Auto Workers Strike: U.A.W. Halts Work at 3 Plants in Contract Fight With Automakers (2024)

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The strike’s repercussions could prove far-reaching.

The union’s four-year contracts with three automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — expired Thursday, and the companies and the union remained far from striking new deals.

The U.A.W.’s president, Shawn Fain, used sweeping language on Thursday to describe why his members were going on strike against all three automakers at the same time — something the union had never done in its nearly 90-year history.

“This is our generation’s defining moment,” Mr. Fain, the union’s first leader elected directly by members, said in an online video. “The money is there, the cause is righteous, the world is watching, and the U.A.W. is ready to stand up.”

The union and the companies did not negotiate on Friday, but the U.A.W. said it planned to resume bargaining on Saturday. President Biden dispatched two senior administration officials to Detroit on Friday to encourage the companies and union to reach agreements.

At a Ford plant in Wayne, Mich., west of Detroit, strikers waved placards — one read, “Record Profits; Record Contracts” — and gave thumbs-up to honking vehicles. A metal sign on a chain-link fence read, “Absolutely NO foreign cars allowed.” The protesters were assigned to a six-hour shift on the picket line. If the strike continues, they will be called to one shift per week.

While first and foremost a battle between autoworkers and automakers, the conflict could have far-reaching consequences. A lengthy strike would reduce the number of new cars available for sale, which could fuel inflation and force the Federal Reserve to keep interest rates high.

A strike also presents a quandary for Mr. Biden, who has called for rising incomes but must also be mindful of the strike’s economic impact and his goal to promote electric vehicles as a solution to climate change.

Speaking at the White House on Friday, the president strongly supported the union. “Over the past decade, auto companies have seen record profits, including in the last few years, because of the extraordinary skill and sacrifices of U.A.W. workers,” he said. “But those record profits have not been shared fairly.”

The U.A.W. says its pay demands roughly correspond to the increases in the compensation of the top executives at Ford, G.M. and Stellantis. The raises are also meant to help compensate workers for the ground they have lost to inflation and big concessions the union made to the automakers after the 2007-8 financial crisis, when G.M. and Chrysler were forced to restructure themselves in bankruptcy court.

But auto executives say they already pay production workers substantially more than rivals, like Tesla and Toyota, whose U.S. workers are not unionized. The companies also contend that such big raises would undermine their efforts to develop electric vehicles and remain relevant as the industry makes a difficult and costly shift from gasoline cars and trucks to electric vehicles.

If unions got all that they were asking for, “we would have to cancel our E.V. investments,” Jim Farley, the chief executive of Ford, said in an interview on Friday. Instead, Ford would need to concentrate on large sport utility vehicles and pickups that generate the most profit, he said.

Ford, which employs the most union members, reported a profit of $1.9 billion in the second quarter, equal to 4 percent of its sales. Tesla made $2.7 billion in the same period, about 11 percent of its sales.

Mr. Farley sounded pessimistic about the chances of agreeing on a contract soon. “They are not negotiating in good faith if they are proposing deals that they know are going to crater our investments,” he said.

Mr. Fain’s decision to shut down just three factories is a departure for the union, which in previous strikes typically walked out of all the factories of a single automaker. By interrupting production of some of the most profitable vehicles, while allowing most plants to keep operating, the union hopes to inflict pain on the carmakers while allowing most of its members to continue collecting paychecks.

But it may be difficult for the union to limit the damage to its members’ incomes. Ford told workers at a facility in Michigan, who were not on strike, to stay home Friday because of parts shortages caused by the strike. G.M. said it would probably lay off 2,000 workers at a factory in Kansas next week because of a lack of parts produced at the factory near St. Louis that is on strike.

Fewer than 10 percent of the nearly 150,000 U.A.W. members at the three companies are on strike. Limited strikes could allow the union to maintain the pressure longer by preserving its strike fund of $825 million. The union will pay striking workers $500 a week and cover their health insurance premiums.

