The United Automobile Workers (UAW) union initiated a strike at three plants in the Midwest on Friday, marking the first simultaneous action impacting all three Detroit automakers: General Motors (NYSE:GM), Ford Motor (NYSE:F), and Stellantis (NYSE:STLA). The walkouts occurred after negotiations for a new collective bargaining agreement reached a deadlock, following the expiration of the current contract on Thursday.
The strike is expected to suspend operations at one plant each owned by General Motors, Ford Motor, and Stellantis. This disruption could potentially lead to a halt in production at other locations, affecting local economies across the Midwest. The plants chosen for the walkouts represent only a fraction of all unionized factories of the three automakers and their 150,000 UAW members.
The UAW is demanding a 40% wage increase over four years, pointing to similar increases in CEO compensation packages over the same period. Other demands include cost-of-living adjustments tied to inflation, shorter workweeks, improvements to retiree pensions and healthcare, job security measures like the ability to strike at plants slated for closure, and changes to a wage scale that requires new hires eight years to reach the top UAW wage of $32 per hour.
On Thursday, GM proposed a 20% wage increase over the life of the new contract, including a 10% raise in the first year and cost-of-living adjustments for more senior workers. GM also proposed allowing new hires to reach top wage after four years on the job. However, manufacturers have resisted most other demands.
This limited strike could disrupt automakers as these sites produce some of their most profitable trucks like Ford's Bronco SUV and Chevrolet's Colorado pickup. The affected plants include GM's Wentzville plant in Missouri which employs 3,600 workers and produces GMC Canyon and Colorado; Stellantis' complex in Toledo, Ohio, employing 5,800 workers and producing Jeep Gladiator and Wrangler; and Ford's Michigan Assembly plant in Wayne.
The UAW's demands for higher pay and new benefits mark a significant departure from the past two decades when the automakers were struggling, and the UAW had to accept major concessions to help the companies survive. However, recently GM, Ford, and Stellantis have reported near-record earnings. In the first half of this year, Ford made $3.7 billion, GM made $5 billion, and Stellantis reported profits of 11 billion euros (about $11.9 billion).
An extended strike could significantly impact the availability of new vehicles and drive up prices. It could also affect the automakers' supply chain and other businesses as workers receive $500 per week in strike pay from the union. This comes at a time when the auto industry is still grappling with the lingering effects of the pandemic, which has significantly reduced vehicle supply.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.