UAW Prepares Targeted Strike to Maximize Pressure on Automakers

United Auto Workers President Shawn Fain is preparing to hit all three Detroit carmakers with targeted walkouts at strategic locations in several states in a play to both maximize the union’s strike fund and sow chaos at the companies.

(Bloomberg) — United Auto Workers President Shawn Fain is preparing to hit all three Detroit carmakers with targeted walkouts at strategic locations in several states in a play to both maximize the union’s strike fund and sow chaos at the companies.

While a work stoppage could still be avoided altogether, the UAW and General Motors Co., Ford Motor Co. and Stellantis NV are approaching a deadline. The union’s current labor contract expires late Thursday night.

If the union and carmakers can’t come to an accord by then, the UAW initially will aim for key plants that would most disrupt day-to-day business and profitability. It would be the first time the union targets plants of all three companies at once.

That would keep carmakers scrambling to cope and wondering what facilities might be targeted next.

Read More: What’s at Stake as US Auto Workers Prepare to Strike: QuickTake

“We are prepared to strike these companies in a way they have never seen before,” Fain said late Wednesday in a Facebook Live broadcast aimed at the union’s 150,000 members. “We are still very far apart on our key priorities.”

By opting not to call an all-out work stoppage — at least initially — the union preserves more of its $850 million strike fund, which could run out in less than two months if workers walked out of every plant at all three companies. 

Shares of the automakers were little changed in early trading Thursday. GM rose 0.3% to $33.77 as of 9:35 a.m. in New York. Ford gained 0.4% and Stellantis fell 0.6%. 

Careful Aim

Fain may aim to avoid strikes at factories that would result in closures at non-striking plants. That type of knock-on affect could prevent workers at those facilities not targeted from getting strike pay or unemployment benefits in many states. The union could potentially decide to pinch production of the highest profit margin models such as full-size SUVs and trucks.  

It may also strike parts distribution centers, which would leave dealers short of parts to repair vehicles that are already owned by customers, said Art Wheaton, a labor relations professor at Cornell University. 

Fain said the final decision on which plants are targeted will be made shortly before the announcement to strike. That leaves automakers with limited means to plan for lost production. The UAW isn’t extending its current contract, so workers at plants that aren’t striking will work under expired agreements.

Read More: Japanese Parts Maker Frets Over Supply-Chain Hit From UAW Strike

“We’re here, we’re ready to negotiate, but it’s sure hard to negotiate a contract when there’s no one to negotiate with,” Ford Chief Executive Officer Jim Farley said late Wednesday on the sidelines of a Mustang press conference at the Detroit Auto Show. “The future of our industry is at stake and we want to build it with the UAW, but we’re not sure what’s happening.

Farley said the union hasn’t made “a serious counter-offer” to any of Ford’s four proposals.

GM said it has presented the UAW with “strong offers,” including guaranteed pay increases and a shorter progression to the top wage bracket, according to a spokesman for the carmaker. Stellantis is awaiting a response to an offer it presented to the UAW Tuesday, a spokesman said by email. Both companies said they’re continuing to bargain in good faith.

Economic Issues

The UAW and three automakers are still hashing out key economic issues, including pay raises, cost-of-living adjustments — or COLA — pensions for newer workers and job security at select factories. Both the union and the companies have amended their offers as they try to reach a deal, but still aren’t in full agreement.

The union lowered its pay demand from 40%, which comes to 46% once raises are compounded, to 36%. Ford had offered to reinstate COLA for the first time in 14 years, but Fain said the formula offered wasn’t good enough. Still, the volleys show that both sides are budging from their opening offers.

Fain said the union proposed 90-day progression to the top pay rate and to restore pensions and retiree health care for all workers. He said the three companies agreed to cut the path to full pay to four years. All three rejected pension and retiree health proposals for workers hired after 2007. 

On pay, Fain said Ford proposed 20% raises over four years, while GM offered 18% and Stellantis 17.5%.

He said all three companies proposed different COLA programs, but none were satisfactory. He added that all three companies are trying to cut profit-sharing. He said Ford’s would have been a 21% smaller check for last year and GM’s would have cut the payment by 29%.

Read More: Auto Workers’ Thirst for COLA Aims to Eliminate Inflation Woes

The union president also complained that Stellantis wants the right to close and sell 18 different facilities in the US.

“I’m at peace with the decision to strike if we have to because I know we’re on the right side of this battle,” Fain said. “It’s a battle of the working class against the rich.”

–With assistance from Gabrielle Coppola.

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