In addition to the Ford plant in Michigan, which makes the Bronco and the Ranger pickup truck, and the G.M. plant in Wentzville, Mo., which makes the GMC Canyon and the Chevrolet Colorado, workers shut down a Stellantis complex in Toledo, Ohio, that makes the Jeep Gladiator and Jeep Wrangler. If no agreement is reached, the union is expected to target additional factories in weeks to come.

The union is also seeking cost-of-living adjustments that would protect workers if inflation flares up again. And it wants to reinstate pensions that the union agreed to do away with for newer workers after the financial crisis, improved retiree benefits and shorter work hours. The union also wants to eliminate a wage system that starts new hires at much lower wages than the top U.A.W. pay of $32 an hour.

As of Friday last week, the companies had offered to raise pay by around 14.5 percent to 20 percent over four years. Their offers include lump-sum payments to help offset the effects of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about a third less than veteran union members.

In a last-minute attempt to keep assembly lines running, G.M. offered its employees a 20 percent raise late Thursday and said it was willing to pay cost-of-living adjustments to veteran workers. The 20 percent increase would be far more than employees had received in decades. But the union rejected the offer, which it says would barely compensate for inflation.

Leaders of the automakers have criticized the U.A.W.’s tactics, focusing on Mr. Fain, who became president in March and declared an end to what he said were overly friendly relations between union leaders and auto executives. He took office after a federal corruption investigation resulted in prison terms for two former U.A.W. presidents.

Carlos Tavares, the chief executive of Stellantis, has called Mr. Fain’s strategy “posturing.” Mr. Farley of Ford said the two sides should be negotiating instead of “planning strikes and P.R. events.” And Mary T. Barra, the G.M. chief executive, said that “every negotiation takes on the personality of its leader.”

If the autoworkers are successful, they could inspire workers in other industries. Union activism is on the rise: Hollywood screenwriters and actors have been on strike for months, and in August, United Parcel Service employees won their biggest raises ever in a contract negotiated by the International Brotherhood of Teamsters.

“Workers have been squeezed for too long and now are realizing they can do something about it,” said Mijin Cha, an assistant professor at the University of California, Santa Cruz, who studies the relationship between labor’s interests and the fight against climate change. “People see there is a pathway to more economic security and workers do have power together.”

Late on Friday, at an outdoor rally in downtown Detroit attended by several hundred U.A.W. members, Mr. Fain introduced Senator Bernie Sanders, a Vermont independent, who told the crowd: “The fight you are waging here is not just about decent wages and working conditions and pensions in the auto industry. It’s a fight to take on corporate greed.”

The strikes come as auto production is still recovering from the effects of the pandemic, which caused shortages of semiconductors and other components. Car prices and wait times have come down, but dealer inventories remain low and a lengthy strike could eventually make it hard to find popular U.S.-made models.

“We’re not back to speed inventory-wise,” said Wes Lutz, the owner of Extreme Dodge, a car dealership in Jackson, Mich.

Scarcity is not always bad for carmakers. It allowed them to earn higher profit margins during the pandemic. And it would benefit any carmakers that were having trouble moving some models. Pat Ryan, chief executive of the car-shopping app Co-Pilot, said that Stellantis had at least 100 days of inventory for brands like Dodge and Chrysler, and that a strike could help it clear many dealers’ lots.

Still, if prices for popular models rise, that will be yet another speed bump in the Federal Reserve’s road to lowering inflation, and a political liability for Mr. Biden. The president, who has no formal role in the negotiations, said Friday that he had been in touch with union leaders and auto executives, in addition to dispatching the two administration officials to Detroit.

Reporting was contributed by Neal E. Boudette, J. Edward Moreno, Santul Nerkar and Jeanna Smialek.

G.M. and Ford say the strikes will reduce work at other plants.

Ford said it had told 600 workers at its Michigan Assembly Plant in Wayne, Mich., not to report to work on Friday because of parts shortages caused by a strike by workers elsewhere in the factory. The 600 workers assemble vehicle bodies using parts that must be coated in the plant’s paint department, which is on strike.

“Our production system is highly interconnected, which means the U.A.W.’s targeted strike strategy will have knock-on effects for facilities that are not directly targeted for a work stoppage,” Ford said.

