(NewsNation) — About 13,000 workers at three U.S. vehicle assembly plants went on strike Friday after the United Auto Workers union and Detroit’s Big Three automakers failed to reach an agreement on a new contract.
UAW President Shawn Fain said in an online address Thursday night that the union will use a new strategy in which strikes will occur at a few plants at a time. The union and automakers were unable to reach a deal on a new contract before a midnight Thursday deadline.
“This strategy will keep the companies guessing. It will give our national negotiators maximum leverage and flexibility in bargaining,” Fain said. “If we need to go all out, we will. Everything is still on the table.”
UAW members are on the picket lines in what is the first simultaneous strike against Ford, General Motors and Stellantis in the union’s 88-year history.
The first factories to be targeted are a General Motors assembly plant in Wentzville, Missouri; a Ford factory in Wayne, Michigan; and a Stellantis Jeep plant in Toledo, Ohio. Only assembly and paint shop workers will walk out at the Ford plant.
Union officials were not expected to bargain Friday, choosing instead to join workers on picket lines.
The workers received support from President Joe Biden, who dispatched aides to Detroit to help resolve the impasse and said the Big Three automakers should share their “record profits.”
Workers said they’ve planned for this and have been ready to fight for a better deal. They’ve said they are fed up with the companies’ CEOs making $20 million per year when their workers can’t afford their cost of living.
“Some of us have to take a second job,” said Sharifia Favro, a UAW member. “Who takes a second job when working for one of the Big 3? It’s not making any sense.”
“To see them getting millions and millions of dollars and we haven’t gotten a raise in 20 years, it’s unfair,” said UAW member Paul Martil. “It’s about time they pay up a little bit.”
Fain says workers could strike at more plants if the companies don’t come up with better offers. The workers are seeking across-the-board wage increases of 36% over four years; the companies have countered by offering increases ranging from 17.5% to 20%.
In its previous 88-year history, UAW had always negotiated with one automaker at a time, limiting the industrywide impact of any possible work stoppages. Each deal with an automaker was viewed as a template, but not a guarantee, for subsequent contract negotiations.
Now, roughly 13,000 of 146,000 workers at the three companies are on strike, making life complicated for automakers’ operations while limiting the drain on the union’s $825 million strike fund.
The limited-strike strategy could have ripple effects, GM CEO Mary Barra said Friday on CNBC.
Many factories are reliant on each other for parts, Barra said: “We’ve worked to have a very efficient manufacturing network, so yes, even one plant is going to start to have impact.”
The company told workers at its Fairfax, Kansas, plant in an internal memo Friday that it may run out of parts next week, CNN reported.
In a statement Thursday night, Ford said it has offered a “historically generous” contract with large wage increases the union has rejected. The company said the UAW’s demands would more than double its labor costs.
“Ford has bargained in good faith in an effort to avoid a strike, which could have wide-ranging consequences for our business and the economy. It also impacts the very 57,000 UAW-Ford workers we are trying to reward with this contract,” the company said. “Our hourly employees would take home nearly 60% less on average with UAW strike pay than they would from working. And without vehicles in production, the profit-sharing checks that UAW workers could expect to receive early next year will also be decimated by a significant strike.”
Ford said it remains committed to reaching an agreement that “rewards our employees” while also protecting its “ability to invest in the future as we move through industry-wide transformation.”
The company told 600 employees at the same Wayne, Michigan, plant where workers are striking to not come in Friday.
“This is not a lockout,” Ford said in a statement, as reported by CNBC. “This layoff is a consequence of the strike at Michigan Assembly Plant’s final assembly and paint departments, because the components built by these 600 employees use materials that must be e-coated for protection. E-coating is completed in the paint department, which is on strike.”
In addition to wage increases, the union is seeking the restoration of cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, pension increases for retirees, and other items.
Fain said the automakers have raised initial wage offers but have rejected some of the union’s other demands.
“We do not yet have offers on the table that reflect the sacrifices and contributions our members have made to these companies,” he said.
In a 2019 agreement, the union got 6% pay raises over four years with lump sums in some years as well as a profit-sharing check.
The Ford plant that’s on strike employs about 3,300 workers. The Toledo Jeep complex has about 5,800 workers, and GM’s Wentzville plant has about 3,600 workers.
Workers at Big Three factories make between $70,000 and $80,000 annually. Union workers have said it’s a great living, but the CEOs are making 300 times more than them.
All three companies’ offers on cost-of-living adjustments were deficient, Fain said, providing little or no protection against inflation.
The companies rejected pay raises for retirees who haven’t received one in over a decade, Fain said, and they are seeking concessions in annual profit-sharing checks, which often are more than $10,000.
Negotiations come as the economy is already under strain from elevated inflation.
Automakers contend that they need to make huge investments to develop and build electric vehicles while still building and engineering internal combustion vehicles. They say an expensive labor agreement could saddle them with costs that would force them to raise prices above their non-union foreign competitors. And they say they have made fair proposals to the union.
A UAW strike that shuts the three manufacturers for 10 days could cost carmakers, suppliers and workers more than $5 billion, Michigan-based Anderson Economic Group estimated, and could disrupt the broader auto supplier network.
The Associated Press contributed to this report.