflect the sacrifices and contributions our members have made to these companies,” he said. “To win we’re likely going to have to take action. We are preparing to strike these companies in a way they’ve never seen before.”

Referring to Biblical scripture, Fain asked union members: “Are you willing to have faith and move that mountain? Nobody’s coming to save us.”

Ordering workers at specific plants to stop working, Fain said, would “cause confusion.” Stopping work at a key plant that produces engines or transmissions, 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.

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.

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 wants auto union UAW and major automakers to work around-the-clock to avoid a strike, White House economic adviser Jared Bernstein said Wednesday.

Biden has “encouraged the parties to stay at the table and to work 24 and 7 to get a win-win agreement that keeps UAW workers at the heart of our auto future,” Bernstein said.

Asked whether Biden will bring in negotiators or be more actively involved, Bernstein said “the president’s been very much engaged.”

Biden has met the UAW president in the Oval Office, called him on Labor Day, and called executives from all three automakers before he left for the G20 last week to “encourage them to provide more forward leaning offers to stay at the table.”

Ford 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 during bargaining it had “not received any genuine counteroffers from the union.” 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.

Fain said the final decision on which plants to strike won’t be made until Thursday night and will be announced at 10 p.m. Eastern time.

Material from Reuters and the Associated Press were used in this report.