UAW expands strike on GM and Stellantis but announces progress in talks at Ford

New York
CNN
—

The United Auto Workers union is expanding its strike against GM and Stellantis, but said progress in negotiations with Ford means it will not increase the number of Ford workers on the picket lines.

UAW President Shawn Fain made the announcement Friday morning. “At noon ET today, all GM and Stellantis parts distribution centers will be on strike,” he said. “We will close parts distribution until these two companies come to their senses and come to the table with a serious offer.”

But Fine said there was a significant improvement in offers from Ford and that is why the strike was not expanded there.

“We want to realize that Ford is serious about reaching an agreement,” he said.

The strike will now extend to include the 38 parts and distribution centers of General Motors and Stellantis, spread across 20 states. Distribution centers generally send parts to dealers for use in repairs, so this move could quickly cripple dealers’ ability to make repairs, the most profitable part of their business.

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GM said the expanded strike was “unnecessary” but it planned to continue negotiating in good faith.

“Today’s UAW senior leadership escalation is unnecessary,” the company said in a statement Friday. “We have contingency plans for different scenarios and are prepared to do what is best for our business, our customers and our dealers… We will continue to bargain in good faith with the union to reach an agreement as quickly as possible.”

However, the announcement of the progress at Ford raised hopes that the strike could be ended, at least there, relatively quickly. Before Friday, there were few signs that the union and management of the three companies were close to reaching an agreement.

“Ford is working diligently with the UAW to reach an agreement that rewards our workforce and enables Ford to invest in a vibrant, growing future,” Ford said in a statement. He added: “Although we are making progress in some areas, we still have significant gaps to bridge regarding key economic issues. Ultimately, the issues are interconnected and must work within a comprehensive agreement that supports our mutual success.”

The announcement comes just days after Ford reached a tentative agreement with Canadian union Unifor, averting a strike by more than 5,000 auto workers in that country that was supposed to destroy its three plants there.

While the strike will continue at the three assembly lines already on strike — the Ford Truck plant in Wayne, Michigan, the GM plant in Wentzville, Missouri and the Stellantis plant in Toledo — no additional plants will be added, only parts distribution centers. But that will create significant pressure on GM and Stellantis through their dealer network. Stellantis sells vehicles in North America under the Jeep, Ram, Dodge and Chrysler brands.

The union went on strike on September 15 with strikes at just three of the companies’ 25 US assembly plants, with about 12,700 of its 145,000 members in the traditional “Big Three” walking out early that morning.

About 5,625 UAW members are working on the new strike targets announced Friday. That would bring the total number of UAW members on strike to just over 18,300. The strike will now stretch from coast to coast, with workers striking at facilities from Virginia to California.

Agents and repair centers

The new strikes are specifically aimed at harming agents.

The Big Three car dealerships are not owned by the Big Three themselves. Instead, they are individual franchisees who buy cars from manufacturers and then sell them to customers.

Simply selling cars is not how these dealerships make a lot of their money, however: Dealerships make a lot of their money from mechanics in service centers. Every time a car needs repair, it likely needs a new part, and many drivers bring their cars directly to dealerships for service, especially when they are under warranty.

But the expanded UAW strike is now targeting GM and Stellantis parts distribution centers. Without sending new parts to service centers, dealerships will soon start running dry, potentially forcing them to turn away car repairs, and piles of potential revenue.

Without this additional revenue stream, dealer owners themselves could begin to increase pressure on GM and Stellantis to start making concessions to their workers, as Ford has done.

Ford, which has made concessions on everything from eliminating pay levels to job security, will see its dealer service centers likely operate as usual.

This is the first time the union has hit all three major automakers at the same time. Traditionally, it has chosen one company at a time as the target of its functional actions. In most cases, all employees in that company went on strike at the same time.

The union insists it is better to follow this new strategy of targeted strikes that disrupt operations, but has raised the possibility of additional action in the future if companies do not respond to its demands.

During Friday’s announcement, Finn noted “maintaining our flexibility and leverage to escalate as needed.”

The union began negotiations to demand an immediate 20% increase for its members and a 40% total pay rise over the four-year contract term.

It also wants to undo a number of concessions the union gave up during negotiations in 2007 and 2009 when Ford was running out of cash and Stellantis’ predecessor General Motors and Chrysler were headed for bankruptcy and federal bailouts.

Among those concessions it wants to reverse: The UAW wants companies to offer traditional pension plans and retiree health care to workers hired since 2007, which are now only available to older employees. It also calls for the resumption of cost-of-living adjustments to protect workers from rising prices, as well as an end to the minimum level of wages and benefits for workers hired since 2007.

As Friday approaches, companies are recording each offer raising about 20% over the life of the contract, including immediate raises of about 10%.

But even though the companies are making record or near-record profits, they say the union demands are unattainable and would put them at a competitive disadvantage compared to non-union rivals, including Tesla and foreign automakers that operate U.S. factories.

As of 10:30 a.m. ET, Stellantis (STLA) increased by 0.98%; stronghold (F) by 3.57%; And GM (GM) by 0.7%.