The chain reaction in the Detroit automakers’ production networks raises questions about the strategy being pursued by the United Auto Workers as it seeks to win record wage and benefit increases and make up for years of concessions.

The union limited the strikes that began on Friday to three factories operated by Ford, G.M. and Stellantis, the maker of Jeep, Dodge, Chrysler and Ram vehicles. Union leaders hope to inflict pain on the automakers while limiting the hardship from lost wages to their members. In the past, the union typically shut down entire companies.

The plant shutdowns initiated by the carmakers suggest that the pain to workers could be greater than expected.

“We have said repeatedly that nobody wins in a strike, and that effects go well beyond our employees on the plant floor and negatively impact our customers, suppliers and the communities where we do business,” G.M. said in a statement. “What happened to our Fairfax team members is a clear and immediate demonstration of that fact.”

Workers who are temporarily laid off at auto factories because of parts shortages or for other reasons may be eligible for unemployment benefits. Rules vary by state.

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At a Detroit rally, Bernie Sanders cheers on striking workers and condemns ‘corporate greed.’

“The fight you are waging here is not just about decent wages and working conditions and pensions in the auto industry,” Mr. Sanders said. “It’s a fight to take on corporate greed and tell the people on top the country belongs to all of us, not just the few.”

The rally took place along Detroit’s riverfront, near the city’s iconic Renaissance Center towers, home to G.M. headquarters. Also nearby is the Huntington Place convention center, where auto executives were gathering for a black-tie charity ball to kick off the 2023 Detroit auto show.

Several hundred U.A.W. members, most of them clad in labor’s red shirts and waving picket signs, crowded in front of the rally’s small stage. A dozen television cameras were jammed together on another small, raised platform to record the event. As the crowd awaited the first speakers, a sound system blared upbeat anthems like Sister Sledge’s “We Are Family“ and “We’re Not Going to Take It” by Twisted Sister.

Throughout Mr. Sanders’s speech, they erupted into chants of “Bernie, Bernie!”

Mr. Sanders spoke about the growing gap between C.E.O. and worker pay. The U.A.W. has said that one of the driving forces behind its demands for higher pay is the growth in compensation for the top leaders at the Big Three automakers.

Addressing the Big Three leaders, Mr. Sanders said, “Understand, C.E.O.s, the sacrifices your workers have made over the years.”

In a comment directed at Mary T. Barra, G.M.’s chief executive, Mr. Sanders said, “Do you understand what it’s like to live on $17 an hour?” Mr. Sanders went on to make pointed remarks about the growth in compensation for Ms. Barra, as well as Carlos Tavares and Jim Farley, her counterparts at Stellantis and Ford.

Mr. Sanders also lamented the gap in pay between newer and more veteran workers at the automakers. “Time is long overdue to end the two-tiered system,” he said.

Among Mr. Sanders’s talking points was the country’s decline in well-paying union jobs. Mr. Sanders has long railed against the forces that have moved many manufacturing and automotive jobs overseas, including globalization and free trade agreements.

He closed his speech by saying, “Let us all stand with the U.A.W.”

A rise in car prices would hit consumers already facing higher payments.

The Federal Reserve started raising interest rates in March last year to combat inflation, eventually pushing its benchmark rate to the highest level since 2001. That has had an effect on rates for auto loans, which are now about 7.4 percent on average for new cars and 11.2 percent for used cars, according to Edmunds.

“You’re going to get sticker shock in two different ways: the actual sticker price, and the cost of financing that purchase,” said Greg McBride, chief financial analyst for Bankrate, an online service that compares the interest rates of various financial products.

Higher interest rates mean those who can put off buying a new car until next year or later, probably will. High rates were the top factor holding back business for car dealers this quarter, according to a recent survey from Cox Automotive.

Mark Scarpelli, the owner of Raymond Chevrolet in Antioch, Ill., said few people who buy cars from his dealership pay in cash, and more expensive, larger vehicles are increasing in popularity. Still, some buyers cannot wait.

“Our folks are needing that vehicle to get to their jobs, support their families, pick up their son or daughter from day care,” he said. “While, in some cases cars and trucks may be a novelty or third or fourth vehicle, 99 percent of the vehicles we sell are for necessity.”

