UAW, Detroit Three automakers in standoff as wider strike looms

By David Shepardson and Joseph White

DETROIT (Reuters) -Detroit’s Big Three automakers and the United Auto Workers remained far apart in labor negotiations on Wednesday, less than 48 hours before the union’s deadline to make significant progress or escalate a strike with new work stoppages.

Talks continued between union representatives and company management on the sixth day of a coordinated walkout, a day after Ford (NYSE:) averted a strike by Canadian workers.

But there were few signs of significant progress, with Detroit automakers increasingly outspoken in rejecting the UAW’s demands that include a 40% pay hike, a 32-hour work week and an end to a tiered wage structure that pays newer workers less.

“The fundamental reality is that the UAW’s demands can be described in one word — untenable,” General Motors (NYSE:) President Mark Reuss said in an opinion piece published in the Detroit Free Press on Wednesday. “As the past has clearly shown, nobody wins in a strike. We have delivered a record offer. That is a fact.”

The UAW launched a strike against Ford, GM and Stellantis (NYSE:) last week, targeting one U.S. assembly plant at each company. Those strikes have halted production at plants in Michigan, Ohio and Missouri that produce the Ford Bronco, Jeep Wrangler and Chevrolet Colorado, alongside other popular models.

Detroit-based LM Manufacturing, a joint venture between LAN Manufacturing and Magna, said Wednesday it temporarily furloughed 650 workers that produce seats for the Ford Bronco because of the impact of the assembly plant closure.

The UAW has said it will announce strikes against more U.S. plants on Friday if no serious progress is made in talks with automakers by 12 p.m. EDT (1600 GMT) on that day.

The biggest issues up for negotiation involve the level of pay hikes and benefits for workers. The three automakers have proposed 20% raises over the 4-1/2 year term of their proposed deals, though that is only half of what the UAW is demanding through 2027.

UAW workers also want to end a tiered wage structure that they say has created a large gap between newer and older employees, forcing some to work two jobs to make ends meet.

Approximately 12,700 workers are on strike as a result of the UAW’s coordinated U.S. action, out of the union’s 146,000 members who work at the Big Three.

“We’re not playing. We’re serious about this,” said Victor Holloway, 24, of Westland, Michigan, who has worked at the striking Ford plant in Wayne, Michigan, since 2021.

GM said it was idling its Fairfax, Kansas, car plant on Wednesday because of a shortage of parts as a result of the nearby Missouri strike, a move that will result in 2,000 hourly workers being temporarily furloughed.

Analysts expect plants that build more profitable pickup trucks such as Ford’s F-150, GM’s Chevy Silverado and Stellantis’ Ram to be the next strike targets if the walkout continues.

Ford reached a last-minute deal to avoid a walkout at its Canadian operations late on Tuesday. Unifor, which represents about 5,600 Canadian auto workers, had been threatening to go on strike at all three Ford’s plants in the country if a deal was not reached.

The three-year agreement remains subject to ratification by Unifor members, Ford’s Canada unit said in a statement, adding that it would not disclose details of the tentative deal. Unifor had sought improved wages and pensions, as well as support in the transition to electric vehicles and additional investment commitments by Ford.

The Canadian union will now turn to hammering out deals with GM and Stellantis. Those deadlines were extended while the Ford talks proceeded.

Ford said on Tuesday it was making contingency plans for further U.S. work stoppages, including plans to ship parts that keep Ford vehicles on the road, especially to keep first responders and other essential services running.

Ford said it continued to negotiate with the UAW, with the focus on reaching a deal that would reward employees and allow the company to invest and grow.

Stellantis said on Wednesday it would temporarily lay off 68 employees in Ohio and expected to furlough another 300 workers in Indiana because of the strike at a Jeep assembly plant in Toledo, Ohio. Stellantis anticipates similar actions at Kokomo Transmission and Kokomo Casting in Kokomo, Indiana, impacting an estimated 300 additional employees.

A complete walkout by 146,000 UAW auto workers could result in a modest 0.2% drag to annualized growth of U.S. gross domestic product this quarter should the strike action last for a month, RSM estimated.

U.S. President Joe Biden wore a red tie on Wednesday in solidarity with UAW workers, the White House said. He has called on automakers to concede more to the striking workers.

Transportation Secretary Pete Buttigieg told reporters the administration has been very engaged and “is going to do everything we can to be helpful while respecting the basic fact that this is down to the negotiators.”