The United Auto Workers union hit the picket lines shortly after midnight, striking all three Detroit car companies at once for the first time. The work stoppages targeted factories in Michigan, Ohio and Missouri.
UAW officials initiated the walkout after failing to clinch new labor deals with General Motors, Ford Motor and Jeep-maker Stellantis for about 146,000 U.S. factory workers. Bargaining went late into the night, but the two sides remained too far apart to avoid a walkout at the 11:59 p.m. ET deadline.
Workers at Ford’s Bronco plant in Detroit, a Stellantis Jeep factory in Toledo, Ohio, and a GM pickup plant in Missouri were instructed to leave their posts, beginning what could be a series of sporadic walkouts done without notice at additional auto factories.
The three targeted assembly factories, which combined employ about 12,700 hourly workers, build some of the companies’ highly profitable and sought-after pickup trucks and SUVs.
In midday trading Friday, shares of GM were up 1.4%, while Ford gained less than 1%. Stellantis stock rose 1.8%.
A Ford spokeswoman called the union’s latest demands unsustainable and said the company was committed to reaching an agreement. Stellantis said it was disappointed in the strike, adding that union leaders refused to engage in a responsible manner.
GM echoed that sentiment, saying it had made an unprecedented offer to the union.
“I’m extremely frustrated and disappointed. We don’t need to be in a strike right now,” GM Chief Executive Mary Barra told CNBC on Friday.
President Biden was expected to deliver remarks on the UAW strike Friday from the White House. The president planned to say he was dispatching White House senior adviser Gene Sperling and acting Labor Secretary Julie Su to Detroit in the coming days to offer support to the parties in reaching a fair contract, according to two people familiar with the plans.
Sperling and Su, who have been in daily touch with the UAW and auto companies in recent weeks, won’t be directly involved in the negotiations or playing the role of a mediator, the people said.
Tim Kruger, a longtime employee at the Jeep plant in Toledo, was among a group of supporters who showed up to cheer for workers as they exited the building after midnight amid the sound of blaring horns.
“I don’t know if anybody is happy that we’re going to strike,” he said. “But we’re going to fight for what’s right.”
UAW President Shawn Fain has described the approach as a way to sow confusion at the companies and give his negotiators more leverage at the bargaining table. He said more sites would likely go down if talks with the automakers stall.
“The money is there. The cause is righteous. The world is watching and the UAW is ready to stand up,” Fain told union members during a Facebook livestream. “This is our defining moment.”
Fain said the union has never conducted strikes across all three companies in the union’s 88-year history. The UAW’s plans for targeted work stoppages would bring only a fraction of the overall workforce off assembly lines.
That strategy would help preserve the union’s $825 million fund more than a full strike of all 146,000 workers, but stymie output and disrupt automakers’ production planning. It also could prove risky, because employees who remain on the job likely would be working without a contract, a prospect that has sparked concern among some members.
The prospect of a protracted strike is fraying nerves both within the auto industry and beyond Detroit.
President Biden has had calls with executives at the carmakers, as well as the union chief. Investors are sizing up the potential hit to the bottom lines of the three automakers and their hundreds of publicly traded suppliers.
Economists are weighing the fallout from a potential labor disruption at GM, Ford and Stellantis, which combined produce about half of the roughly 15 million vehicles made in the U.S. annually.
Fain, a firebrand who was elected by a slim majority of UAW members early this year, has framed the negotiations as a referendum on what the blue-collar workers deserve in an era where companies have been notching profit gains and other unions have scored major wage increases.
Bianca Harris, who has worked at Ford’s Michigan Assembly plant for nearly three years, said she was shocked and honored when she heard she would be walking off the line with her co-workers.
“I never thought I’d be living through a strike,” she said.
The stalemate comes as both the union and the automakers attempt to reinvent themselves during widespread change in the car business.
UAW leaders want to secure the union’s place in the dawning electric-vehicle age, and assure that unionized workers fill the dozens of new battery and EV assembly plants that are springing up from tracts of farmland in Tennessee, Indiana and elsewhere. Fain also is vying to restore member trust after a multiyear bribery scandal rocked the union’s leadership.
Automakers, meanwhile, are trying to transform themselves into lean, tech-forward companies.
The companies have funneled billions of dollars into EV and battery production, costly bets that could take years to pay off. They have to demonstrate to investors that they are reducing spending in other parts of the business, and a sharp increase in labor costs would come at a bad time.
Car executives also are wrestling with the high costs of moving to battery-powered vehicles as they race to close the gap on EV leader
and worry that a richer labor agreement would further exacerbate their cost disadvantage to rivals, whose factory workforces aren’t unionized.
Under the Detroit companies’ current contract, hourly labor costs average out around $65, including benefits, compared with Tesla’s $45 and $55 for Asian automakers.
Analysts estimate the union’s initial demands would roughly double automakers’ hourly labor costs. The UAW has said that labor accounts for less than 5% of the companies’ costs per vehicle.