United Auto Staff members strike the General Motors Lansing Delta Assembly Plant on September 29, 2023 in Lansing, Michigan.
Bill Pugliano | Getty Images
DETROIT – A shift in strategy by the United Auto Staff union this week has some analysts wondering if the parties are — perhaps, counterintuitively — getting closer to a deal.
On Wednesday the union initiated a surprise work stoppage at Ford Motor’s Kentucky Truck Plant. The strike involves 8,700 staff and affects essentially the most crucial plant, by far – accountable for $25 billion in revenue annually – that the union has walked out on because the strikes began Sept. 15. It’s expected to quickly have a ripple effect on other Ford plants and suppliers.
It also ushered in what UAW President Shawn Fain characterised as a “recent phase” of strikes and contract negotiations with Ford, General Motors and Chrysler-parent Stellantis, giving the union the element of surprise to maintain the automakers on edge throughout the ongoing negotiations, Fain told members in a Friday presentation.
“We’re entering a recent phase of this fight and it demands a recent approach,” Fain said Friday. “We’re done waiting until Fridays to escalate our strike.
“We’re prepared at any time to call on more locals to get up and walk out,” he said.
Until this week, Fain had announced the entire union’s recent strikes on Fridays, during what has turn out to be a weekly livestreamed update for union members.
Some Wall Street analysts and industry experts think this week’s shift in strategy could possibly be an indication that UAW leaders feel a take care of Ford is close, and that they are increasing pressure as a tactic to get the deal over the finish line — and to assist sell a possible tentative deal to their members.
“We proceed to imagine the escalation at [Ford] this week is an indication the talks could also be coming to an end. KY Truck is probably going Ford’s most profitable plant, and due to this fact the strike is the very best level of escalation, apart from a national strike,” Wells Fargo analyst Colin Langan wrote in a Friday note. “This escalation would likely be done to push for final terms.”
However the UAW’s leaders could also be looking yet one more step ahead, to the technique of selling a tentative take care of Ford to their members. The pondering is that to persuade members to ratify a possible recent contract, UAW President Shawn Fain and the union’s leadership might want to persuade autoworkers that the union has fought as hard as possible to have their demands met. Striking Ford’s most profitable factory could be one solution to try this.
Wolfe Research’s Rod Lache argued the Kentucky strike may allow UAW leadership to say that they did all that could possibly be done, especially if it leads to at least one or two more concessions from Ford.
“In one other week or two, Fain should give you the option to credibly announce that he has forced Ford into one last capitulation (battery plants?), and that UAW members have secured the previous few ounces of wage, advantages, and job protection concessions that they’ll get,” Lache wrote Thursday to investors.
Factory staff and UAW union members form a picket line outside the Ford Motor Co. Kentucky Truck Plant within the early morning hours on October 12, 2023 in Louisville, Kentucky.
Luke Sharrett | Getty Images
Winning over staff
Only about 34,000 U.S. automakers with the businesses, or roughly 23% of UAW members covered by the expired contracts with the Detroit automakers, are currently on strike.
“Hitting a really high-dollar, high-profitable plant, it definitely gets Ford’s attention in a short time,” said Art Wheaton, a labor professor on the Employee Institute at Cornell University. “It also sends an enormous message to Stellantis and General Motors.”
Wheaton argues the escalation in Kentucky could be the start. There are plenty more plants the union could hit for every of the automakers, including the full-size pickup truck plants owned by all three and huge SUV plants at GM and Stellantis.
GM avoided a strike at its most profitable SUV plant in Texas last week with a last-minute offer to incorporate battery cell plant staff under the corporate’s national agreement, nonetheless details regarding how that will likely be done are believed to be still being negotiated.
While Fain declined to expand strikes against GM and Stellantis Friday, Wells Fargo’s Langan thinks that does not necessarily mean they’re spared.
“The shortage of GM & STLA strike today, though each haven’t matched F’s offer, could be consistent with the UAW holding out essentially the most profitable plants for a final push,” he wrote in a Friday note.
Other outcomes?
All of that tea-leaf reading aside, rapid escalation-turned-resolution is only one potential consequence.
One other includes the automakers holding out for the union to deplete its resources, specifically its strike and defense fund. Or, the UAW could proceed rotating strikes or filing additional unfair labor practice charges against the businesses. Yet one more consequence could see the edges searching for mediation or legal resources.
“I believe they have to be getting near some type of an agreement, or you simply should conclude an affordable deal isn’t within the making — and that this is absolutely more a matter of a test of will than the rest,” said Marick Masters, a business professor at Wayne State University in Detroit who focuses on labor issues.
An automaker also could submit what’s often known as a “last, best and final offer,” which, because it states, is usually a final proposal when bargainers have reached an impasse.
Ford could also be near that time. An executive said Thursday the automaker was “on the limit” of what it will probably offer UAW by way of economic concessions.
The Detroit automakers have largely given into most of the union’s demands, but not all of them.
The businesses have not waved the white flag on demands for a 32-hour workweek — which was at all times a nonstarter for the businesses and which has largely fallen out of union talking points — and a 40% wage increase.
Ford was as much as a record 23% wage increase in its recent contract proposal, with the others not far behind.
Then there’s the outstanding issues of advantages for retirees in addition to a return to traditional pension plans and future battery plant jobs and staff.
Industry experts and sources conversant in the talks imagine whatever the consequence, the contracts may have ripple effects on the businesses potentially in the best way of reorganizations, cost cuts and future investments and jobs.
A former high-ranking bargainer for one in every of the automakers told CNBC that it’s nearly guaranteed that the businesses will cut union jobs through product allocation, plant closures or other means to offset increased labor costs once the contracts are set.
“They’ll should pay up. The query is how much,” said the longtime bargainer, who agreed to talk on the condition of anonymity. “This finally ends up with fewer jobs. That is how the automakers cut costs.”