Leaders of the United Auto Workers union are considering targeted strikes at a small number of factories run by each of Detroit’s three automakers if they can’t reach contract agreements by a Thursday night deadline.
The union’s leadership discussed smaller-scale strikes at a meeting on Friday, and local union leaders were told about the strategy on Tuesday afternoon, two people with knowledge of the moves said.
The people didn’t want to be identified because they weren’t authorized to disclose details until President Shawn Fain updates workers Wednesday afternoon in a Facebook Live appearance.
At the Tuesday meeting, Fain didn’t say whether the union would target vehicle assembly plants or component factories, one of the people said. Strikes at parts plants could force production halts at multiple assembly factories. He also didn’t say how many workers would walk off their jobs.
The UAW wouldn’t comment Tuesday on its strategy.
Strikes at individual plants would be far less costly to the union, which would have to pay $500 per week to each of its 146,000 members if it strikes against General Motors, Stellantis and Ford at the same time. In that case, the union’s $825 million strike fund would run dry in just under three months, not including payments by the union for health insurance.
The strategy comes as the pace of talks with all three automakers picked up with just two days left before contracts with the union expire at 11:59 p.m. on Thursday.
Both sides are exchanging offers and negotiating long hours. But they still appear to be far apart on wages and benefits.
The union and companies have said they are willing to talk in an effort to work out deals before the deadline. Still, Fain last week said he threw counter-offers from the companies into the trash, and he accused the companies of being slow to make wage and benefit offers.
Yet there was optimism on both sides that they still could reach deals before the deadline.
Ford CEO Jim Farley said Tuesday night that the company submitted a new offer to the union “that’s our most generous offer in 80 years of the UAW and Ford.”
The offer gives pay increases, eliminates different tiers of wages, has protection against inflation and makes bigger contributions to retirement plans. “It’s a significant, significant enhancement,” he said. “I’m still optimistic that we’ll get a deal, but there is a limit."
Farley ruled out a union demand for a 32-hour work week for 40 hours of pay, but said it’s still possible to avoid a strike.
GM President Mark Reuss said Tuesday that a lot of progress had been made in the past few days. “The give-and-take is really happening, so we’re on a path, that’s part of the process,” he said at a Detroit industry gathering hosted by the trade publication Automotive News.
Reuss said GM’s goal is to reward employees while also investing in the future.
Fain, when asked on Labor Day about targeted strikes, said everything is on the table. “We’ve mapped out a lot of different strategies. But it’s really just going to depend on where we are on Sept. 14. That will dictate how we react.”
The union likely will strike at plants that make components for pickup trucks and big SUVs, which are the companies’ main profit centers, said Marick Masters, a business professor at Wayne State University in Detroit.
“They’re trying to impose some hardship on the companies and apply an accelerating level of pressure to encourage them to make an offer which will be acceptable to the rank and file and goes further toward meeting the demands that they have on the table,” he said.
It would make sense for the union to target the companies’ most popular and lucrative products, he said. “You would go after the components that would shut down as many of those product facilities as possible.”
The tactic would force the companies to lay off workers at assembly plants, and they would get unemployment benefits rather than money from the union strike fund, Masters said.
Last known offers from GM and Ford were 10% raises over four years with lump sum annual payments in the years that raises are not awarded. The last known offer from Stellantis, formerly Fiat Chrysler, was raises of 14.5% over four years with no lump sums for wages. All three companies offered lump sums in other areas to cover inflation and a bonus for ratifying a contract.
In addition to general wage increases, the union is seeking an end to varying tiers of wages for factory jobs; a 32-hour week with 40 hours of pay; the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans; and a return of cost-of-living pay raises, among other benefits.
Perhaps most important to the union is that it be allowed to represent workers at 10 electric vehicle battery factories, most of which are being built by joint ventures between automakers and South Korean battery makers. The union wants those plants to receive top UAW wages. In part, that is because workers who now make components for internal combustion engines will need a place to work as the auto industry makes the transition to electric vehicles.
The auto companies say they face tremendous capital expenses as they develop electric vehicles and prepare factories to make them, all while still manufacturing cars, trucks and SUVs with internal combustion engines.
The union, however, says the companies are wildly profitable and can afford to give big raises because labor is only a small percentage of the price of a car. The companies collectively posted net income of $164 billion over the past decade, $20 billion of it this year.