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Three towns, three plants, three different demographic profiles.

Republicans control the local government in Wentzville and in the surrounding St. Charles County, and former President Donald Trump got about 58 percent of the vote in 2020. The G.O.P. also control the governor’s office and the state legislature in Missouri.

The city’s population is 88 percent white, about 6 percent Black and less than 3 percent Hispanic, according to the most recent U.S. census data. The median household income in the area is nearly $100,000, and just 4 percent of its residents are experiencing poverty.

In Ohio, the auto workers also struck at a Stellantis assembly plant in Toledo, a more diverse city less dependent on the automobile industry.

With about 266,000 residents, Toledo lies on the Maumee River at the western tip of Lake Erie, about an hour’s drive from Detroit, Mich. Sometimes called the Glass City because of its history as a center of the glass industry, Toledo has long been a major port for domestic and international products. The Stellantis plant there employs about 5,800 workers.

The city’s two-term mayor is a Democrat, and Lucas County, where the city is located, voted solidly for President Biden in 2020, giving him nearly 58 percent of the vote. (Mr. Trump won Ohio with 53 percent, and the state currently has a Republican governor and Republican majorities in both houses of the legislature.)

Toledo’s population is 60 percent white, 28 percent Black and 9 percent Hispanic, according to the 2020 census. Its median household income is around $42,000, and about 25 percent of the population is living below the poverty line.

The third walkout took place in Michigan, at a Ford Motor assembly plant in Wayne, a community of about 17,000 people west of Detroit that has a long history of manufacturing automotive and transportation goods. The plant employs 3,300 workers.

Wayne County, which includes Wayne as well as Detroit, is the state’s most populous county. In the 2020 election, 68.4 percent of its voters opted for Mr. Biden, helping him carry the state just over 50 percent of the vote.

According to the last census, Wayne is 70 percent white, 22 percent Black and 3 percent Hispanic. Its median household income is nearly $48,000, and 20 percent of the city is experiencing poverty.

Unlike in Missouri and Ohio, Democrats control the governor’s office and the legislature in Michigan, giving the labor movement a political boost there. In March, the state’s governor, Gretchen Whitmer, signed a workers’ rights restoration bill into law, which was intended to raise wages and increase the size of the middle class.

Before the first speakers stepped on the stage, a sound system blared, upbeat rock anthems like Sister Sledge’s “We are Family“ and “We’re Not Going to Take It” by Twisted Sister. The crowd began buzzing when Senator Bernie Sanders of Vermont arrived and traded his blue blazer for a red U.A.W. jacket with his name embroidered on it.

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The strike falls on a fragile auto supply chain and dealers are worried.

It means that if the strike lasts more than a few weeks, Mr. Lutz and other dealers will end up with fewer cars to sell, and that means they’ll feel pressure to charge more for their inventory.

He keeps enough vehicles on the lot to last him 40 days, but he has prepared for the work stoppage by buying a few more cars than he usually does.

Jeeps make up roughly 75 percent of sales at his dealership, he said. He had 35 of them on his lot as of Friday morning.

“We don’t go a day without selling a Jeep, ever,” Mr. Lutz said. “We’ve got a tight days supply on Jeeps right now.”

Mr. Lutz said he expects to feel the effects of the strike pretty quickly: “It’s going to get pretty scarce after two weeks.”

For car buyers, brands that aren’t affected by the strike — like those made by Toyota and Honda — are possible alternatives, but those companies’ inventories are even more strained than the domestic carmakers, according to data from Edmunds, a market research firm.

“I think there’s a question of how many buyers they could absorb,” said Jessica Caldwell, head of insights at Edmunds. “They’re not necessarily in the best place to take those displaced costumers.”

The strike will also affect mechanics who need to replace specific parts in a vehicle.

The wait time for parts is already impacted by the fragile supply chain, according to Alan Heriford, owner of JoCo Auto Repair in Merriam, Kan. “The timing is horrible,” he said.

It was impossible for him to prepare for the strike, he said, because he does not know until a customer pulls in what parts he needs to order. Some parts he uses are sold by aftermarket sellers, but many are ordered directly from the manufacturers.

