© Reuters. FILE PHOTO: UAW President Shawn Fain chairs the 2023 Special Elections Collective Bargaining Convention in Detroit, Michigan, U.S., March 27, 2023. REUTERS/Rebecca Cook/File Photo
By David Shepardson and Joseph White
(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 (NASDAQ:) Live address.
Ford Motor (NYSE:) has proposed a 20% hike in pay, General Motors (NYSE:) 18%, and Chrysler-parent Stellantis (NYSE:) 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.
