The United Auto Workers union on Tuesday halted production at General Motors Co.’s largest U.S. factory, significantly increasing pressure on the major U.S. automaker amid signs that a six-week strike is hurting profits. did.
The union ordered 5,000 workers at GM’s plant in Arlington, Texas, to stop working on the same day GM announced a decline in third-quarter profits, also dealing a blow to Ford Motor Co. and Stellantis. He said the damage was caused by the UAW’s work stoppage. 800 million dollars so far.
The strike in Arlington continued the union’s strategy of targeting some of the automakers’ most profitable vehicles. The Texas plant manufactures large sport utility vehicles such as the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade.
Before Tuesday’s expansion, there were signs that the union and GM were close to a deal. Some analysts said the union’s decision to raise stakes was part of a late-game strategy to squeeze every last bit of money out of the company.
Arthur Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations, said UAW President Sean Fein said “there are still some levers to pull to move companies forward; It’s pulling,” he said. “So I think this is the last push for the union to say to companies, ‘Let’s get this deal done.’”
But companies and unions are still far from reaching an agreement, which could indicate the UAW still has a lot of cards in its hands.
“My gut feeling is that they’re not getting close. This is an opportunity to impose more costs and say, ‘Look, we’ve got to get you guys closer to what we want, right? If you don’t, we’re going to keep doing this,”’ Patricia Anderson said. She is a professor of economics at Dartmouth College.
On Monday, the union raided the Ram pickup truck plant, the largest U.S. factory operated by Stellantis, which also owns Jeep and Chrysler. The UAW also attacked Ford Motor Co.’s largest plant in Louisville, Kentucky, which produces heavy-duty pickup trucks and the Lincoln Navigator SUV.
“Another record quarter, another record year. As we’ve said for months, record profits equal record contracts,” Fein said in a statement. “It’s time for GM workers, and the entire working class, to receive their fair share.”
GM executives said early Tuesday that they hoped to reach a tentative agreement with the union soon. The Texas strike dashed those hopes.
The longer the strike goes on, the greater the risk that it will drag down the U.S. economy and make it harder for consumers to find the cars they want.
Automakers have been keen to point out the ripple effect the strikes are having on other workers. Chrysler and Jeep maker Stellantis said Tuesday it was laying off 525 workers at two Michigan plants in Sterling and Warren that made unnecessary Ram pickup truck parts during a strike that shut down assembly lines. did.
In all, Stellantis laid off more than 2,000 employees due to the strike. According to Ford, the strike resulted in Ford laying off more than 3,000 employees. GM is laying off about 2,500 people, including about 140 people at an Ohio plant making parts for the Arlington plant, who were laid off Tuesday. The company said an additional 3,000 employees at GM suppliers are temporarily out of work due to the strike.
GM said in a statement that it was “disappointed by the unnecessary and irresponsible escalation of the strike.” “This is hurting our team members who are sacrificing their livelihoods, and it is having a negative impact on our dealers, suppliers and the communities that depend on us.”
U.S.-based automaker GM said on Tuesday that the strike was partly to blame for a 7% year-on-year drop in profits. The company reported $3.1 billion in revenue from July to September. The strike, including at a plant in Texas, shut down three of the company’s vehicle plants and 18 spare parts warehouses.
Before the UAW expanded the strike, GM said Tuesday that the work stoppage caused its preinterest and pretax earnings to decline by about $200 million in the final weeks of the third quarter, the most since the fourth quarter began Oct. 1. announced a decrease of approximately $600 million. It estimates losses from the strike could be as much as $200 million a week, but with workers at the Texas plant on strike, that number is likely to rise.
“They are demanding a record contract, and that is exactly what we have been offering for weeks. It’s a deal,” said Mary T. Barra, the company’s CEO. said in a letter to investors. “This is an offer that rewards team members, but does not put the company or their jobs at risk.”
GM is offering employees a 23% pay increase over four years, raising the standard wage for veteran employees from $32 an hour to more than $40 an hour. Wages for new workers will be lower. An employee working 40 hours a week at the highest wage earns about $84,000 a year (excluding overtime and profit-sharing bonuses), which has exceeded $10,000 in the past two years.
Ford and Stellantis have similar proposals.
The union had initially called for a 40% increase, arguing that even more modest increases would not compensate for the decline in living standards suffered by its members due to inflation and concessions in past contracts.
Mr. Fein has taken a more confrontational approach to negotiations than his predecessor. He painted the talks with GM, Ford and Stellantis as the first step in a broader effort to organize workers at Tesla, Toyota, Honda and other companies that don’t have unions in their U.S. factories.
In a video distributed online Friday, Fein said GM, Ford and Stellantis have not yet presented their best offer. “Despite all the fuss companies are making about how much they’ve expanded, it’s clear there’s still room to move,” he said.
Anderson said Fein, who was newly elected in March, may have made a miscalculation. “The UAW president is new and doesn’t have a lot of experience,” she said. “He may end up where he could have settled today, seeking an unrealistic settlement that may be costly for both parties.”
Cornell University’s Wheaton said striking the automaker’s largest and most profitable plant would send a signal to union members that UAW leaders are doing everything in their power to get the best deal. He said it would be.
“This shows our members, ‘Look, we’ve eliminated their biggest moneymaker and pushed them as hard as we can,'” he said. “Then, if we have a tentative agreement, we can say to our members, ‘You better ratify this.’ Don’t vote this down.”
This month, about 4,000 UAW members from Mack Trucks went on strike to reject a tentative agreement the UAW had negotiated with the company, a subsidiary of Volvo Trucks. Union officials are now trying to get better terms from the company.
Calendar is probably also an important consideration. Wheaton said Fein and union negotiators need to be wary of asking workers to enter the cold or holiday season with only $500 a week in strike pay.
“Walking the picket line in Detroit in November is not fun,” he said.