By Kevin Krolicki and Steve Holland
DETROIT (Reuters) -The United Auto Workers union launched simultaneous strikes at three factories owned by General Motors, Ford Motor and Chrysler parent Stellantis on Friday, kicking off the most ambitious U.S. industrial labor action in decades.
The walkouts at the Detroit Three will halt production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck, along with other popular models, though the action was smaller than some expected, with roughly 12,700 workers striking at the outset.
The action caps weeks of clashes between the union and Detroit Three executives over union demands for a bigger share of profits generated by combustion trucks, and stronger job security as automakers shift to electric vehicles.
The automakers’ previous contract expired at 11:59 p.m. EDT on Thursday, and there will be no negotiations on Friday, the UAW said. Union President Shawn Fain said the union will hold off more costly company-wide strikes for now, but all options are open if new contracts are not agreed.
President Joe Biden, who faces re-election next year, called for the auto companies to reward workers just as executives’ salaries have risen. “No one wants a strike, but I respect workers’ right to use their options,” Biden said, echoing statements from union leaders. He said that until now, these profits “have not been shared fairly” with workers.
Dozens of workers picketed the main entrance at Ford’s Michigan assembly plant in Wayne on Friday. Many passing drivers blew their horns in solidarity, including a police car and a car marked Ford Security.
Workers said they have been hurt by a series of changes to their contract and work rules over the past 15 years which have shifted risks to “tier two” workers. Those employees can make only half the hourly wages of senior UAW workers and face a longer climb to reach the highest pay under the expired contract.
None of the Detroit Three has proposed eliminating those tiered wage systems – a key UAW demand.
“There are times when I look in my pantry, I look in my fridge and I don’t know how I’m going to feed my family,” said Gerry Gunn, 38, who started at Ford six years ago and was on the picket line on Friday in Wayne.
Executives say the union’s asks would make the automakers uncompetitive against other nonunion rivals. “We still have a ways to go with the offer they put on the table last night,” said GM CEO Mary Barra on “CBS This Morning” on Friday.
In addition to Ford’s Wayne plant, the strikes are taking place at assembly plants operated by GM in Wentzville, Missouri, and by Stellantis’ Jeep brand in Toledo, Ohio. Those plants produce some of the automakers’ most profitable vehicles.
Friday’s walkout was smaller than some analysts expected, but workers in Michigan supported the plan. “Keep the other plants open,” said Sofus Nielsen, a 29-year Ford veteran, outside the Wayne plant. “This way we can be out here longer and hurt them more.”
Targeted walkouts could limit the cost of strike pay to the UAW, which has an $825 million strike fund. The automakers have built up billions thanks to robust profits from the trucks and SUVs UAW members build.
Stellantis has more than 90 days’ worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data. But a week-long shutdown at the Toledo Jeep plant could cut revenue by more than $380 million, based on Stellantis financial reports.
Biden on Friday said acting Labor Secretary Julie Su and adviser Gene Sperling will travel to Detroit to offer support for talks.
Ford stock was up 0.2% in New York on Friday, while GM shares gained 1.2%. Stellantis shares closed up 1.9% in Milan.
COST HIKE FEARS
The UAW has said it wants a 40% raise, while the automakers have offered up to 20%, but without key benefits demanded by the union. The automakers have said the union’s demands would create an unsustainable financial situation and leave them exposed to losses in coming years.
Fain has rejected the automakers’ assertions, saying the companies have spent billions on share buybacks and executive salaries.
Ford said the UAW’s latest proposals would double its U.S. labor costs and make it uncompetitive against Tesla and other nonunion rivals. A walkout could mean that UAW profit-sharing checks for this year would be “decimated,” it said.
Stellantis said it had immediately gone into “contingency mode” and would take structural decisions to protect the company and its North American operations, without elaborating. Fain said earlier this week that Stellantis had proposed shutting as many as 18 U.S. facilities.
GM said on Thursday that the UAW wage and benefits proposals would cost the automaker $100 billion, but did not detail how the union proposals would result in that cost, or over what time frame.
While Biden is pouring billions in federal subsidies into expanding electric vehicle sales, this shift could threaten combustion powertrain jobs. The UAW has not endorsed his re-election.
Biden’s likely opponent, former president Donald Trump, on Friday criticized the shift to EVs as a job-killer for the UAW.
(Reporting by Joseph White and Kevin Krolicki in Detroit, David Shepardson and Steve Holland in Washington, Peter Henderson in San Francisco and Mehr Bedi in BengaluruEditing by David Gaffen, Alexander Smith and Matthew Lewis)
