United Auto Workers members strike the General Motors Lansing Delta Assembly Plant on September 29, 2023 in Lansing, Michigan.
Bill Pugliano | Getty Images
DETROIT – A shift in technique by the United Auto Workers union this week has some analysts questioning if the events are — maybe, counterintuitively — getting nearer to a deal.
On Wednesday the union initiated a shock work stoppage at Ford Motor’s Kentucky Truck Plant. The strike entails 8,700 employees and impacts probably the most essential plant, by far – chargeable for $25 billion in income yearly – that the union has walked out on because the strikes started Sept. 15. It’s anticipated to rapidly have a ripple impact on different Ford vegetation and suppliers.
It additionally ushered in what UAW President Shawn Fain characterised as a “new phase” of strikes and contract negotiations with Ford, General Motors and Chrysler-parent Stellantis, giving the union the ingredient of shock to maintain the automakers on edge through the ongoing negotiations, Fain informed members in a Friday presentation.
“We’re entering a new phase of this fight and it demands a new approach,” Fain stated Friday. “We’re done waiting until Fridays to escalate our strike.
“We are ready at any time to name on extra locals to face up and stroll out,” he said.
Until this week, Fain had announced all of the union’s new strikes on Fridays, during what has become a weekly livestreamed update for union members.
Some Wall Street analysts and industry experts think this week’s shift in strategy could be a sign that UAW leaders feel a deal with Ford is close, and that they’re increasing pressure as a tactic to get the deal over the finish line — and to help sell a potential tentative deal to their members.
“We proceed to consider the escalation at [Ford] this week is an indication the talks could also be coming to an finish. KY Truck is probably going Ford’s most worthwhile plant, and subsequently the strike is the very best degree of escalation, apart from a nationwide strike,” Wells Fargo analyst Colin Langan wrote in a Friday note. “This escalation would seemingly be finished to push for ultimate phrases.”
But the UAW’s leaders may be looking one more step ahead, to the process of selling a tentative deal with Ford to their members. The thinking is that to convince members to ratify a potential new contract, UAW President Shawn Fain and the union’s leadership will need to convince autoworkers that the union has fought as hard as possible to have their demands met. Striking Ford’s most profitable factory might be one way to do that.
Wolfe Research’s Rod Lache argued the Kentucky strike may allow UAW leadership to claim that they did all that could be done, especially if it leads to one or two more concessions from Ford.
“In one other week or two, Fain ought to have the ability to credibly announce that he has compelled Ford into one final capitulation (battery vegetation?), and that UAW members have secured the previous few ounces of wage, advantages, and job safety concessions that they will get,” Lache wrote Thursday to traders.
Factory workers and UAW union members form a picket line outside the Ford Motor Co. Kentucky Truck Plant in the early morning hours on October 12, 2023 in Louisville, Kentucky.
Luke Sharrett | Getty Images
Winning over workers
Only about 34,000 U.S. automakers with the companies, 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 will get Ford’s consideration in a short time,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University. “It additionally sends an enormous message to Stellantis and General Motors.”
Wheaton argues the escalation in Kentucky may just be the beginning. There are plenty more plants the union could hit for each of the automakers, including the full-size pickup truck plants owned by all three and large 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 include battery cell plant workers under the company’s national agreement, however details regarding how that will 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 doesn’t necessarily mean they’re spared.
“The lack of GM & STLA strike immediately, regardless that each haven’t matched F’s supply, can be in line with the UAW holding out probably the most worthwhile vegetation for a ultimate push,” he wrote in a Friday note.
Other outcomes?
All of that tea-leaf reading aside, rapid escalation-turned-resolution is just one potential outcome.
Another includes the automakers holding out for the union to deplete its resources, specifically its strike and defense fund. Or, the UAW could continue rotating strikes or filing additional unfair labor practice charges against the companies. Yet another outcome could see the sides seeking mediation or legal resources.
“I feel they have to be getting near some type of an settlement, otherwise you simply should conclude an inexpensive deal shouldn’t be within the making — and that that is actually extra a matter of a take a look at of will than the rest,” said Marick Masters, a business professor at Wayne State University in Detroit who specializes in labor issues.
An automaker also could submit what’s known as a “final, finest and ultimate supply,” which, as it states, is typically a final proposal when bargainers have reached an impasse.
Ford may be close to that point. An executive said Thursday the automaker was “on the restrict” of what it can offer UAW in terms of economic concessions.
The Detroit automakers have largely given into many of the union’s demands, but not all of them.
The companies haven’t waved the white flag on demands for a 32-hour workweek — which was always a nonstarter for the companies and which has largely fallen out of union talking points — and a 40% wage increase.
Ford was up to a record 23% wage increase in its recent contract proposal, with the others not far behind.
Then there’s the outstanding issues of benefits for retirees as well as a return to traditional pension plans and future battery plant jobs and workers.
Industry experts and sources familiar with the talks believe regardless of the outcome, the contracts will have ripple effects on the companies potentially in the way of reorganizations, cost cuts and future investments and jobs.
A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed that the companies will cut union jobs through product allocation, plant closures or other means to offset increased labor costs once the contracts are set.
“They’re going to should pay up. The query is how a lot,” said the longtime bargainer, who agreed to speak on the condition of anonymity. “This finally ends up with fewer jobs. That’s how the automakers lower prices.”
Source: www.cnbc.com”