UAW expands strike at GM, Stellantis but reports progress in talks at Ford

New York
CNN
 — 

The United Auto Workers union is expanding its strike against GM and Stellantis but said that progress in negotiations with Ford means it won’t expand the number of Ford workers on the picket lines.

UAW President Shawn Fain made the announcement on Friday morning. “At noon Eastern today, all parts distributions centers at General Motors and Stellantis will be on strike,” he said. “We will shut down parts distribution until those two companies come to their senses and come to the table with a serious offer.”

But Fain said that there has been significant improvement in offers from Ford and that is the reason the strike will not be expanded there.

“We do want to recognize that Ford is serious about reaching a deal,” he said. “Stellantis and GM in particular are going to need some serious pushing.”

The strike will now expand to GM’s and Stellantis’s 38 parts and distribution centers spread across 20 states. The distribution centers generally send parts to dealerships to be used for repairs, so the move could quickly cripple dealerships ability to do repairs, which is the most profitable part of their business.

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

“Today’s strike escalation by the UAW’s top leadership is unnecessary,” the company said in a statement Friday. “We have contingency plans for various 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.”

Stellantis also expressed disappointment with the union’s actions.

“We question whether the union’s leadership has ever had an interest in reaching an agreement in a timely manner. They seem more concerned about pursuing their own political agendas than negotiating in the best interests of our employees and the sustainability of our US operations given the market’s fierce competition,” said the statement. “The fact is, we made a very competitive offer yesterday….And yet, we still have not received a response to that offer. We look forward to the UAW leadership’s productive engagement so that we can bargain in good faith to reach an agreement.”

Still, the announcement of progress at Ford raised hopes that the strike, at least at there, could be brought to a relatively quick end. Before Friday, there had been few public signs that the union and management of the three companies were anywhere close to an agreement.

“Ford is working diligently with the UAW to reach a deal that rewards our workforce and enables Ford to invest in a vibrant and growing future,” Ford said in a statement. “Although we are making progress in some areas, we still have significant gaps to close on the key economic issues. In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success.”

The announcement comes just days after Ford reached a tentative deal with the Canadian union Unifor, which averted a strike by more than 5,000 autoworkers in that country that would have shut down its three factories there.

While the strike will continue at the three assembly lines already on strike – a Ford truck plant in Wayne, Michigan, a GM plant in Wentzville, Missouri and the Stellantis in Toledo – there will be no additional factories added, only the parts distribution centers. But that will create great pressure on GM and Stellantis from their network of dealerships. Stellantis sells cars in North America under the Jeep, Ram, Dodge and Chrysler brands.

The union had started the strike on September 15 with strikes at only three of the companies’ 25 US assembly plants, having about 12,700 of its 145,000 members at the traditional “Big Three” walk off early that morning.

About 5,625 UAW members work at the new strike targets announced on Friday. That will bring the grand total of UAW members who will be on strike to just over 18,300. And the strike will now range from coast to coast, with workers at facilities from Virginia to California walking out.

Dealerships and repair centers

The new strikes are specifically aimed at hurting dealerships.

The Big Three car dealerships are not owned by the Big Three companies themselves. Instead, they’re individual franchisees that purchase cars from the manufacturers and then sell them onto customers.

Simply selling cars isn’t how those dealerships make a lot of their money, however: The dealerships make a lot of their money from the mechanics in the service centers. Every time a car needs to be repaired, it likely needs a new part, and many drivers bring their cars right into the dealerships to be serviced especially while still under warranty.

But the UAW’s expanded strike is now targeting the parts distribution centers for GM and Stellantis. Without new parts being sent to service centers, the dealerships will soon start running out, potentially forcing them to turn away repairs for cars, and heaps of potential revenue.

Without that additional revenue pouring in, the dealership owners themselves could start ratcheting up the pressure on GM and Stellantis to start making concessions to their workers, much in the way Ford has.

Ford, which has made concessions on everything from eliminating wage tiers to job security, will see its dealership service centers likely operating as normal.

This is the first time the union has struck all of the Big Three automakers at the same time. Traditionally it has picked one company at a time as a target for its job actions. And most often, it has had all the workers at that company going on strike at the same time.

The union insists it is better to go with this new strategy of targeted strikes that disrupt operations but raised the possibility of additional action in the future if the companies do not meet their demands.

During Friday’s announcement, Fain made reference to “maintaining our flexibility and our leverage to escalate as we need to.”

The union began negotiations demanding an immediate 20% raise for its members and a total of 40% in wage hikes during the four-year life of the contract.

It also wants to roll back a number of the concessions the union gave up during negotiations in 2007 and 2009 when Ford was nearly out of cash and GM and Stellantis predecessor Chrysler were both on their way to bankruptcy and federal bailouts.

Among those concessions it wants reversed: The UAW wants the companies to offer traditional pension plans and retiree health care for workers hired since 2007, which are now only available to more senior employees. It is also demanding a resumption of cost of living adjustments to protect workers from rising prices, as well as the end of a lower tier of wages and benefits for workers hired since 2007.

Heading into Friday, the companies are on record each offering raises of about 20% during the life of the contract, including immediate raises of about 10%.

But despite the companies making record or near-record profits, they say the union demands are not affordable and would place them at a severe competitive disadvantage compared to their nonunion rivals, including Tesla and foreign automakers operating US plants.

As of 2:15 pm ET, shares of GM (GM) were down 0.5%, Stellantis (STLA) was little changed and Ford (F) shares were up 2.2%.