Detroit’s Big Three automakers, Ford, General Motors, and Stellantis, have failed to reach a new labor agreement with employees represented by the United Auto Workers (UAW). This has resulted in the expiration of their contract at midnight on Thursday and the start of one of the largest strikes in the U.S. in years.
UAW President Shawn Fain announced in a Facebook Live address that employees at three major factories would immediately be walking off the job. These factories include a GM assembly plant in Wentzville, Missouri, a Ford assembly plant in Wayne, Michigan, and a Stellantis assembly complex in Toledo, Ohio. Roughly 12,700 employees at these facilities will participate in the labor actions and will be paid around $500 a week from the UAW’s $825 million strike fund.
While negotiations between the automakers and the UAW have stalled, Fain warned that workers at other plants may also walk out if further talks do not progress. He stated that bargaining is not expected to take place on Friday but there is a possibility of returning to the table on Saturday.
This strike is the first at the Detroit automakers since workers walked out on GM in 2019. Dozens of workers gathered outside the Ford plant in Wayne as the deadline approached, with a mass rally planned for Friday afternoon in downtown Detroit.
Strategically, the UAW has targeted only three plants to give them flexibility in potentially stopping work at other facilities when negotiations resume. Benjamin Salisbury, an automotive industry analyst, explained that this approach also allows the UAW to preserve their strike fund.
The UAW’s demands include a 36% pay increase over a four-year contract, pension benefits for all employees, limited use of temporary workers, more paid time off, including a four-day workweek, and increased job protections. The automakers have made multiple offers in recent weeks, but talks have reached an impasse.
In response to the strike order, Stellantis expressed disappointment and stated that they would take necessary actions to protect their operations. GM CEO Mary Barra emphasized that the company negotiated in good faith but cannot meet all of the UAW’s demands due to the need for aggressive investments in new products, particularly electric vehicles.
Leaders of the Big Three automakers assert that they have made reasonable counteroffers and are willing to continue negotiations. They cite the need to keep costs and car prices low to compete with Tesla and foreign car makers, especially in the electric vehicle market.
Analysts warn that the strike could disrupt the domestic auto industry, leading to higher car prices and causing nearly $6 billion in losses in wages and earnings. This could also result in a reduction of overall U.S. economic growth by up to 0.3%.
As the strike continues, its impact on the industry and the economy will be closely monitored.