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Auto workers strike after contract talks with US car giants fail | Automotive industry

Auto workers have launched a series of strikes after their union failed to reach agreement with the US’s three largest manufacturers over a new contract, kicking off the most ambitious industrial labor action in decades.

The deadline for talks between Ford, General Motors, Stellantis and the United Auto Workers (UAW) expired at midnight on Thursday, with the sides still far apart on the union’s new contract priorities.

The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US.

The strikes kicked off at midnight at a General Motors plant in Wentzville, Missouri, a Stellantis plant in Toledo, Ohio, and a Ford assembly plant in Wayne, Michigan.

They involve a combined 12,700 workers at the plants, which are critical to the production of some of the Detroit Three’s most profitable vehicles including the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck.

“This is our defining moment,” said Fain during a livestream on Thursday night, less than two hours before the strike was set to begin.

Fain said he would join the picket line at the Wayne plant when the action began at midnight and did not rule out broadening the strikes beyond the initial three targets. “If we need to go all out, we will.”

The UAW has a $825m strike fund that is set to compensate workers $500 a week while out on strike and could support all of its members for about three months. Staggering the strikes rather than having all 150,000 members walk out at once will allow the union to stretch those resources.

A limited strike could also reduce the potential economic damage economists and politicians fear would result from a widespread, lengthy shutdown of Detroit Three operations.

Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data.

But a week-long shutdown at Stellantis’ Jeep plant in Toledo could cut revenue by more than $380 million, based on data from the company’s financial reports.

“If the negotiations don’t go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two,” said Sam Fiorani, a production forecaster at Auto Forecast Solutions.

He estimated the limited action would stop production of about 24,000 vehicles a week.

Among the union’s demands are a 40% pay increase, an end to tiers, where some workers are paid at lower wage scales than others, and the restoration of concessions from previous contracts such as medical benefits for retirees, more paid time off and rights for workers affected by plant closures.

Workers have cited past concessions and the big three’s immense profits in arguing in favor of their demands. The automakers’ profits jumped 92% from 2013 to 2022, totaling $250bn. During this same time period, chief executive pay increased 40%, and nearly $66bn was paid out in stock dividends or stock buybacks to shareholders.

The industry is also set to receive record taxpayer incentives for transitioning to electric vehicles.

Despite these financial performances, hourly wages for workers have fallen 19.3%, with inflation taken into account, since 2008.

The Biden administration is reportedly considering emergency aid for smaller supply firms to the automaker manufacturers due to the strike, and president Biden spoke to Fain on the status of negotiations on Thursday.

Ford said in a statement the UAW’s latest proposals would double its US labor costs. A walkout could mean that UAW profit-sharing checks for this year will be “decimated,” the company said.

GM and Stellantis declined to comment ahead of the midnight strike deadline.

However in an earlier video GM’s top manufacturing executive Gerald Johnson said that the UAW’s wage and benefits proposals would cost the automaker $100 billion, “more than twice the value of all of General Motors and absolutely impossible to absorb.” He did not detail how the union proposals would result in that cost, or over what time frame.

And in an appearance on CNBC on Thursday evening, Ford CEO Jim Farley also criticized the union, claiming, “there’s no way we can be sustainable as a company,” if they met the union’s wage demands.

GM CEO Mary Barra also said in a letter to employees about the status of negotiations and the company’s latest offer to the union, “Remember: we had a strike in 2019 and nobody won.”

The contract fight has garnered significant support from the public and US labor movement. Drivers represented by the Teamsters have pledged not to cross the picket line, halting deliveries of vehicles from the automakers throughout the strike. Several labor unions, environmental, racial and social justice groups have publicly announced support for the UAW in their fight for new contracts.

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