UAW On Strike Against All Big Three Automakers For First Time In History
Good morning! It’s a historic Friday, September 15, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Historic Strike Underway For UAW
The United Auto Workers union launched a historic strike overnight, targeting all three major American automakers after contract negations failed to reach a deal.
UAW members at three assembly plants in Michigan, Ohio, and Missouri officially went on strike after their labor contract expired at 11:59 p.m. Now, about 13,000 members across three plants are walking the picket line.
Stellantis’ Toledo Assembly Complex makes the Jeep Wrangler and Gladiator. Ford’s Wayne plant builds Broncos and Rangers, and GM’s Wentzville, Missouri plant builds the Chevy Colorado, Chevy Express, GMC Canyon, and GMC Savana. From the Detroit Free Press:
As the deadline for a new contract passed, cheering could be heard from inside the gates at Stellantis’ Toledo Assembly Complex as cars and trucks streamed out and honking horns provided the soundtrack. At Ford Motor Co.’s Michigan Assembly in Wayne, union strikers cheered: “We love you, Shawn, we love you,” when UAW President Shawn Fain arrived after midnight to join the picket line. He stayed until after 1 a.m. and told members, “I work for you.”
In Wayne, only the Final Assembly and Paint portion of the facility was targeted. The third plant in what was branded as the first wave of walkouts was General Motors’ Wentzville Assembly in Missouri.
The strike, which the union is calling the “Stand Up Strike,” is targeting specific plants of Ford, General Motors and Stellantis, which makes Chrysler, Dodge, Jeep and Fiat brands. Union leaders have said they will select new target plants to take out on strike in various waves if negotiations continue to fail to land new agreements with the auto companies. The strategy is designed to keep the automakers off-guard and leverage the union’s position to secure a better contract than the offers the Detroit automakers have made so far.
In a Facebook Live stream, Fain said the aim of the “Stand Up Strike” is going to keep the Big Three guessing, and it’s going to give the UAW’s negotiators maximum leverage and flexibility on bargaining.
“No matter what, all of us need to keep organizing: Rallies, protests, red shirt days,” Fain reportedly said during the broadcast. “We must show the companies you are ready to join and stand up and fight on a moment’s notice.”
His comments came near the end of a day of last-minute bargaining that ultimately stalled. The UAW has been negotiating with all three carmakers separately, yet simultaneously, since late summer.
At this point, I’d be remiss if I didn’t say you should really check out Freep’s on-the-ground coverage of the strike. It’s well worth your time!
2nd Gear: How The UAW Strike May Impact The Economy
If the UAW strike against the Big Three automakers drags on for a prolonged period of time, it could slow an “outperforming” U.S. economy, according to Reuters. In theory, it could risk the first monthly net drop in payroll employment in nearly three years. That being said, it is unlikely to trigger a recession on its own. From Reuters:
Economists see the most immediate risk to activity concentrated in the auto sector itself, which only this year got back on its feet after two years when pandemic-related supply chain bottlenecks hampered vehicle output. With dealer inventories restrained, sales of new cars and trucks slumped even as consumer demand remained strong.
[…]
Should [the strike] widen in the weeks ahead to include all 146,000 UAW members at the three companies, it could become the largest automotive industry strike in a quarter century – since more than 150,000 GM workers went off the job for nearly two months in 1998.
That would put “at risk half a billion dollars per day in an economy that generates more than $26.7 trillion in goods and services each year, or more than $73 billion per day,” RSM’s chief U.S. economist Joe Brusuelas estimated this week.
RSM estimates the U.S. economy would suffer a modest 0.2% drag to annualized growth of gross domestic product this quarter should the strike action last for a month, Brusuelas said.
“While that amount is large in nominal dollar terms, it would not be large enough to tip the economy into recession. In the end, the impact of a such a strike would be modest compared to previous generations,” Brusuelas reportedly said.
3rd Gear: Talks Stalled In Hours Leading Up To Strike Deadline
Negotiators from the Big Three and UAW reportedly made very little progress in reaching new contracts as the deadline for a deal approached on Thursday night. Part of that is supposedly because UAW President Shawn spent much of the night elsewhere. From Automotive News:
Stellantis, one of the two automakers the UAW in August accused of bargaining unfairly, shot back at the union early Friday, suggesting that its leaders showed little interest in reaching a deal as the strike deadline arrived.
“We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers,” Stellantis said in a statement after the union began striking its Jeep plant in Toledo, Ohio.
The UAW filed unfair labor practices charges Aug. 31 against Stellantis and General Motors, arguing that the companies were moving too slowly.
GM, in a statement issued after workers at its plant in Wentzville, Mo., were called out on strike, said the company was “disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments.”
In a video, GM’s top global manufacturing executive, Gerald Johnson, reportedly said the automaker submitted “four compelling offers” to the UAW. Ford says it never received a “substantive counterproposal” from the UAW until 8 p.m. on Thursday. That’s just four hours before the deadline. It also called the offer “unsustainable” and it “showed little movement from the union’s initial demands submitted Aug. 3.”
A source with knowledge of the negotiations said UAW President Shawn Fain appeared at the Ford bargaining table for the 8 p.m. offer but did not stay to continue the talks.
Fain then went on Facebook Live at 10 p.m. to announce the three plants being ordered to strike. He arrived at Ford’s Michigan Assembly Plant, about a 40-minute drive from the UAW’s headquarters, where negotiations were taking place Thursday, shortly after midnight to join the workers on strike.
“They’ve had our economic demands for six weeks,” Fain told reporters outside the plant. “They waited until the last week to want to get down to business. Shame on them, and what they’re saying’s complete BS.”
Before the strike, Fain reportedly said the union wouldn’t meet with automakers on Friday if negotiations remained unsolved. Instead, he and other union officials are heading to picket lines and will be holding a rally with Senator Bernie Sanders in downtown Detroit.
4th Gear: Ford CEO Jim Farley Says UAW Proposal Could ‘Bankrupt’ Ford
Ford CEO Jim Farley says the UAW’s proposal to hike wages 40 percent, cut workweeks, and add new pension benefits could be bad news for the automaker, which is the kind of thing you might say if you were management negotiating a new labor deal. From Reuters:
“You want us to choose bankruptcy over supporting our workers,” Farley, in a CNBC interview, said of the UAW proposal. He said there are no current talks, and the automaker has received no counteroffer. “Nothing is going on.”
Farley said if the UAW proposal had been in effect since 2019, instead of making about $30 billion in profits over four years, the company would have lost about $15 billion “and gone bankrupt by now.”
For those of you keeping track at home, Ford made billions last year and expects to make billions more this year.
Reverse: Though Day For Big Business
Neutral: Poo On You, Drew!
On The Radio: Lisa Simpson – “Union Strike Folk Song”
Lisa Simpson – Union Strike Folk Song (best quality)
