Ford, UAW clash as union expands strikes

2 months ago 64
  • About 25,000 UAW workers now on strike
  • New plants affected in Chicago and Lansing, Michigan
  • Ford CEO says talks not at an impasse yet

DETROIT, Sept 29 (Reuters) - Ford Motor (F.N) Chief Executive Jim Farley blasted United Auto Workers leaders on Friday, saying they were holding up a new U.S. labor agreement hours after the UAW escalated the strike that is now in its third week, with the companies and workers far apart on their demands.

UAW President Shawn Fain on Friday expanded the first-ever simultaneous strike against the Detroit Three, ordering workers to walk off the job at Ford's Chicago assembly plant and GM's (GM.N) Lansing, Michigan, assembly plant. He said Stellantis was spared after last-minute concessions by the Chrysler parent.

Farley's comments were unusually sharp in the middle of an ongoing negotiation, saying the union was holding the company "hostage" with demands that "could have a devastating impact on our business." He said the dispute centered around wages and benefits at new electric vehicle battery plants that have yet to start production.

“I don’t know why Jim Farley is lying about the state of negotiations," Fain said in a statement responding to the Ford CEO. "It could be because he failed to show up for bargaining this week, as he has for most of the past ten weeks."

The union continued its deliberate approach to the strike, choosing to walk out of just two additional assembly plants - rather than the sweeping impact of a walkout at the Detroit Three's most profitable plants that make pickup trucks.

In addition, the union is trying to conserve a limited strike fund that may be strained by additional strikes at Mack Trucks facilities and Detroit-area casinos that are also represented by the UAW.

"The strike costs the union a lot of money. It's $500 per worker per week. With the additional 7,000 we are talking about over $12 million a week out of the strike fund," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

The union and the companies remain far apart on key economic issues. Fain has stuck with a demand for 40% pay hikes over a four-year contract, a position supported this week by President Joe Biden. The companies have offered pay hikes of about 20%.

Fain said differences with Ford include retirement benefits and job guarantees.

Friday's strike expansion covered about 7,000 workers, Fain said, bringing the total number on picket lines to 25,000, or about 17% of the union's 146,000 members at the three automakers.

Rather than the hammer blow of a mass walkout it has wielded historically, the UAW is strategically playing the companies against each other, using reprieves from expansion of work stoppages as encouragement with different automakers the last two weeks.

The expanded strike was still avoiding pickup trucks, Detroit's biggest profit-makers, a sign of restraint. Workers on Friday walked out of the Ford assembly plant in Chicago that builds the Ford Explorer and Lincoln Aviator SUVs, as well as the GM plant in Lansing that makes the Chevy Traverse and Buick Enclave SUVs.

Striking United Auto Workers (UAW) union workers picket outside the Ford Michigan Assembly Plant in Wayne, Michigan, U.S., September 23, 2023. REUTERS/Dieu-Nalio Chery Acquire Licensing Rights

Farley said the union's decision to expand walkouts at Ford threatened thousands of supplier jobs. He added many suppliers are "on a knife's edge" because a more than two-week strike at the Michigan factory that builds Bronco SUVs and Ranger trucks.

Farley said the UAW chief was holding a deal hostage to the fate of electric vehicle battery plants, including three that Ford is building with outside companies and one it has planned to own itself in Marshall, Michigan. The UAW wants those workers represented by the union and paid the highest-tier wages.

Ford is now reconsidering the size and scope of the $3.5 billion Marshall battery plant in part because of uncertainty over labor costs, Farley said.

General Motors and Stellantis also blamed the UAW for the failure to reach new contracts.

GM said in an email to employees that it still has not received a comprehensive counteroffer to its Sept. 21 proposal. "Calling more strikes is just for the headlines, not real progress," the company said.

Stellantis (STLAM.MI), which was spared an additional walkout, said: "We have made progress in our discussions, but gaps remain. We are committed to continue working through these issues in an expeditious manner."

Fain said that moments before he was due to address members at 10 a.m. EDT (1400 GMT), Stellantis made significant changes in its proposal. That led to a half-hour delay in his announcement, and spared Stellantis from escalation.

Fain cited progress with Stellantis around cost of living allowance payments, as well as right to strike over product commitments and plant closures. Talks continue at all three companies.

Arthur Wheaton, director of labor studies at Cornell University, said: "What Shawn Fain wanted is a tit for tat: If you're good for us at the table, we won't mess with you. If you're bad with us at the table, we will escalate the strike."

The UAW has ratcheted up pressure over the past two weeks. Workers went on strike on Sept. 15 at one plant each from GM, Ford and Stellantis. The union escalated on Sept. 22, when workers walked off the job at GM and Stellantis distribution facilities in 20 states nationwide.

Fain is also ordering or threatening strikes at other companies. UAW workers are threatening to walk off the job at heavy truck maker Mack Trucks on Sunday, and at three Detroit casinos. A UAW strike has shut down a plant that builds axles for Mercedes-Benz's Alabama vehicle factory.

The effect of the walkouts on the automakers has been relatively limited compared to the financial hit that would come from halting assembly lines that build Ford F-series, Chevy Silverados and Ram trucks.

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Reporting by David Shepardson and Joseph White; additional reporting by Ben Klayman and Abhirup Roy, Bianca Flowers, Shivansh Tiwary, Abhijith G and Peter Henderson; editing by Nick Zieminski, David Gregorio and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Joe White is a global automotive correspondent for Reuters, based in Detroit. Joe covers a wide range of auto and transport industry subjects, writes The Auto File, a three-times weekly newsletter about the global auto industry. Joe joined Reuters in January 2015 as the transportation editor leading coverage of planes, trains and automobiles, and later became global automotive editor. Previously, he served as the global automotive editor of the Wall Street Journal, where he oversaw coverage of the auto industry and ran the Detroit bureau. Joe is co-author (with Paul Ingrassia) of Comeback: The Fall and Rise of the American Automobile Industry, and he and Paul shared the Pulitzer Prize for beat reporting in 1993.

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