Midnight strike deadline looms large for Detroit car giants

Detroit was on edge Thursday as the auto workers union stood poised for an historic strike of “Big Three” automakers as a midnight deadline approached. Negotiations were set to continue throughout Thursday, but a fiery presentation by United Auto Workers (UAW) President Shawn Fain set the stage for a likely stoppage after midnight going into Friday morning with the expiration of contracts at General Motors, Ford and Stellantis. Barring a last-minute agreement with one or more of the companies, the union plans to announce at 10:00 pm Thursday which locals will participate in the strike, with the majority of workers remaining on the job, Fain said late Wednesday.

A General Motors spokesman said Thursday at midday that the company had put in another offer that morning. “We remain in continuous, direct, and good faith negotiations with the UAW,” GM said. “Any disruption would negatively impact our employees and customers, and would have an immediate ripple effect across our communities.

” Ford has said it still has not received an official response to its prior offer. “We want to negotiate but we have not received a counteroffer yet,” a Ford spokeswoman said. Stellantis did not immediately respond to a request for fresh comment.

The company said Wednesday night its “focus remains on bargaining in good faith to have a tentative agreement on the table before the collective bargaining agreement expires. ” In his presentation Wednesday, Fain described the plan of a gradually expanding strike as aiming to keep the companies off balance and maximize the union’s bargaining position. Fain, decrying a long stretch of labor defensiveness, said the current moment constitutes a turning point for the union akin to the 1930s.

Then, a sitdown strike that originated in Flint, Michigan helped catalyze the UAW. The 2023 version is the “standup strike,” Fain said. “It is long past time to stand up for the working class, to stand up for our communities and to stand up against unchecked corporate greed,” Fain said.

Fain has told local unions to be in a “state of readiness” in case their factories are enlisted in the strike, said Michael Spencer, vice president of UAW Local 1700, which represents 6,000 workers at Stellantis’ Ram factory in Sterling Heights, Michigan. Spencer and other leaders at the union are devising strike plans in which workers would do scheduled five-hour strike shifts, manning the plant’s 14 entrances to create a visible UAW presence. “At the end of the day, nobody wants to strike,” said Spencer, who noted the goal is not to hurt consumers or the company.

“You are trying to shake the table up enough to get their attention,” he said. Spencer said wages have not kept up with the cost of living, which means Stellantis workers cannot afford the vehicles they make. The Ram 1500 pickup begins at between $40,160 and $84,355, depending on the trim level.

Other sticking points include raising pay and benefits for temporary and junior employees at lower tiers who currently make as little as $22 compared with the top hourly rate of $31 an hour. The UAW’s demands include a 40 percent hike in wages, which Fain has said is needed to match rises in CEO pay. Thus far, while the “Big Three” automakers have not matched that level, they have offered double-digit increases.

A note from analysts at JPMorgan Chase predicted that higher costs would be passed on to consumers in increased retail prices as the manufacturers seek to protect profits. But elevated prices will limit new auto sales and “further push out the recovery in used supply and keep prices elevated,” the JPMorgan note said. “The most probable outcome, it seems to us, is that consumers continue to extend vehicle ownership.

” Jessica Caldwell, head of insights at , said the three automakers have a different calculus based on vehicle inventories. Loftier supplies at Stellantis, formerly known as Fiat Chrysler, would allow it to weather a strike “a little bit better” than the other two companies, where inventories are somewhat improved from last year, but not especially high because of lagging effects from the semiconductor shortage. Analysts have said a lengthy strike would put pressure on suppliers, who might be forced to lay off workers in a move that could slow a recovery when the strike ends.

The worst-case scenario would be a lengthy strike at all three companies, dampening consumer spending and weighing on the economy in the Great Lakes region, Canada and beyond. jmb/dw.