United Auto Workers President Shawn Fain ordered new walkouts at the Ford Chicago plant that builds Explorer SUVs and General Motors’ Lansing Delta Township plant that builds Chevrolet Traverse SUVs, rivals to the Explorer.
But Fain said the UAW will not strike more Stellantis operations after the company put a new offer on the table moments before Fain was scheduled to start a video address at 10 AM Detroit time. That offer moved closer to UAW demands on cost of living adjustments, outsourcing and the right to strike over plant shutdowns.
That last proposal could be significant if it means Stellantis will reverse a decision to shutter its Belvidere, Ill. Jeep assembly operations. Fain did not say.
It’s just as important what Fain did not do: Call strikes at GM, Ford and Stellantis large pickup truck plants such as Ford’s F-series Super Duty plant in Louisville, Ky. or GM’s Fort Wayne truck plant. When the UAW settles contracts – now or months from now – profits from those factories will be needed to pay higher wages and profit sharing.
The latest round of strikes followed a busy week in which U.S. President Joe Biden joined a picket line to endorse the UAW’s fight for a record contract, and his would-be replacement, Donald Trump, told a group gathered at a non-union Michigan vehicle parts maker that auto jobs will disappear because of Biden’s EV policies.
Amid all the politicking, there was little evident progress during most of the week toward agreements that could bring the walkouts to an end.
The flurry of activity Thursday and Friday at Stellantis left central issues unresolved – including how big raises will be and what additional retirement benefits UAW members will get.
Bets on when the UAW and the Detroit Three will get to a deal have a wide range, from months to potentially another week or so. On pay, the companies have dug in at 20% over a 4 ½ year agreement. The UAW’s stated demand is 40%.
What’s certain is that the Detroit Three’s U.S. labor costs will go up over the next four years at faster pace than they rose during the last four. Labor is less than 10% of a vehicle’s cost. But it is a significant share of the cost difference among automakers since commodities such as steel and plastic cost everyone about the same.
Morgan Stanley analyst Adam Jonas in a note Friday asked the next question: Will rising labor costs and steep EV losses push GM, Ford and Stellantis to scale back the billions they’ve proposed investing in U.S. EV capacity? Ford on Monday hit the brakes on a $3.5 billion Michigan EV battery plant. Stay tuned.
