It is the first time in the union’s more than 80-year history that a strike has affected all three U.S. automakers at the same time.
Hours before the strike began, Shawn Fain, president of the United Auto Workers, said the union would stop work at one plant each of the three major automakers: a General Motors plant in Wentzville, Missouri; a Stellantis facility in Toledo, Ohio; and a Ford plant in Wayne, Michigan.
In an online address to workers, union president Shawn Fain reported that General Motors, Ford and Stellantis (owner of Chrysler) had increased initial wage offers but rejected some of the union’s other demands.
Fain said the three Detroit automakers offered wage increases of up to 20% to 146,000 workers over four and a half years, but called the offer inadequate.
“We still don’t have any offers on the table that reflect the sacrifices and contributions our members have made to these companies,” he said. “To win, we probably have to do something. “We are preparing for a strike like they have never seen before.”
“If companies continue to negotiate in bad faith or continue to hesitate or continue to make offensive offers to us, our strike will continue to grow,” Fain said, adding that targeted attacks with the risk of escalation “will keep companies on their toes.”
Sam Fiorani, an analyst at consulting firm AutoForecast Solutions, said automakers had about 1.96 million vehicles in their warehouses at the end of July and would speed up production in case they face a union lawsuit. However, “a three-week or longer strike will quickly deplete supplies, drive up prices and drive sales toward non-union brands,” he explained.
Automakers claim that they need to make large investments to develop and build electric vehicles while also building and designing internal combustion engine vehicles. They say a costly labor deal could impose costs on them that would force them to raise prices compared to their non-union foreign competitors. And they say they made fair proposals to the union.
What are the workers’ demands focused on?
Salary increases of 46% and 32 hours of work per week: key points for the UAW
The union is demanding salary increases of 46%, phased in over four years. That means higher-paid workers in manufacturing plants would earn $47 an hour, up from $32 currently. In addition, the union wants to abolish wage scales for jobs carried out in these factories.
It also calls for a 32-hour work week instead of the usual 40 and the restoration of traditional retirement benefits for new employees: Companies currently offer 401(k) retirement plans instead of previously established retirement plans.
Another important point for the UAW union is the possibility of having a presence in a dozen electric vehicle battery factories, many of which will be in the hands of joint ventures between automakers and South Korean companies.
The union wants workers at these factories to receive the highest wages the UAW has achieved, in part because those now working on internal combustion engines will need jobs as the industry shifts to electric vehicles.
Five ideas to save money when using your car
What are the current salaries and benefits of UAW employees?
Unionized UAW workers hired after 2007 are not part of defined pension plans and their health benefits are also less generous.
In recent years, the UAW has agreed that workers should not receive raises or cost-of-living adjustments to help companies control expenses.
A worker at the highest pay level at an assembly plant earns $32.32 an hour, and contract workers start at just under $17. However, full-time employees this year received profit-sharing checks of $9,716 at Ford and $14,760 at Stellantis.
Fain himself acknowledged that the union’s demands were “bold,” but said automakers could afford wage increases and offset workers’ concessions since the 2007-2009 financial crisis.
What companies have suggested to UAW workers
Ford’s offer calls for a gradual 10% salary increase over the life of the four-year contract, as well as several one-time payments, including one of $6,000 to cover rising inflation.
GM offered a similar percentage and several one-time payments to Ford. Stellantis (formerly Fiat Chrysler) offered a 14.5% increase over four years, but without the one-time payments that GM and Ford would make. Stellantis proposed payments to cover the rise in inflation.
All three companies also offered bonuses but rejected the 32-hour work week required by the UAW.
How to pay off your mortgage faster: we explain
