This historic action begins with a ‘stand-up strike’, targeting one Ford, GM and Stellantis plant.
After negotiations failed to coalesce into signed contracts with each of the Big Three automakers, the United Auto Workers union went on strike for the first time since 2019. However, never in the UAW’s history have workers taken such action against Ford, General Motors and Fiat Chrysler (under parent company Stellantis) at the same time.
This is not starting as a company-wide strike. Instead, about 12,700 workers will organize what UAW president Shawn Fain referred to as a “stand-up strike”. Those workers will target three facilities — one per automaker — with the goal of targeting some of each company’s most profitable models:
- Ford Michigan Assembly in Wayne, Michigan: Builds the Bronco and Ranger
- GM Wentzville Assembly in Missouri, outside St. Louis: Builds the Chevy Colorado and GMC Canyon as well as the Chevy Express/GMC Savana commercial vans
- Stellantis Toledo Assembly in Ohio: Builds the Jeep Wrangler, Wrangler 4xe and Gladiator
“This strategy will keep the companies guessing,” Fain said two hours before the UAW’s old contracts with each of the Big Three automakers expired on Thursday, September 14.
While it’s unclear how long the strike will last, Fain noted other facilities could go on strike as well, expanding outward from these initial three walkouts. So, most UAW workers will continue their work, at least for now, which is a strategy that may help stretch the union’s $825 million strike fund to protect workers engaging in the strike. “If we need to go all out, we will,” Fain stressed.
As president of the UAW, Fain represents nearly 150,000 workers in this three-pronged strike campaign.
What are the UAW’s demands?
After 11:59 PM Eastern Time on September 14, the UAW’s old contracts with Ford, GM and Stellantis expired.
The new contract negotiations focus on four main areas: higher pay; ending the so-called “tiered wage system” introduced in 2007; reintroducing cost-of-living adjustments (COLA); and bringing back defined pension benefits for all workers. Presently, workers hired after 2007 receive a 401(k) where automakers match 6.4% of the worker’s contributions.
Other demands include curtailing work hours to 32 hours per week, while maintaining pay at a 40-hour-per-week level. “Our members are working 60, 70, even 80 hours a week just to make ends meet,” Fain said. “That’s not living. It’s barely surviving and it needs to stop.” The union also believes it should be able to strike over plant closures, such as the contentious decision to close the Belvidere, Illinois plant where workers built the Jeep Cherokee.
Another key consideration is UAW representation at new electric vehicle battery factories. It demands the ability to represent workers at 10 such plants, particularly as workers building internal combustion vehicles will need somewhere to work as the industry transitions toward electrified vehicles. Some of these plants are under construction or receiving heavy investment for retooling as part of joint-venture arrangements with South Korean battery makers, like LG.
Automakers offered up to 20% pay raises, but that wasn’t enough
In response to the failed negotiations, automakers released their own statements on their positions with regard to the strike. Ford, for example, says it made four offers to the UAW since August 29, with the latest offering a 20% wage increase over four years. Fain, however, demanded a 40% wage increase, arguing it would not put undue stress on the companies’ bottom lines, and argued the Big Three engaged in billions of dollars’ worth of stock buybacks and executive pay packages over the past several years. Ford also says it offered COLA, an end to wage tiers, more payments to retirement plans, better benefits and more paid time off.
While GM didn’t reveal everything it offered the UAW, Fain did mention an 18% wage increase on Wednesday, prior to the expiration of the union’s previous contracts. The automaker also agreed to fast-track workers to higher wage tiers, which came after Fain called a prior offer on September 7 “insulting”.
Stellantis’ latest offer included a 17.5% increase in worker pay over four years. Fain called an earlier offer from the automaker on September 8 “deeply unfair”.
The costs involved with the UAW’s strike
According to Deutsche Bank estimates, a full, company-wide strike would hit automakers’ coffers to the tune of $400 million to $500 million per week of lost production. It’s entirely unclear how long the strike will last at the moment, though automakers could potentially make up for lost production by boosting its schedules. If the strike lasts weeks or months, however, that possibility could fade — a prospect the UAW is hoping will compel automakers to return to the table with better offers.
Suppliers and businesses adjacent to UAW-represented workers at each of the Big Three automakers could see cash supplies dry up if the strike goes on too long, as production stalls. On the other side of the token, non-unionized automakers like BMW, Honda, Mercedes-Benz, Tesla, Toyota and others could take advantage of ongoing strike woes to disrupt the Big Three’s market position.
