Staff at three of America's biggest carmakers have started strike action, the United Autoworkers Union says.
Work has been stopped at three plants owned by General Motors, Ford and Stellantis. It came after labour contracts expired on Thursday night. The UAW said the companies had not put forward acceptable offers. The fight threatens to trigger higher prices for buyers and major disruption for the motor industry giants.
“For the first time in our history we will strike all three of the Big Three,” the UAW's president Shawn Fain said.
The strike started at midnight eastern time at GM's Wentzville mid-size truck plant, Ford's Bronco plant in Michigan, the Toledo Jeep plant owned by Stellantis. The plants are critical to the production of some of the “Detroit Three's” most profitable vehicles.
Other facilities will continue to operate, the UAW said but it did not rule out broadening the strikes beyond the initial three targets. Ford said that the UAW had presented its first “substantive” counterproposal a few hours from the expiration of the current agreement.
“Unfortunately, the UAW's counterproposal tonight showed little movement from the union's initial demands,” it said.
With the deadline looming on Thursday evening, the White House said that President Joe Biden had spoken on the phone with Mr Fain about the negotiations but provided no further details. The union had sought a 40% pay increase for its roughly 140,000 members over four years, noting a comparable rise in pay for company leaders. Other demands included:
- a four-day working week
- the return of automatic pay increases tied to inflation
- stricter limits on how long workers can be considered “temporary” staff who do not receive union benefits
Talks between the two sides, which kicked off in July, were tense from the start, with Mr Fain forgoing the symbolic handshake with executives that has traditionally launched negotiations. Last month, 97% of members voted to authorise a strike.
As of Wednesday, the three companies had upped their initial proposals, with Ford offering a 20% hike in pay over the contract term, GM offering 18%, and Stellantis, the owner of Jeep and Chrysler, 17.5%, Mr Fain said. Workers said the companies could afford to be more generous after years of record profits.
“In my opinion we are owed this,” said Paul Raczka, who works in a Stellantis factory in Michigan making Jeep Grand Cherokees.
The fourth generation in his family to work in the industry, Mr Raczka said such jobs, which came with good healthcare and secure pensions, had provided an “awesome living” for his parents – a way of life that no longer feels possible today. The 31-year-old said he could not even afford to buy the car he makes.
“We are still sitting on the backburner while these CEOs are making, you know, upwards of $20m a year,” he said. “We're going to the grocery store, saying, ‘well, what do we really need this week?'”
Jim Farley, chief executive of Ford, told reporters earlier this week that he hoped to avoid a strike but there was a limit to what the company was willing to concede.
“We have to protect the sustainability of the company,” he said.
A 10-day strike by all workers at the three firms could cost the car companies nearly $1bn (£800m) and workers nearly $900m in lost wages, according to estimates by the Anderson Economic Group. It said the total hit to the economy could amount to more than $5bn, as the effects of the strike spread.
Tyler Theile, vice-president at the firm, said a stoppage would have to be “pretty lengthy to move the needle on national economic indicators.” Coming into the strike, the supply of cars, which has been strained since the parts shortages of the pandemic, remains far lower than it has been in the past.
Analysts said that could also mean a prolonged walkout leads to higher prices for buyers. Ford, GM and Stellantis together account for about 40% of US car sales, though their share has dropped sharply over the last quarter of a century, as foreign firms such as Toyota make inroads.
The last time the car industry faced a strike was in 2019, when workers at General Motors walked off the job for six weeks. GM worker Jessie Kelly, who participated in that walkout, said she had been trying to save up in anticipation of another stoppage. UAW participants are due to receive $500 in weekly strike benefits from the union, but that would still be significantly less than her wages, she said.
“My strike bills will not cover my mortgage, let alone the grocery bills, let alone the lights and the everything else. So it is gonna definitely be a struggle,” she said.
Ms Kelly, who lives near Detroit, said she supported the fight, despite the costs, noting that her pay has not kept pace with rising prices and is quickly eaten up by childcare and housing expenses. The 33-year-old said she had just two weeks of holiday a year, which she was typically forced to use for emergencies.
“At the end of the day, we all want to work for a corporation that is making good money. We just want our fair share of that,” she said. “At some point we have to say enough is enough.
“The CEOs are gonna keep paying themselves more and more money and we're the only ones being left behind.”
— CutC by bbc.com
