US vehicle makers in high-stakes standoff as workers’ strike drags on

• Cat and mouse strategy gives union the edge

The United Auto Workers (UAW) headed into the 19th day of strikes with a bold strategy that places the Detroit Three vehicle manufacturers in a high-stakes game of Survivor with a weekly decision on which factories the strike will hit next, with layoffs mounting, suppliers hurting and harsh rhetoric from both sides.

UAW president Shawn Fain has transformed the rituals of contract talks with General Motors (GM), Ford and Chrysler parent Stellantis into a highstakes, made-for-media game. The vehicle makers will look for clues on how to survive in the agreement the union reached on Sunday with Volvo Groupowned Mack Trucks.

For now, the union appears to be in control, though there is pain on both sides.

GM and Ford said on Monday they were indefinitely laying off another 500 workers at four Midwestern plants, citing the effect of the walkouts.

Analysts looking ahead to third-quarter financial results this month are starting to reckon the costs of what the UAW calls “stand-up strikes”. JPMorgan estimated GM has lost $191m in operating profit and Ford $145m during the quarter.

Those are large sums, but not in the context of GM or Ford, which have forecast combined pretax profits of up to $26bn for this year.

The real pain will start if the UAW orders walkouts at factories that build Ford, Chevrolet and Ram pickup trucks and large SUVs such as GM’s Cadillac Escalade.

At the current pace, it could take the UAW weeks to get to those factories working again.

“We have the power to keep escalating and keep taking plants out,” Fain said in a video address on September 13. “This is going to create confusion for the companies. This is going to keep them guessing on what will happen next.”

EFFECTIVENESS

Last Friday, the UAW displayed the effectiveness of its strategy of launching limited strikes at all three companies at once, rather than tackling each company one at a time as in the past.

Fain was prepared to order walkouts at one assembly plant for each of the three vehicle makers. At the last minute, he decided not to order a strike at a Stellantis factory because the parent of Chrysler offered new concessions minutes before the union president’s scheduled Facebook Live address.

The previous week, Ford got a pass when it made more favourable job security and inflation protection proposals. UAW workers at GM and Stellantis parts depots walked off the job, while Ford’s employees kept shipping parts to dealers.

The rules of the game are clear: for carmakers to avoid a wider walkout and more lost revenue, they must make new steps towards satisfying union demands by Friday’s deadline.

“Negotiations are evaluated by the UAW weekly,” said Harley Shaiken, a labour professor at the University of California Berkley. “If you don’t give something the union wants, you will have another plant on strike.”

The CEOs of GM and Ford last week accused Fain of misrepresenting the state of bargaining and spending too much time on television and not enough at the bargaining table. Both stopped short of accusing the UAW of bad faith bargaining, but they accused Fain of putting the companies and union jobs at risk. “The UAW is pitting the companies against one another,” GM CEO Mary Barra said on Friday. “But it’s a strategy that ultimately only helps the nonunion competition.”

Ford CEO Jim Farley warned that suppliers to the Michigan assembly plant, which builds Bronco SUVs and Ranger pickups, are on a “knife’s edge with thousands of jobs at risk”.

He said: “What’s really frustrating is that I believe we could reach a compromise on pay and benefits, but so far the UAW is holding the deal hostage over the battery plants.”

Ford plans four electric vehicle battery plants in the US three of them under joint ventures with South Korean battery maker SK On. The fourth would be a wholly owned facility planned in Marshall, Michigan, to build low-cost lithium iron batteries with technology from China’s CATL.

Technically, the joint venture plants are separate companies not subject to the labour talks. GM’s joint venture battery plants also have separate status and GM has declined to include them in negotiations.

Nonetheless, Fain has made an issue of lower wages at the battery joint ventures. The union seeks to avoid a situation where non-union, lower-paid battery plant jobs eventually replace UAW-represented combustion power-train jobs.

What happens next and when is unclear, by design.

The UAW held new bargaining sessions with GM and Stellantis on Monday. Company negotiators are interested in details of the tentative deal the union struck with Mack Trucks, which if ratified will significantly increase wages for almost 4,000 UAW members at the truck maker.

The sides agreed just before the Sunday night deadline, not long after Fain blasted the truck maker for “following the same tired playbook as many of our other employers”.