“At the end of the day, the customer is mad at me,” Mr. Heriford said. “They have a hard time transferring that anger to the guy on strike or the companies themselves.”

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“We understand that the company has to be in business, and the company has to be making money, and the company has to be profitable, and the company has to be able to invest, and the company has to be mindful of what the future is,” Buchalski said. “We understand those things, but we also understand math.” After concessions during the company’s lean times, including a lower pay tier for new hires, the current starting wage of $16.67 an hour is not far from the $12.91 he made in 1994, he said.

“You look across the 1 percent — people are making so much money,” he added, “and it’s like, you know, we want to protect our future.”

Biden comes out strongly in favor of striking autoworkers.

“Over generations, autoworkers sacrificed so much to keep the industry alive and strong, especially the economic crisis and the pandemic,” Mr. Biden said. “Workers deserve a fair share of the benefits they helped create.”

He added that the automakers “should go further to ensure record corporate profits mean record contracts for the U.A.W.”

Mr. Biden said he was dispatching two of his top aides — the acting labor secretary, Julie Su, and a top economic adviser, Gene Sperling — to Detroit to help the parties return to the bargaining table.

Negotiations have hit an impasse over wages and benefits, with the autoworkers demanding a 40 percent pay increase over four years, an amount that union officials said matches the raises the top executives at the three largest companies have received over the last four years. The automakers have countered with lower offers.

The targeted strike on Friday by some members of the 150,000-member union at three plants is designed to disrupt one of America’s oldest industries at a time that Mr. Biden is sharpening the contrast between what rivals and allies call “Bidenomics” and a Republican plan that the president warns is a darker version of trickle-down economics that mostly benefits the rich.

The strike touches on several planks of the president’s policies: his call for higher wages for the middle class; his unapologetic pro-union stand; his climate-driven push to reimagine an electric vehicle future for car companies — centered in Michigan, a state that he must win in 2024 to remain in the Oval Office.

“Let’s be clear, no one wants a strike,” Mr. Biden said at the White House. “Say it again. No one wants a strike. But I respect the workers’ right to use their options on in the collective bargaining system, and I understand the workers’ frustration.”

The factory was right in the middle of working the kinks out of the assembly process that will produce the new Ford Ranger, said one of the picketers, Sarah Vinson, 42, a fork-lift driver at the plant. “You have to go through so many trials but now it’s all stopped,” she said, shouting to be heard over the passing cars and trucks honking in support of the union.

The other model made at the plant is the Bronco, a rugged and popular sport utility vehicle that returned to Ford’s lineup in 2021.“People have ordered Bronco and have had to wait months to get their truck, and now production has stopped,” Vinson said.

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Scenes on the U.A.W. picket lines.

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President Biden said he was also dispatching two top aides — the acting labor secretary, Julie Su, and a top economic adviser, Gene Sperling — to Detroit to help the parties return to the bargaining table. “Let’s be clear, no one wants a strike,” Biden said. “Say it again. No one wants a strike. But I respect the workers right to use their options on in the collective bargaining system, and I understand the workers’ frustration.”

Where the G.O.P. candidates for president stand on labor and unions.

Donald J. Trump

Former President Donald J. Trump presents himself as a defender of union workers while denouncing union leaders. From the start, he pitched himself as an ally of blue-collar workers. That message helped him make inroads among union members, traditionally a Democratic constituency, though his policy record on labor issues is mixed.

Ron DeSantis

Gov. Ron DeSantis of Florida has approved new restrictions for some Florida unions and opposes minimum wage increases. He signed a bill in May that restricted unions for teachers and other public-sector employees by banning automatic dues deductions from paychecks and letting employees leave a union at any time, among other things. But unions that tend to support Republicans — including those for police officers, firefighters and correctional officers — were largely exempted from the new restrictions.

Tim Scott

Senator Tim Scott of South Carolina has said he wants to “break the backs of the teachers’ unions.” In a statement accompanying the most recent introduction of the National Right-to-Work Act, which he co-sponsored, Mr. Scott said: “American workers — not big labor unions — are the engines of job creation, opportunity and our economy.” The legislation, broadly supported by Republicans, would establish a national ban on unions’ requiring workers to pay dues.

