Detroit's strikes become an industrial 'Survivor' game
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[October 03, 2023] By
Joseph White
DETROIT (Reuters) - The United Auto Workers head into the 19th day of
strikes with a bold strategy that places the Detroit Three automakers
into a high-stakes game of "Survivor" with a weekly decision on which
factories the strike will hit next, with layoffs mounting, suppliers
hurting and harsh rhetoric from both sides.
UAW President Shawn Fain has transformed the rituals of contract talks
with General Motors, Ford and Chrysler parent Stellantis into a
high-stakes, made-for-media game. The automakers will look for clues on
how to survive in the agreement the union reached on Sunday with Volvo
Group-owned Mack Trucks.
For now, the union appears to be in control, although there is pain on
both sides. GM and Ford said Monday they were indefinitely laying off
another 500 workers at four Midwestern plants, citing the impact of the
walkouts.
Analysts looking ahead to third-quarter financial results this month are
starting to reckon the costs of what the UAW calls "Stand up strikes."
JP Morgan estimated GM has lost $191 million in operating profit, and
Ford $145 million during the quarter.
Those are large sums, but not in the context of GM or Ford, which have
forecast combined pre-tax profits of up to $26 billion for this year.
The daily cost of the strikes is almost certain to rise weekly, JP
Morgan added. The real pain will start if the UAW orders walkouts at
factories that build Ford, Chevrolet and Ram pickup trucks and large
SUVs such GM's Cadillac Escalade.
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At the current pace, it could take the UAW weeks to get to those
factories.
"We have the power to keep escalating and keep taking plants out," Fain
said in a video address on Sept. 13. "This is going to create confusion
for the companies. This is going to keep them guessing on what will
happen next."
Last Friday, the UAW displayed the effectiveness of its strategy of
launching limited strikes at all three companies at once, rather than
tackling each company one at a time as in the past.
Fain was prepared to order walkouts at one assembly plant for each of
the three automakers. At the last minute, he decided not to order a
strike at a Stellantis factory because the parent of Chrysler offered
new concessions minutes before the union president's scheduled Facebook
Live address.
The previous week, Ford got a pass when it made more favorable job
security and inflation protection proposals. UAW workers at GM and
Stellantis parts depots walked off the job, while Ford's employees kept
shipping parts to dealers.
The rules of the game are clear: For automakers to avoid a wider walkout
and more lost revenue, they must make new steps toward satisfying union
demands by Friday's deadline.
"It is negotiations that are evaluated by the UAW weekly," said Harley
Shaiken, labor professor at the University of California Berkley. "Now,
if you don't give something that the union wants, you will have another
plant on strike."
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![](../images/100323PIX/busine79.jpg)
Striking United Auto Workers (UAW) members from the General Motors
Lansing Delta Plant picket in Delta Township, Michigan U.S.
September 29, 2023. REUTERS/Rebecca Cook/File Photo
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The CEOs of GM and Ford last week accused Fain of misrepreseting the
state of bargaining and spending too much time on television and not
enough at the bargaining table. Both stopped short of accusing the
UAW of bad faith bargaining, but they both accused Fain of putting
the companies and union jobs at risk.
"The UAW is pitting the companies against one another," GM CEO Mary
Barra said in a statement Friday. "But it’s a strategy that
ultimately only helps the non-union competition."
Ford CEO Jim Farley warned that suppliers to the automaker's
Michigan Assembly plant, which builds Bronco SUVs and Ranger
pickups, are on a "knife's edge" with thousands of jobs at risk.
"What’s really frustrating is that I believe we could reach a
compromise on pay and benefits, but so far the UAW is holding the
deal hostage over the battery plants," Farley said.
Ford plans four EV battery plants in the U.S. - three under joint
ventures with South Korean battery maker SK On. The fourth would be
a wholly-owned facility planned in Marshall, Michigan, to build
low-cost lithium-iron batteries with technology from China's CATL.
Technically, the joint venture plants are separate companies not
subject to the labor talks. GM's joint venture battery plants also
have separate status and GM has declined to include them in
negotiations.
Nonetheless, Fain has made an issue of lower wages at the battery
joint ventures. The union seeks to avoid a situation where
non-union, lower-paid battery plant jobs eventually replace
UAW-represented combustion powertrain jobs.
What happens next and when is unclear, by design.
The UAW was holding new bargaining sessions with GM and Stellantis
on Monday. Company bargainers were likely to seek details of the
tentative deal the union struck with Mack Trucks, which if ratified
will significantly increase wages for almost 4,000 UAW members at
the truck maker. The sides agreed just before the Sunday night
deadline, not long after Fain on Friday had blasted the truck maker
of “following the same tired playbook as many of our other
employers.”
(Reporting by Joseph White; additional reporting by Ben Klayman and
David Shepardson; Editing by David Gregorio)
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