On September 29, 2023, members of the United Auto Workers union went on strike at the General Motors Lansing Delta Assembly Plant in Lansing, Michigan.
Bill Pugliano | Getty Images
DETROIT — A shift in strategy from the United Auto Workers union this week has some analysts wondering whether the two sides are, perhaps counterintuitively, getting closer to a deal.
On Wednesday, the union suddenly announced a work stoppage. Ford Motor Company’s Kentucky Truck Plant. The strike, involving 8,700 workers, affects by far the most important plant (with annual revenue of $25 billion), where the union has withdrawn since the strike began on September 15. This is expected to have ripple effects to other Ford plants and suppliers soon.
It also ushered in what UAW President Sean Fein called a “new phase” of strikes and contract negotiations with Ford, General Motors and Chrysler parent company starFein told members in a speech on Friday that it was a surprise for the union and kept the automakers on edge in ongoing negotiations.
“We are entering a new phase of this fight that requires a new approach,” Fein said on Friday. “We have waited until Friday to escalate the strike.
“We stand ready to call on more local people to step up and get out,” he said.
Until this week, Fein had not announced any new strikes by the union on Friday, during which live updates were given to union members every week.
Some Wall Street analysts and industry experts believe this week’s shift in strategy could be a sign that UAW leaders believe a deal with Ford is close and are ramping up pressure as a tactic to push the deal through and help them Achieve goals. Selling potential tentative deals to its members.
“We continue to view this week’s (Ford) strike escalation as a sign that negotiations may be coming to an end. KY Truck is probably Ford’s most profitable plant, so this strike is the highest level of escalation in addition to the nationwide strike,” Wells Fargo said. bank analyst Colin Langan wrote in a note on Friday. “This escalation may be an effort to push for final terms.”
But UAW leaders may be considering taking a step forward and selling a tentative deal with Ford to their members. The thinking is that to convince members to approve a potential new contract, UAW President Sean Fein and union leadership need to convince autoworkers that the union is doing its best to meet their demands. Hitting Ford’s most profitable plants could be one way to accomplish that goal.
Wolfe Research’s Rod Luckey thinks the strike in Kentucky could allow UAW leadership to claim they’ve done everything they can, especially if it leads to one or two more Fords If the item gives in.
“In another week or two, Fein should be able to credibly declare that he has forced Ford into a final capitulation (battery factory?) and that UAW members have received the last few ounces of wages, benefits and employment they have earned. Protection concessions. Available,” Luckey wrote to investors on Thursday.
In the early morning of October 12, 2023, in Louisville, Kentucky, factory workers and UAW union members lined up on picket lines outside the Ford Motor Company’s Kentucky Truck Plant.
Luke Schallert | Getty Images
win the support of workers
Currently, only about 34,000 U.S. automakers — UAW members covered by expired contracts with Detroit automakers — are on strike.
“Investing in a very high-value, high-margin plant will certainly get Ford’s attention very quickly,” said Art Wheaton, a labor professor at Cornell University’s Workforce Institute. “It also sends a message to Stellantis and General Motors. A huge message.”
Wheaton thinks Kentucky’s upgrade could be just the beginning. The union could also hit more plants for each automaker, including the full-size pickup plants owned by all three automakers and the large SUV plants of GM and Stellantis.
General Motors last week averted a strike at its most profitable SUV plant in Texas. A last-minute offer was made to include battery factory workers in the company’s national deal, but details on how that would be done are believed to be still being negotiated.
While Fein declined Friday to expand the strike against GM and Stellantis, Wells Fargo’s Langan said that doesn’t necessarily mean they will be spared.
“While GM and STLA did not match F’s offer, there was no strike today, consistent with the UAW’s last-ditch push to retain its most profitable plants,” he wrote in a note Friday.
Other results?
All this tea leaf reading aside, rapid escalation to a solution is just one potential outcome.
Another reason includes the automaker’s insistence that the union exhaust its resources, particularly strikes and defense funds. Alternatively, the UAW could continue rotating strikes or file additional unfair labor practice charges against the companies. Another outcome might be for both parties to seek mediation or legal resources.
“I think they have to get close to some kind of agreement, or you have to come up with a reasonable agreement that hasn’t been reached yet — it’s really more of a test of wills than anything else,” said Wayne State University in Detroit, who specializes in labor said Malik Masters, a business professor on the issue.
Automakers can also submit what’s known as a “last, best and final offer,” as it’s called, which is typically the final proposal when negotiators reach an impasse.
Ford may be close to that.A senior executive said on Thursday that the automaker In terms of economic concessions, the UAW is “stretched to the limit” of what it can provide.
The Detroit automakers have largely met many of the union’s demands, but not all.
The companies have yet to wave the white flag on demands for a 32-hour work week – which has long been unattainable for companies and has largely ceased to be a talking point for unions – and demands for a 40 percent pay rise.
Ford increased wages by a record 23% in its latest contract proposal, and other companies have followed suit.
Then there are the unresolved issues of retiree benefits, a return to traditional pension plans and the future of battery plant jobs and workers.
Industry experts and sources familiar with the negotiations believe that regardless of the outcome, the contracts are likely to have a knock-on effect on the company, including restructuring, cost cutting, and future investment and employment.
A former senior negotiator for one automaker told CNBC that once contracts are finalized, the companies will almost certainly cut union jobs through product distribution, plant closings or other means to offset increased labor costs.
“They have to pay. The question is how much,” said the longtime bargainer, who agreed to remain anonymous. “That ultimately leads to fewer jobs. That’s how automakers cut costs.”
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