Vivek Ramaswamy

Vivek Ramaswamy, an entrepreneur, has said he wants to eliminate unions for teachers and federal workers. He has campaigned on a staunchly anti-union argument: That many unions are harmful forces undermining America and should not exist. Among the G.O.P. field, only he and Nikki Haley have been as broad and vehement in denouncing unions.

Nikki Haley

Nikki Haley, a former South Carolina governor, calls herself a “union buster.” She has suggested that unions would not exist in her ideal world, one of the most absolutist positions in the field.

Mike Pence

When he was in Congress, former Vice President Mike Pence had a record of moving against union priorities. He voted against raising the federal minimum wage to $7.25 from $5.15. He argued on the House floor in 2007 that raising the minimum wage would cause the loss of entry-level jobs and “hurt the working poor.”

Chris Christie

Chris Christie, a former governor of New Jersey, has attacked teachers’ unions for years but says he is more amenable to private-sector unions. He waged a war with teachers’ unions since he was first elected governor of New Jersey in 2009. He boasted at the first Republican debate in August that he went “right after the teachers’ unions in New Jersey and drove them down to an all-time low popularity rating because they’re putting themselves before our kids.”

Asa Hutchinson

Former Gov. Asa Hutchinson of Arkansas opposed federal incentives for unionization, but his positions are otherwise unclear. He has not spoken in depth about workers’ rights or unions, and his campaign did not respond to questions from The Times about the United Auto Workers dispute before the strike began.

Doug Burgum

Gov. Doug Burgum of North Dakota has criticized federal incentives for unionization, but his positions are otherwise unclear. He has not spoken in depth about workers’ rights or unions, and his campaign did not respond to questions from The Times about the United Auto Workers dispute before the strike began. But in an NBC News interview in July, he mentioned efforts to prioritize unionized companies for government incentives as an obstacle to economic growth.

Will Hurd

Former Representative Will Hurd of Texas has voted against organized labor on some bills in the House, but not spoken in depth about workers’ rights or unions, so his positions are somewhat unclear.

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From Ford Broncos to Jeep Wranglers, the strike targets several popular truck models.

Stellantis’s Toledo plant is the only one in the United States that makes the Jeep Wrangler and Gladiator. More than 84,000 Wranglers and 27,000 Gladiators were sold in the first half of this year in the United States.

Ford sold more than 81,000 Broncos and 30,000 Rangers in the first eight months of the year. Production of Broncos and Rangers at the Wayne plant accounted for nearly 8 percent of the company’s U.S. total production output during that time. The Wayne plant, which opened in 1965, produced more than one million Broncos in its first 30 years of operation.

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I spoke with Wes Lutz, the owner of Extreme Dodge, a car dealership in Jackson, Mich., who said that “we’re not back to speed inventory-wise.” Domestic car inventories are running at less than a quarter of what they were at the end of 2019.

The strike has echoes of previous fights between the union and carmakers.

Some of the issues involved in the current strike were also present in 2019, when the U.A.W. demanded higher wages and an end to a tiered pay structure, whereby newer workers earn less than veteran workers.

The union has frequently gone on strike since its formation in the 1930s. In one of its earliest actions, 2,000 workers occupied General Motors’s Flint, Mich., factory in 1936 to force the manufacturer to bargain with the union. Five years later, Ford became the last of the Big Three automakers to recognize the union, after workers at the River Rouge plant in Michigan walked out.

The most notable U.A.W. strike came in 1970, when more than 300,000 union workers at General Motors walked off the job after the company made demands of the union, including that workers pay for increases in health care premiums. The strike, which lasted for 67 days, won workers a number of concessions, including better pensions and the right to retire after 30 years of service.

The strike cost the company nearly $1 billion in profit and had a significant impact on the U.S. economy: General Motors was a colossus, accounting for 2.3 percent of overall economic output in 1970, according to the Commerce Department, and was a crucial economic engine for a vast supply chain that was disrupted by the stoppage.