UAW Expands GM Walkout after Deal to End Stellantis Strike

Reuters

11:48 JST, October 29, 2023

The United Auto Workers on Saturday expanded its strike against General Motors GM.N to include its Spring Hill, Tennessee, engine plant, a move that could stall GM’s large pickup production and increase its financial pain.

The expansion of the seven-week strike leaves GM the only Detroit automaker without a contract deal. Chrysler-owner Stellantis STLAM.MI reached agreement with the UAW on Saturday and Ford F.N on Wednesday.

Those deals won workers a record 25% jump in wages over the 4-1/2-year contract and allow the companies to restart their profitable truck assembly lines.

At GM, people familiar with the bargaining said sticking points in the UAW negotiations include retirement benefits and issues related to temporary workers. GM has more retirees than either Ford or Stellantis and increases to pension benefits for workers hired before 2007 cost GM more than its rivals.

“We are disappointed by GM’s unnecessary and irresponsible refusal to come to a fair agreement,” UAW President Shawn Fain said in a statement to Reuters.

GM said in a statement that two of its large pickup plants could be affected by the Spring Hill walkout and that it wanted to reach an agreement quickly.

The UAW is already striking at GM’s Arlington, Texas, assembly plant, which makes the Chevy Tahoe and Suburban and Cadillac Escalade. GM said earlier this week that this walkout was costing it $400 million a week.

The Spring Hill plant, which employs 4,000 workers, supplies motors to nine assembly plants that build several of the automaker’s best-selling and most profitable vehicles.

UAW lawyer Benjamin Dictor said in a social media post: “Imagine, everyone is making trucks but you. If everyone else could get it done, what does that say about you?”

No more talks were expected on Saturday and it was unclear when GM and UAW would reconvene, sources familiar with the matter said.

STELLANTIS DEAL

The deal with Stellantis follows a template set by UAW and Ford. The deals will amount to total pay hikes of more than 33% when compounding and cost-of-living are factored in. The contracts will start with an initial increase of 11%.

“We look forward to welcoming our 43,000 employees back to work and resuming operations,” Stellantis said on Saturday.

The Ford and Stellantis agreements will have to be ratified by all workers.

U.S. President Joe Biden said in a statement the Stellantis “contract is a testament to the power of unions and collective bargaining to build strong middle-class jobs.”

The deal includes an agreement to reopen Stellantis’ assembly plant in Belvidere, Illinois, which will now build midsize trucks, Fain said in a video on social media. The trucks could compete against Ford’s Ranger and GM’s Chevrolet Colorado and GMC Canyon models.

The factory was previously shuttered and became a rallying point for the union’s bargaining campaign. Stellantis also agreed to build a battery plant next to the Belvidere plant, UAW said.

Illinois Governor Jay Pritzker called the agreement a “huge win for Illinois” and said the state will offer incentives to help offset the automaker’s costs.

Stellantis will also keep open two facilities that were under threat of closure — an engine manufacturing complex in Trenton, Michigan, and a machining operation in Toledo, Ohio, Boyer said.

In all, the automaker committed $19 billion in new investments in U.S. operations and the creation of 5,000 jobs where previously it planned to cut 5,000 jobs, Fain and Boyer said.

The UAW has won the right to strike over product investment decisions, Fain said.

INCREASED COSTS

Fain accused the Detroit automakers of enriching executives and investors while neglecting workers and said the UAW’s success would help blue-collar workers across the country.

The companies argued that UAW’s demands would significantly raise costs and put them at a disadvantage against EV leader Tesla TSLA.O and foreign brands such as Toyota Motor 7203.T, which are nonunionized.

Ford expects the new contract will add $850 to $900 in labor cost per vehicle. Tesla already had a labor cost advantage of roughly $20 per hour, analysts have said.

The UAW negotiations coincided with high-profile labor campaigns by striking Hollywood writers and actors and by workers at delivery giant UPS UPS.N. With staff shortages at many businesses, the labor movement appeared re-energized after decades of decline.

The contract talks drew the attention of Biden and Republican rivals who see Michigan and other prominent auto-producing states as pivotal to their 2024 campaign strategies.