The union’s president, Shawn Fain, has called those offers inadequate after years of sharp inflation and fat corporate profits and executive pay.
“This is our generation’s defining moment,” Fain said in a Facebook Live address to union members on Thursday night, less than two hours before the deadline. “The money is there. The cause is righteous. The world is watching. And th UAW is ready to stand up.”
Fain said the union would initially stop work at targeted locations at each company, in what he called a “stand-up strike,” and broaden the action to additional factories if talks remain unsuccessful.
It’s the first time the union has launched a strike of any size on all three companies at the same time. The last national auto strike was against General Motors in 2019.
At the Michigan Assembly plant in Wayne, workers cheered “we are on strike,” at the stroke of midnight.
Adelisa LeBron, a striking Ford employee who works on the engine line at the Michigan Assembly, said she’s on strike, because as a single mother she can’t afford to support to her kids without a second job. LeBron brought her mother — who also works for Ford — and daughter to the picket line on Friday morning. LeBron makes $24 an hour after two years at the facility. “As a single parent, I’m working paycheck to paycheck,” LeBron said. “I love the way Shawn is fighting for us, how he’s not going to settle.
Alarmed by the possibility of a broad work stoppage in an industry that makes up about 3 percent of the nation’s gross domestic product, the White House has been urging all sides to come to a deal.
President Biden spoke with Fain and the executives of the auto companies on Thursday, a White House spokesman said. The White House is preparing economic measures to protect suppliers to the auto industry from long-term damage, concerned that they will be particularly vulnerable in any strike, according to three people aware of internal conversations who spoke on the condition of anonymity to describe private deliberations.
The automakers have stressed that they are striving to negotiate a fair deal, with bigger wage hikes than they have offered in years. But they have said they can’t meet all of the union’s demands and still remain viable. Those demands include a 32-hour workweek, defined-benefit pensions for all workers instead of 401(k) accounts, and company-financed health care in retirement.
Ford chief executive Jim Farley on Thursday said that had the company provided such a package to its workers over the past four years, it would have racked up losses of $15 billion and “gone bankrupt by now.”
“There is no way we can be sustainable as a company” under these terms, Farley told CNBC. “You want us to choose bankruptcy over supporting our workers? Here’s our proposal — let’s work through this.”
Farley this week also accused the union of staging “PR events” and failing to respond to Ford’s latest offer, which he described as the most generous from the company in 80 years. The union is planning a rally with Sen. Bernie Sanders (I-Vt.) in Detroit on Friday evening.
Late Thursday, Ford said the UAW had finally responded to the company’s offer but had shown “little movement” in its position.
2023 has already been one of the biggest years for strikes in recent history. More than 353,000 workers in the United States have walked off the job to demand higher wages, according to Bloomberg Law’s database of work stoppages. That includes 180,000 Hollywood actors and screenwriters who have been on strike for months, the largest work stoppage since 1997.
At the UAW, striking workers will stop receiving wages from the companies and get paid $500 a week out of the UAW’s strike fund instead. Ford officials on Thursday cautioned that workers in nonstriking plants will also be hurt if a location that lacks parts from striking plants is forced to halt production. In that case, many of those workers will be sent on temporary unemployment, in line with Ford’s usual policy when plants are idled over a lack of parts, said the officials, who spoke on the condition of anonymity due to the sensitivity of the negotiations.
The Stellantis plant in Toledo makes Jeep Wranglers and Jeep Gladiators, and it employs 4,174 hourly workers, according to the company’s website. GM’s Wentzville, Mo., plant makes Chevrolet Colorado trucks and Express vans as well as GMC Canyon trucks and Savana vans, employing about 4,100 people. Ford’s Michigan Assembly Plant in Wayne makes Ranger trucks and Bronco SUVs and employs about 4,600 hourly workers, but Fain said only the workers in final assembly and the paint shop were walking out initially.
GM Chair and CEO Mary Barra on Thursday said the company had boosted its wage raise offer to 20 percent over the life of the contract with the aim of avoiding a strike. Full-time UAW workers today earn between $18 and $32 an hour.
“We’re at a crossroads on our path to building a company that can sustain all of us for decades to come,” she wrote in a letter to employees before the contract expired. “Today, we put a compelling and unprecedented economic package on the table that reflects the significance of this critical moment.” She added that “nobody won” after the UAW strike against GM in 2019.
Fain said Thursday night that union workers at all three companies should be ready to join the strike immediately if called upon, so the automakers have to keep guessing about which factories could be hit next — pressuring them to bargain.
“No matter what, all of us need to keep organizing,” he said. “Rallies. Protests. Red shirt days and community events. We must show the companies you are ready to join the stand up strike at a moment’s notice. And we must show the world that our fight is a righteous fight.”
The UAW’s 150,000 automotive members produce nearly half of the light vehicles manufactured in the United States, according to analytics firm GlobalData.
A strike that significantly hurts auto production would quickly ripple out to affect suppliers and other businesses in auto manufacturing communities. As auto factories shut down, those businesses would stop ordering parts. Many auto parts suppliers are still trying to recover from long shutdowns during the coronavirus pandemic and would be clobbered by another disruption, analysts say.
The automakers have argued that a big hike in their labor costs, or a prolonged shutdown, would undermine their efforts to scale up production of electric vehicles, a major undertaking that is costing the global auto industry tens of billions of dollars.
Fain has argued that workers deserve the same generous pay increases that executives got over the life of the current contract, which was signed in 2019.
GM CEO Barra’s compensation grew by 34 percent between 2019 and 2022, to $29 million last year. Ford’s CEO pay grew by 21 percent over that period, to $21 million last year. Stellantis, headquartered in the Netherlands and formed through a 2021 merger of Fiat Chrysler and France’s Peugeot SA, didn’t exist when the contract began. Stellantis CEO Carlos Tavares earned about $25 million last year, including long-term incentives.
Workers all over the country have fought to boost wages that have not kept up with inflation. Consumer prices have jumped by 20 percent since the UAW signed its last contract in 2019, and starting wages at the Big Three are about $10 lower than what they would be had they kept up with inflation since 2007, the UAW said.
Beyond the wage increases they are offering, the companies have made other concessions. All three companies are offering to allow workers to progress to the highest wage level at a faster rate than in the past. They’ve also made concessions on temporary workers, who make far less than full-time workers do and often get stuck in temp status for years. Ford is proposing converting all of its current temporary workers to full-time status after 90 days of work, while GM and Stellantis are offering an immediate 20 percent raise over temps’ starting wage, to $20 an hour.
Hours before the strike began, some autoworkers gathered at a tavern in downtown Detroit to speculate on how the strike could play out over wings and beer.
Jaron Garza, 49, a third-generation General Motors autoworker, said for him, the strike is about much more than getting a raise, but preserving the middle class job security that uplifted his family after emigrating from Mexico. Garza has been on strike three times before.
“I feel a sense of responsibility to fight as hard as we can to make sure that the people that come after me have things that I had coming in the door,” Garza said. “Because right now they do not.”
Jeff Stein contributed to this report.