Oct 28 (Portal) – The United Auto Workers on Saturday expanded its strike against General Motors (GM.N) to include its Spring Hill, Tennessee, engine plant, a move that could bring GM’s major pickup truck production to a halt and could increase financial problems.
The extension of the seven-week strike leaves GM the only Detroit automaker without a contract agreement. Chrysler owner Stellantis (STLAM.MI) settled with the UAW on Saturday and with Ford (FN) on Wednesday.
Those agreements gave workers a record 25% wage increase over the 4 1/2-year contract and allowed the companies to restart their profitable truck assembly lines.
At GM, people familiar with the negotiations said sticking points in the UAW negotiations include pension benefits and issues related to contract workers. GM has more retirees than Ford or Stellantis, and increases in pension benefits for workers hired before 2007 cost GM more than its competitors.
“We are disappointed by GM’s unnecessary and irresponsible refusal to reach a fair settlement,” UAW President Shawn Fain said in a statement to Portal.
GM said in a statement that two of its major pickup plants could be affected by the Spring Hill strike and that it wanted to reach an agreement quickly.
The UAW is already striking GM’s Arlington, Texas, assembly plant, which makes the Chevy Tahoe, Suburban and Cadillac Escalade. GM said earlier this week that this strike would cost the company $400 million a week.
The Spring Hill plant, which employs 4,000 people, supplies engines to nine assembly plants that build several of the automaker’s best-selling and most profitable vehicles.
UAW attorney Benjamin Dictor said in a social media post: “Imagine if everyone but you builds trucks. If everyone else could do it, what does that say about you?”
No further discussions are expected Saturday and it is unclear when GM and UAW would meet again, sources familiar with the matter said.
STELLANTIS OFFER
The deal with Stellantis follows a pattern set by the UAW and Ford. Taking into account compound interest and cost of living, the agreements will result in total salary increases of more than 33%. The contracts start with an initial increase of 11%.
“We look forward to welcoming our 43,000 employees back to work and resuming operations,” Stellantis said Saturday.
[1/3]United Auto Workers President Shawn Fain speaks to the audience during a rally in support of striking UAW members in Detroit, Michigan, U.S., September 15, 2023. Portal/Rebecca Cook/File Photo Acquire License Rights
The Ford and Stellantis agreements must be ratified by all workers.
US President Joe Biden said in a statement that the Stellantis contract was “a testament to the power of unions and collective bargaining to create strong middle-class jobs.”
The deal includes an agreement to reopen Stellantis’ assembly plant in Belvidere, Illinois, which will now build midsize trucks, Fain said in a video on social media. The trucks could compete with Ford’s Ranger models and GM’s Chevrolet Colorado and GMC Canyon.
The factory had previously closed and became a rallying point for the union’s collective bargaining campaign. Stellantis also agreed to build a battery factory next to the Belvidere plant, the UAW said.
Illinois Gov. Jay Pritzker called the agreement a “huge win for Illinois” and said the state would offer incentives to offset the automaker’s costs.
Stellantis will also keep open two facilities that were at risk of closure – an engine manufacturing complex in Trenton, Michigan, and a machining plant in Toledo, Ohio, Boyer said.
In total, the automaker has pledged $19 billion in new investments in U.S. operations and the creation of 5,000 jobs, compared to previously planning to cut 5,000 jobs, Fain and Boyer said.
The UAW won the right to strike over product investment decisions, Fain said.
INCREASED COSTS
Fain accused Detroit automakers of enriching executives and investors while neglecting workers and said the UAW’s success will help workers across the country.
The companies argued that the UAW’s demands would significantly increase costs and put them at a disadvantage compared to electric leader Tesla (TSLA.O) and foreign brands such as Toyota Motor (7203.T), which are not unionized.
Ford expects the new contract to increase labor costs by $850 to $900 per vehicle. According to analysts, Tesla already had a labor cost advantage of around $20 an hour.
The UAW negotiations coincided with high-profile labor campaigns by striking Hollywood writers and actors and workers at delivery giant UPS (UPS.N). With staff shortages in many companies, the labor movement appeared to be revitalized after decades of decline.
The contract negotiations caught the attention of Biden and his Republican rivals, who view Michigan and other prominent auto-producing states as central to their 2024 campaign strategies.
Editing by David Shepardson and Joseph White; Additional reporting by Mrinmay Dey in Bengaluru and Jeff Mason in Delaware; Writing by Sayantani Ghosh; Editing by David Gregorio, Peter Henderson and Cynthia Osterman
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