Detroit’s Big Three automakers failed to reachbefore their contract with employees represented by the United Auto Workers expired at midnight Thursday, setting the stage for one of the largest strikes to hit the U.S. in years.
The UAW said it now plans to execute a so-called stand up strike strategy in which employees at a small number of Ford, General Motors and Stellantis factories are walking off the job on Friday. Employees, who technically are now working under an expired labor contract, will be paid through the UAW’s strike fund, which sits at $825 million.
“Tonight, for the first time in our history, we will strike all three of the Big Three at once,” UAW President Shawn Fain said in a Facebook Live address late Thursday night.
Fain called on three factories to strike immediately beginning Friday. They included a GM assembly plant in Wentzville, Missouri, a Ford assembly plant in Wayne, Michigan, and a Stellantis assembly complex in Toledo, Ohio.
“The locals that are not yet called to join the stand-up strike will continue working under an expired agreement,” Fain said.
Dozens of workers gathered outside of the Ford plant in Wayne as the midnight deadline approached. A mass rally was also scheduled for Friday afternoon in downtown Detroit.
“We will show our strength and unity on the first day of this historic action,” Fain said. “All options remain on the table.”
The work stoppage marks the first strike at the Detroit automakers since workers walked out on GM in 2019.
The UAW’s demands include a 36% pay increase across a four-year contract; pension benefits for all employees; limited use of temporary workers; more paid time off, including a; and more job protections, including the right to strike over plant closings.
With talks at an impasse on Thursday, leaders at Ford, General Motors and Stellantis (formerly Fiat Chrysler) said they have made multiple offers to the UAW in recent weeks in hopes of inking a new deal for the union’s 145,000 workers.
“I think they’re preparing for a historic strike with all three companies,” Ford CEO Jim Farley told CBS News earlier Thursday.
Although the Big Three have been unwilling to fulfill all of the UAW’s demands, they contend they’ve made reasonable counteroffers and are willing to negotiate further. In outlining their position, automaker officials say that they’re under enormous pressure to keep costs and car prices low in order to compete with Tesla and foreign car makers, especially as the companies compete for a stake in the growing electric vehicle market.
“What their initial offer was, is to pay our hourly workers about $300,000 each, and to work four days,” Farley said of UAW Thursday. That would basically put our company out of business.
Although Fain acknowledged that the automakers had upped their wage offers, the proposals remain inadequate, he said. Ford has offered 20% over 4.5 years, while GM and Stellantis offered 18% and 17.5% over four years, respectively.
The strike could cause a surge in car prices, result in $5.6 billion in economic losses for the automakers, according to one forecast and reduce the nation’s GDP by as much as 0.3%, according to Oxford Economics.