UAW Could Expand Strike More 09/24 07:56
(AP) -- Even after escalating its strike against Detroit automakers on
Friday, the United Auto Workers union still has plenty of leverage in its
effort to force the companies to agree to significant increases in pay and
Only about 12% of the union's membership is so far taking part in the
walkout. The UAW could, if it chose to, vastly expand the number of workers who
could strike assembly plants and parts facilities of General Motors, Ford and
Stellantis, the owner of the Jeep and Ram brands.
Yet the UAW's emerging strategy also carries potentially significant risks
for the union. By expanding its strike from three large auto assembly plants to
all 38 parts distribution centers of GM and Ford, the UAW risks angering people
who might be unable to have their vehicles repaired at service centers that
The union's thinking appears to be that by striking both vehicle production
and parts facilities, it will force the automakers to negotiate a relatively
quick end to the strike, now in its second week. To do so, though, some
analysts say the union might have to act even more aggressively.
"We believe the next step for UAW is the more nuclear option --- going for a
much more widespread strike on the core plants in and around Detroit," said
Daniel Ives, an analyst with Wedbush Securities. "That would be a torpedo."
Sam Abuelsamid, an analyst at the consulting firm Guidehouse Insights,
suggested that with so many workers and factories still running, the union has
a number of options with which to squeeze the companies harder.
"They could add more assembly plants to the list," Abuelsamid said. "They
could target more of the plants that are building the most profitable vehicles."
As examples, he mentioned a plant in Flint, Michigan, where GM builds
heavy-duty pickups, and a Stellantis factory in Sterling Heights, Michigan,
that produces Ram trucks.
All three companies said that talks with the union continued on Saturday,
though officials said they expected no major announcements.
In Canada on Saturday, Ford workers began voting on a tentative agreement
that their union said would increase base pay by 15% over three years and
provide cost-of-living increases and $10,000 ratification bonuses. The
tentative deal was forged earlier this week, hours before a strike deadline.
The union, Unifor, said the deal, which covers 5,600 workers, also includes
better retirement benefits. If the deal is ratified in voting that will end
Sunday morning, the union will use it as a pattern for new contracts at GM and
Stellantis plants in Canada.
In the United States, the UAW began its walkout more than a week ago by
striking three assembly plants -- one each at GM, Ford and Stellantis. In
expanding the strike on Friday, the UAW struck only the parts-distribution
centers of GM and Stellantis. Ford was spared from the latest walkouts because
of progress that company has made in negotiations with the union, said UAW
President Shawn Fain.
Striking the parts centers is designed to turn up pressure on the companies
by hurting dealers who service vehicles made by GM and Stellantis, the
successor to Fiat Chrysler. Service shops are a profit center for dealers, so
the strategy could prove effective. Millions of motorists depend on those shops
to maintain and repair their cars and trucks.
"It severely hits the dealerships, and it hurts the customers who purchased
those very expensive vehicles in good faith," said Art Wheaton, a labor expert
at Cornell University. "You just told all your customers, 'Hey we can't fix
those $50,000 to $70,000 cars we just sold you because we can't get you the
The more combative union has declined to discuss its strike strategy
publicly. Fain has said repeatedly that a critical part of its plan is to keep
the companies guessing about the UAW's next move. Indeed, the union has shown
unusual discipline in sticking to its talking points.
On a picket line Friday, Fain was asked whether striking against the
spare-parts centers would hurt -- and potentially alienate -- consumers.
"What has hurt the consumers in the long run is the fact the companies have
raised prices on vehicles 35% in the last four years," he shot back. "It's not
because of our wages. Our wages went up 6%, the CEO pay went up 40%. "
Selling parts and performing service is highly profitable for car dealers.
AutoNation reported a gross profit margin of 46% from service shops at its
dealerships last year. The problem for the companies is that dealerships and
other repair shops typically have lean inventories and depend on receiving
parts quickly from the manufacturers' warehouses.
Mike Stanton, president of the National Automobile Dealers Association, said
his members want to avoid anything that would impair customer service, "so we
certainly hope automakers and the UAW can reach an agreement quickly and
To make up for the loss of striking workers, the automakers are weighing
their options, including staffing the parts warehouses with salaried workers.
"We have contingency plans for various scenarios and are prepared to do what
is best for our business and customers," said David Barnas, a GM spokesman. "We
are evaluating if and when to enact those plans."
Similarly, Jodi Tinson, a Stellantis spokeswoman, said, "We have a
contingency plan in place to ensure we are fulfilling our commitments to our
dealers and our customers." She declined to provide additional details.
In negotiating with the companies, the union is pointing to the carmakers'
huge recent profits and high CEO pay as it seeks wage increases of about 36%
over four years. The companies have offered a little over half that amount.
The companies have said they cannot afford to meet the union's demands
because they need to invest profits in a costly transition from gas-powered
cars to electric vehicles. They have dismissed out of hand some of the demands,
including 40 hours' pay for a 32-hour work week.