The countdown is ticking: Unless a last-minute deal is reached, the powerful UAW union is preparing to announce a strike at America’s three major automakers on Thursday evening that could destabilize the industry and beyond.
In two months of negotiations, representatives of the United Auto Workers and the leaders of the “Big Three” – General Motors, Ford and Stellantis, which control the American Chrysler – could not agree on the content of a new four-year collective agreement.
“We have told companies from the beginning that September 14 (midnight) is a deadline, not a milestone,” UAW President Shawn Fain said Wednesday.
“We will not allow the ‘Big Three’ to delay the discussions for months,” he emphasized.
A General Motors spokesman said midday Thursday that a new offer had been sent to the UAW that morning.
“We continue to engage in direct, good faith negotiations with the UAW,” GM said. “Any disruption would have negative consequences for our employees and our customers and in turn would have an impact on our communities.”
For his part, Ford noted that the union had not gone back on its recent proposal. “We want to negotiate, but have not yet received a counteroffer,” said a spokesman.
Stellantis was contacted by AFP and did not immediately respond.
On Wednesday evening, the company announced that it wanted to “negotiate a draft contract in good faith” before the current collective agreements expire.
The UAW is demanding a 36% wage increase over four years, while the three American manufacturers have gone no further than 20% (Ford), the union leader said.
Detroit’s three historic giants also refused to grant additional vacation days and increase pensions provided from company-specific funds.
“They want to scare Americans by making them believe that the problem comes from autoworkers,” Shawn Fain declared, while blaming “the greed of the leaders.”
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Unless there is an Extremis compromise, the union plans to announce which locations will be affected by work stoppages at 10pm New York time on Thursday (02:00 GMT Friday).
According to the television station CNBC, eight locations of the three companies in Michigan and the neighboring states of Ohio and Indiana could be affected, which could affect 7,000 to 12,000 employees.
The union represents approximately 146,000 Trio employees in the United States.
For Shawn Fain, the movement represents a turning point that he compares to the 1930s, particularly to the General Motors strike in Flint, Michigan, in 1936-1937, the true birth of the UAW, founded in 1935.
The consulting firm Anderson Economic Group (AEG) estimates that a 10-day strike could mean a loss of more than $5 billion for the American economy.
A prolonged social conflict could have political consequences for American President Joe Biden, whose economic record has been criticized, particularly due to stubborn inflation in the USA.
With a little more than a year to go before the presidential election, the head of state is wavering between his stated support for unions and the specter of a blow to the American economy through a strike.
“Consumers and retailers are generally relatively protected from the effects of a short strike,” said AEG Vice President Tyler Theile.
But with inventories just a fifth of what the industry had in 2019 during the last GM strike, they “could be hit much quicker” than four years ago, he said.
“We are entering the fourth quarter, a period in which we have the most sales of pickup trucks and large SUVs, which are very profitable for these three manufacturers,” recalls Jessica Caldwell of the trade site Edmunds.com.
“If they don’t have enough in stock, they miss out on the sale,” she adds.
JPMorgan analysts estimate that a sharp increase in wages would affect vehicle sales prices and encourage drivers to “keep their cars longer” rather than buy a new model.
At around 7pm GMT, shares of GM (-0.35%), Stellantis (-0.82%) and Ford (-0.40%) fell on Wall Street.