The United Auto Workers’ labor negotiations with the Detroit-Three automakers:
Ford,
General Motors,
and
Stellantis
are getting more contentious.
The Union is threatening to expand its strike if the two sides fail to make “serious progress” toward an agreement by Friday, the union’s leader warned late Monday. Former President Donald Trump isn’t helping, either.
The UAW strike, entering its fifth day, began in the early hours of Friday morning with the union striking at three facilities, one at each automaker. Workers are currently on strike at
GM’s
(ticker: GM) Wentzville Assembly in Missouri,
Stellantis
’ (STLA) Jeep assembly complex in Toledo, Ohio, and select departments in Ford’s (F) assembly plant near Detroit.
The 2023 strike strategy is unique. It’s the first time the UAW is striking at all three automakers at the same time. In the past, the UAW typically picked one company as a negotiating lead. A partial walkout is also unusual. The strategy helps preserve the UAW strike fund—many workers are still making cars—and forces the companies to shut plants and lay off workers if they run out of parts from other points in the manufacturing systems.
Ford laid off some 600 workers because of no work in parts of its Michigan Assembly plant. The laid-off workers aren’t eligible for supplemental unemployment benefits from Ford. The UAW didn’t respond to a request for comment about whether the laid-off workers would get strike pay.
Strike pay amounts to roughly $500 a week. The average weekly wage for hourly employees is about $1,200.
UAW President Shawn Fain said the union will call on more members to join the strike unless there’s a breakthrough in negotiations by Friday.
“Autoworkers have waited long enough to make things right at the Big Three. We’re not waiting around, and we’re not messing around. So, noon on Friday, September 22nd is a new deadline,” he said in a video released online.
Ford and GM stocks both pointed 0.1% down in early premarket trading Tuesday, while Stellantis climbed 1.7%.
S&P 500
and
Dow Jones Industrial Average
futures are both down about 0.2%.
Fain also commented about Trump after the former president criticized his leadership on NBC News. Trump, essentially, warned that poor labor relations and higher-than-average cost structures will move auto jobs out of the U.S.
“Every fiber of our union is being poured into fighting the billionaire class and an economy that enriches people like Donald Trump at the expense of workers,” said Fain in an emailed statement. “We can’t keep electing billionaires and millionaires that don’t have any understanding what it is like to live paycheck to paycheck and struggle to get by and expecting them to solve the problems of the working class.”
Ford stock closed 2.1% down Monday, GM fell 1.8% and Stellantis was down 1.6% as investors digested the latest developments over the weekend. Those included negotiations between the union and the three automakers resuming.
Ford and GM shares are down about 13% and 17% since the start of July when labor started becoming an issue for investors. The S&P 500 is flat over the same span. Stellantis stock is up about 10%. Stellantis is a cheaper stock than the other two and is more global. It’s also headquartered in Europe. The three stocks don’t always trade together.
Stellantis trades for about 3.4 times estimated 2024 earnings. GM trades for about 4.9 times. Ford trades for about 6.6 times.
However, there was also a reminder of how far apart the sides currently are. Fain rejected Stellantis’ offer of a 21% pay increase, in an interview with CBS’ Face the Nation Sunday. That 21% wage increase excludes cost-of-living adjustments. The total way increases would be a little more than 21% over the life of the contract.
The UAW initially sought raises of 40%, cost-of-living increases, job protections, a 32-hour workweek, and benefits for retirees. Fain on Sunday pointed to 40% pay raises for automaker CEOs over the past four years as the reason why workers deserved similar-sized increases.
Write to Callum Keown at [email protected]
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