Detroit Three under pressure to progress UAW talks, avoid wider auto strikes

[September 21, 2023]  By Hyunjoo Jin

(Reuters) - The United Auto Workers (UAW) and the Detroit Three automakers on Thursday have a final full day to make significant progress on a new contract before the union plans to otherwise announce an expansion of its U.S. strikes.

The standoff is fueling worries about prolonged industrial action that could disrupt production and ripple through the supply chain and dent U.S. economic growth.

The UAW last week launched unprecedented, simultaneous strikes at one assembly plant each of General Motors, Ford and Chrysler parent Stellantis.

Stellantis on Wednesday joined GM and Ford in furloughing some employees at other factories because of the ripple effects of the strikes, including parts shortages, storage constraints and other issues.

UAW President Shawn Fain said in a video released late on Monday that he would announce an expansion of the strikes at 12 p.m. EDT on Friday (1600 GMT), barring "serious progress" in talks.

"We're not waiting around. And we're not messing around," he said at the time.
 

UAW workers are expected to rally at one of Ford's two Louisville, Kentucky assembly plants on Thursday evening in support of workers striking at other plants.

The city is home to Ford's Louisville assembly plant and its Kentucky truck plant. Ford CEO Jim Farley has previously said the Kentucky truck plant, which assembles F-Series trucks, is the company's most profitable plant globally.

Analysts expect plants that build high-margin pickup trucks such as Ford's F-150, GM's Chevy Silverado and Stellantis' Ram to be the next targets if the walkout continues.

Striking United Auto Workers members picket outside the Stellantis Jeep plant in Toledo, Ohio, U.S. September 19, 2023. REUTERS/Rebecca Cook/File Photo

Fain has said Detroit automakers have not shared their huge profits with workers while enriching executives and investors.

GM President Mark Reuss on Wednesday rejected claims by the union that the record profits automakers make go toward fueling "corporate greed," saying they have been reinvested in electric vehicles as well as gasoline-powered cars.

In the opinion piece published in the Detroit Free Press, Reuss also called UAW's demands for a 40% pay hike "untenable," signaling the two sides remain far apart over the key issue.

The three automakers have proposed 20% raises over 4-1/2 years.

UAW workers also want to end a tiered wage structure that they say has created a large gap between newer and older employees, forcing some to work two jobs to make ends meet.

S&P said the strikes were highly likely to last several weeks, potentially cutting third-quarter U.S. gross domestic product by 0.39% and causing "upheaval" across global automotive supply chains.

The ongoing walkout at mid-sized truck factories benefits rival Toyota Motor, which does not have unions at its U.S. factories and is about to launch redesigned Tacoma pickup trucks, S&P added.

Tesla investors have said a potential hike in wages and benefits at Detroit competitors would widen the EV giant's labor cost structure advantages.

(Reporting by Hyunjoo Jin in San Francisco; Editing by Jamie Freed)

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