[1/6]Members of the United Auto Workers (UAW) strike at a General Motors assembly plant that builds the U.S. automaker’s large sport utility vehicles, in another expansion of the strike, in Arlington, Texas, U.S., October 24, 2023. Portal/James Breeden acquires license rights
Oct 24 (Portal) – The United Auto Workers (UAW) union on Tuesday attacked a General Motors (GM.N) assembly plant in Texas that builds the U.S. automaker’s profitable sport utility vehicles. This is another significant expansion of the strike.
By attacking GM’s Arlington assembly plant, which produces GM’s profitable Chevy Tahoe, Chevy Suburban, GMC Yukon and Cadillac Escalade large SUVs, the UAW has now closed three of the world’s most profitable auto factories. Workers are already picketing at Ford’s (FN) Kentucky Truck heavy-duty pickup plant and Chrysler owner Stellantis’ (STLAM.MI) Ram pickup plant in Sterling Heights, Michigan.
The Arlington strike doubles the weekly cost of the union dispute to $400 million, GM said in a filing Tuesday afternoon. The automaker previously said strikes would cost it $200 million a week.
“We are disappointed by the escalation of this unnecessary and irresponsible strike,” GM said in a statement on Tuesday.
Meanwhile, negotiations are continuing at all three automakers. The UAW has submitted a new contract proposal to Stellantis and is expected to make a counteroffer to GM soon, a person familiar with the process said. Union negotiators are waiting for a new offer from Ford and are holding talks with company negotiators. Ford said its latest offering was “at the limit” of what it could afford and remain competitive.
The union’s strategy of targeted strikes over a 40-day period has cut billions of dollars in revenue for the Detroit Three automakers, while less than half of the 150,000 UAW members at the companies have forfeited pay and picketed. It has also spread, with companies ranging from airlines to auto parts makers coming under pressure.
Earlier Tuesday, GM reported a stronger-than-expected third-quarter profit but withdrew its full-year financial guidance due to uncertainty over the strike.
“Another record quarter, another record year. As we have been saying for months, record profits mean record contracts,” said UAW President Shawn Fain. “It’s time for GM workers and the entire working class to get their fair share.”
On Friday, Fain suggested that a deal could be close but that negotiations could get tougher, calling the talks before a deal “the most difficult part of a strike.”
It’s not clear how far apart the union and the automakers are. Fain said Friday that the Detroit Three had agreed to a 23% wage increase offer and had made progress on other issues.
But Fain told UAW members, “There is more to gain.” GM and Ford had said additional cost-of-living increases would already boost their total compensation offers to more than 30%.
Fain’s decision to demand even more from the Detroit Three than the record wages and benefits they offer is a gamble that automakers will invest even more in future dividends, stock buybacks or capital expenditure budgets to improve the UAW’s wages and benefits. So far, none of the automakers have declared a formal shutdown. But companies haven’t ruled it out.
The decline in the Detroit Three’s profits could also result in smaller year-end profit-sharing checks for UAW workers. In fiscal 2019, GM’s fourth-quarter profit was hit by $3.6 billion due to a 40-day UAW strike that shut down all of the automaker’s U.S. factories.
GM CEO Mary Barra told investors Tuesday that the company “will not accept any contract that is not accountable to our employees and shareholders.”
Company executives said they were increasingly concerned about small and medium-sized suppliers that could face financial difficulties if the UAW strikes cut into their cash flow. Even major suppliers, including Corning and Illinois Tool Works, are warning that the labor dispute in Detroit will hurt their finances.
Thousands of UAW employees in automotive supplier factories are affected. Stellantis on Tuesday laid off 525 workers at a factory that supplies the Ram truck plant, which is now on strike.
After five weeks of strikes, the auto industry’s economic losses topped $9.3 billion, Anderson Economic Group LLC estimated Monday.
Wells Fargo estimated that the UAW’s strike fund would still be $750 million by the end of this week. UAW officials declined to say the size of the fund.
The UAW and automakers are also negotiating future wages and union policies for electric vehicle battery plants planned by joint ventures between the automakers and their South Korean battery partners.
These discussions are complicated because the companies are separate companies and the automakers are not required to cover them under their UAW master agreements under U.S. labor law.
Shares of GM, Ford and Stellantis were little changed on Tuesday, reflecting Wall Street’s view that the UAW talks may be coming to an end.
“The union is playing its cards with the goal of reaching an agreement sooner rather than later,” said Harley Shaiken, a labor professor at the University of California, Berkeley. “The withdrawal of the profitable investments should accelerate the settlement.”
reporting by David Shepardson and Joe White; Additional reporting by Ben Klayman in Detroit; Writing by Sayantani Ghosh; Edited by Chizu Nomiyama, Peter Henderson, Will Dunham and Jonathan Oatis
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