Detroit strike could be the most ambitious US labour action in decades
Car workers union outlines ‘confusion’ strategy at US plants if no pay deal is struck
US carmakers and union negotiators offered little hope on Thursday of a deal to avoid a midnight walk-off that would be the United Auto Workers’ (UAW) first concerted strike against the Detroit Three manufacturers.
The UAW on Wednesday outlined plans for strikes targeting individual, undisclosed US plants if agreements are not reached by 11.59pm Eastern Daylight Time on Thursday, rather than a full walkout.
“To win, we’re likely going to have to take action,” UAW president Shawn Fain said on Wednesday.
Fain said the Detroit Three had offered 146,000 US carworkers pay raises of as much as 20% over four-and-a-half years, but he blasted the proposal as inadequate even as carmakers protested that the union had not yet responded formally to their latest offers. The union seeks 40% raises and major benefits improvements.
Fain outlined a strategy to “create confusion” with work stoppages targeting individual US plants if no deal is reached.
Stopping work at a key engine or transmission plant, for instance, could have a cascading effect by depriving other factories of parts they need to produce vehicles. Another option would be to strike profitable pickup truck or SUV assembly plants.
Co-ordinated strikes would represent arguably the most ambitious US labour action in decades and could affect US economic growth, depending on how long they last. Fain said it is still possible that all of the automotive workers could strike at a later date.
A full strike would hit earnings at each affected carmaker by about $400m to $500m a week assuming all production were lost, Deutsche Bank estimates. Some losses could be recouped by boosting production after a strike, but that possibility fades as a strike extends to weeks or months.
US President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future”, White House economic adviser Jared Bernstein said on Wednesday. A prolonged strike could pose political problems for Biden.
Ford Motor has proposed a 20% pay hike over the contract term, General Motors 18% and Chrysler parent Stellantis 17.5%, Fain said. That is less than half the pay hikes the union wants, but higher than initial company offers.
GM and Stellantis said they have received responses to their latest offers. Ford said that during bargaining it received no “genuine counteroffers from the union”. GM said it continues “to bargain directly and in good faith with the UAW”.
Warning of a grim scenario, Ford said: “The future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome.”
The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and extra cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.
Fain said carmakers rejected the pension, 32-hour work week and other benefits sought. He criticised proposed changes to profit sharing that would cut payments to workers.
The UAW said it is planning a rally in Detroit on Friday that will include Fain, Sen Bernie Sanders and other members of the US Congress, coinciding with a first of day of expected walkouts.
Reuters