Step by step, the UAW is turning up the pressure on the Detroit Three automakers as it finishes off the latest round of “Stand-Up” strikes with a walkout at the General Motors plant in Arlington, TX, the company’s largest source of cash.
The walkout at Arlington, which GM describes as “unnecessary and irresponsible,” completes the latest phase of the UAW’s efforts to meet its demands for historic contracts, according to analysts, by placing pressure on the automakers’ largest sources of revenue and profits from expensive pickup trucks and SUVs.
“Another record quarter, another record year. As we’ve said for months: record profits equal record contracts,” UAW President Shawn Fain says after GM releases its earnings for the third quarter as the union sets up picket lines in Texas. “It’s time GM workers, and the whole working class, get their fair share.”
Arlington is the center of GM’s immensely profitable fullsize SUV business, which the company acknowledges is a major source of its profits. Its products include the Chevrolet Suburban and Cadillac Escalade, some of the highest-margin vehicles in GM’s lineup.
“Over the last several years, we have bolstered our position in high-margin segments, including fullsize pickups, fullsize SUVs, and large luxury SUVs. We did this by managing capacity to meet demand, expanding the range of premium trim series that we offer, and with innovations,” GM Chair Mary Barra observes during the company’s third-quarter earnings call with analysts.
“Last week, we provided a comprehensive offer to the UAW that increased the already substantial and historic offers we have made by approximately 25% in total value.”
Barra adds: “I know the UAW contract is one of the biggest sources of uncertainty right now. But I want to remind you with what I said earlier – we will not agree to a contract that isn't responsible for our employees and for our shareholders.”
The strike in Texas follows walkouts that began Oct. 11 at Ford’s largest source of revenue, the Kentucky Truck Plant (pictured, below), and continued Oct. 23 at the Stellantis pickup truck plant In Sterling Heights, MI. Both plants are major sources of revenue and profits for the two automakers, according to the UAW’s analysis of the automaker’s finances.
The Arlington walkout pushed the number of striking UAW members past 45,000, or one-third of all hourly workers employed by the Detroit Three. Thousands more have been laid off because of parts shortages or other supply chain interruptions.
The UAW’s action at all three plants should not have been a surprise as Fain had warned the automakers the union could tie up their most valuable factories if they did not offer more.
“So, despite all the bluster about how much the companies have ‘stretched,’ there’s clearly still room to move,” Fain says during his most recent Facebook Live appearance.
“GM in particular is worrying. They tell us they need a two-tier wage progression because they expect to do a lot of hiring,” adds Fain, who had mentioned both Sterling Heights Assembly and Arlington in his previous appearances on Facebook Live.
“On the heels of their previous quarter, which set a post-bankruptcy record in terms of revenue, it is clear that GM can afford a record contract and do more to repair the harm done by years of falling real wages and declining standards across the Big Three,” the UAW president says in response to GM’s third-quarter financial report.
However, the negotiations are not at an impasse, according to sources familiar with the bargaining. New proposals are being passed around even as the UAW tries to raise the pressure on all three companies, the sources say.
The first wave of targeted strikes on Sept. 15 took out three plants building popular vehicles such as the Jeep Wrangler, Chevrolet Colorado and Ford Bronco. But it was more of a demonstration of the UAW’s intention to back up its demands for a big contract and the end of tiers.
During the second week, the UAW walked out at 38 GM and Stellantis parts depots from coast to coast, expanding the strike beyond the Midwest and putting pressure on dealers needing replacement parts for their customers. During the third week of the strike, the UAW shuttered SUV plants belonging to GM and Ford.
The union’s pressure through the limited, though steadily expanding strikes, has succeeded to a point. The general wage increases offered by each company are up to 23% from 9% on the table at the start of the strike, according to information released by both the UAW and the three automakers.
But the strike is now 40 days long, making it as long as the strike against only GM in 2019, and the automakers are continually emphasizing the walkout is putting pressure on union members’ personal finances. It is not difficult to find grumbling among union members on social media, suggesting it is time to settle.
Despite company efforts to appeal directly to restless UAW members, Fain says he finds support for the strike remains strong. There is no organized movement calling for the union to put the various contract offers to a vote, according to a source familiar with the progress of the talks.
The pain radiating from the strike is considerable, according to a MEMA Vehicle Suppliers Assn. survey. In last week’s survey, the percentage of smaller suppliers that are concerned with their internal financial viability increased dramatically to 42%.
