United States: a few hours before the deadline, the automobile strike seems inevitable

The union of employees of the three major American automobile manufacturers announced the start of a strike in three factories from 04:00 GMT on Friday, in the absence of an agreement reached with the three major manufacturers in the United States.

“The strike begins in the three designated factories,” declared the United Auto Workers (UAW) union, which had announced earlier that it had chosen three factories to launch this movement, one from each of the General Motors, Stellantis and Ford groups.

The sites concerned are assembly plants: in Wentzville (Missouri) for GM, in Toledo (Ohio) for Stellantis and in Wayne (Michigan) for Ford. They total approximately 12,700 UAW union members.

Union president Shawn Fain urged the approximately 146,000 union members working for these three historic manufacturers to be ready as negotiations progress, warning that the union would not hesitate to expand the movement.

In a statement released immediately, Ford said it was “absolutely committed to reaching an agreement that rewards employees and protects Ford’s ability to invest for the future.”

According to the group, the counter-proposal sent Thursday evening by the UAW “showed few differences from the initial demands” of the union. Ford called the offer he made to the union more than two days ago “historically generous with significant wage increases” and other benefits.

Negotiations began two months ago to develop new collective agreements for four years.

– “Historic strike” –

“We told businesses, from the beginning, that September 14 (at midnight) was a deadline, not a milestone,” Shawn Fain warned on Wednesday.

For his part, Ford boss Jim Farley criticized him Thursday afternoon for being “busy preparing a strike” instead of negotiating “this contract with us when it is about to expire”, on the CNBC channel.

Members of the UAW union, August 20, 20123 in Warren, Michigan (AFP/Archives/JEFF KOWALSKY)

He wants to “make a historic strike in the three groups but we want to make history with a historic agreement”, he added.

The president of General Motors, Mark Reuss, had estimated shortly before him on the same channel that a strike would constitute “a very, very sad outcome” with significant consequences.

“For one person in our factories who does not work, there are six others who do not work,” he said.

The last strike in the sector, which dates back to 2019, only affected GM. It lasted six weeks.

The UAW is demanding a 36% wage increase over four years, while the three American manufacturers have not gone further than 20% (Ford), according to the union leader.

The three historic giants of Detroit also refused to grant additional days of leave and to increase pensions, provided by funds specific to each company.

The consulting firm Anderson Economic Group (AEG) estimates that a ten-day strike could represent more than five billion dollars in lost revenue for the American economy.

And prolonged social conflict could have political consequences for President Joe Biden, whose economic record is criticized, particularly due to stubborn inflation.

A little over a year before the presidential election, he is walking on eggshells, between his stated support for the unions and the specter of a blow to the American economy.

He spoke by telephone Thursday evening with Shawn Fain and with the leaders of the manufacturers to provide an update on the negotiations.

Shawn Fain, president of the UAW, on August 20, 2023 in Warren, Michigan (AFP/Archives/JEFF KOWALSKY)

In mid-August, he pleaded for a “win-win” and “fair” agreement, strengthening workers’ rights during the transition to electric vehicles.

“Consumers and dealers are, in general, relatively protected from the effects of a short strike,” explained AEG vice president Tyler Theile.

But with inventories at a fifth of those in the industry in 2019, during the last strike at GM, they “could be hit much more quickly”, he said.

“We are arriving at the fourth quarter, a period during which we see the most sales of pick-ups and large SUVs, which are very profitable for these three manufacturers,” recalls Jessica Caldwell, of the specialized site Edmunds.com.

© 2023 AFP

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