Strike starts at three US automakers

Strike starts at three US automakers

On Thursday, the United Auto Workers contracts expired at 11:59 PM ET. The contracts covered 145,000 UAW members at three companies: General Motors, Ford and Stellantis, which build vehicles under the Jeep, Ram, Dodge and Chrysler brands for North America.

With no deal reached by the contract expiration, the union said it has started targeted strikes against three facilities - one at each company.

Now that the strike has started, here's what to know.

The UAW President Shawn Fain announced yesterday that workers at GM plants in Wentzville, Missouri, a Stellantis plant in Toledo, and a Ford plant in Wayne, Michigan, would go on strike. Workers walked off the job there Friday morning, picketing outside the plants.

These three plants are being out of production of some specific vehicles, including the Ford Ranger pickup and Bronco SUV, the Jeep Wrangler and the Chevrolet Colorado pickup. But the impact could have been much broader, even with only a handful of plants being struck.

The companies operate a multifaceted system of plants that relies on assembling parts from different facilities.

By slowing or stopping the production of a few engine and transmission plants at each company, it could be as effective as a full strike at all plants, according to industry experts.

One engine or transmission location per company could shut down nearly three-quarters of the US assembly plants, said Jeff Schuster, global head of automotive for GlobalData, an industry consultant.

In less than a week, he said, halting the assembly lines would likely happen in less than a week.

A targeted strike for the union offers the possibility of saving resources and extending the possibility of a possible walkout. Striking union members are eligible for $500 a week from the union's strike fund.

If UAW members were to strike at the same time, it could cost the fund more than $70 million a week, draining the $825 million fund.

With targeted strikes, it's possible that the companies may shut down operations and lay off members who are not technically on strike. The union would be able to receive state unemployment benefits instead of strike benefits, which could preserve the union's resources.

Strikers are not eligible for unemployment benefits, but workers who are on temporary layoff can receive the benefits, which differ by state but would be less than the union's $500 strike pay. There are legal questions regarding unemployment eligibility in different states.

Under state law, workers in Michigan and Ohio were not eligible to receive unemployment benefits unless they were laid off because of a strike at their plant. Some other states, such as Tennessee and Kentucky, will be able to receive unemployment benefits, the officials said.

Any worker laid off because the strike disrupted operations at their facility would not be eligible for so-called'sub-pay', which they typically receive during temporary layoffs. Sub pay is far more lucrative, covering most of the gap between unemployment benefits, usually less than $300 a week, and normal company pay, which can be close to $1,300 a week.

The union is determined to ensure that layoff members receive their benefits at their remuneration.

All three companies said they are now offering a 20% increase during the life of the contract, with a 10% raise at the start. The union began with a request for an immediate 20% increase, and four additional raises of 5% each over the course of a four-year deal.

And all the automakers issued statements saying they wanted to reach tentative labor deals to end the strikes as soon as possible.

Mary Barra, GM's CEO, sent a letter to his employees yesterday saying the company's offer now includes a 20% raise, with an immediate 10% pay hike. But he said meeting the union's demands of close to a 40% raise, along with a four-day work week and other benefit improvements, would have been unaffordable.

The union has apologised to Farley for the lack of progress in the negotiations. The union has accused the companies of waiting until the end of August or early September to make their first counteroffers.

The union came up with the 40-percent raise, based on the increase in CEO pay at the three automakers over the last four years. Ford CEO pay rose 21%, from $17 million for Farley's predecessor Jim Hackett in 2019, to $21 million for Farley last year.

The union has maintained that the auto firms can all meet their demands because of their record or near-record profits.

Stellantis is adapting to a growing workforce of lower-paid workers, which is better than other automakers. The union is grappling with the issue of reducing or at least limiting the use of temporary workers.

And there is more anger at Stellantis than at other automakers, said Art Wheaton, director of labor studies at Cornell University's Industrial and Labor Relations School in Buffalo. The members of the UAW who are angry at the corruption scandal that resulted in two recent UAW presidents going to prison are also angry with Stellantis. Fain, who campaigned for the first time in five months, waged to become the first elected union president, a pledge to prevent corruption within the union.

Even before he was elected, Fain worked for Chrysler and was involved in contentious labor negotiations with the company.