Detroit's Big Three automakers failed to reach a new labor agreement before their contract with employees represented by the United Auto Workers expired at midnight Thursday, triggering one of the largest strikes to hit the U.S. in years.
UAW President Shawn Fain said in a Facebook Live address late Thursday that employees at three Ford, General Motors and Stellantis factories would immediately walk off the job: a GM assembly plant in Wentzville, Missouri, a Ford assembly plant in Wayne, Michigan, and a Stellantis assembly complex in Toledo, Ohio.
"Tonight, for the first time in our history, we will strike all three of the Big Three at once," he said.
Some 12,700 employees at those facilities will participate in the labor actions, the Reuters news service reports. Employees will be paid about $500 a week from UAW's $825 million strike fund, according to The Associated Press. Tapping just three plants to strike is a noteworthy strategy because it will "save the union from using large swaths of its $825M strike fund," Benjamin Salisbury, an automotive industry analyst at Height Securities, said in a research note Friday.
"The locals that are not yet called to join the stand-up strike will continue working under an expired agreement," Fain said.
He told CNN he doesn't expect any bargaining Friday but the sides may come back to the table Saturday.
Dozens of workers gathered outside of the Ford plant in Wayne as the midnight deadline approached, while a mass rally was 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 four-day workweek; 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 had 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.
Ford said in a later statement, "At 8 p.m. this evening at Solidarity House in Detroit, the United Auto Workers presented its first substantive counterproposal to Ford a few hours from the expiration of the current four-year collective bargain agreement."
After the strike was underway, Stellantis said it was "extremely disappointed by the UAW leadership's refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers. We immediately put the Company in contingency mode and will take all the appropriate structural decisions to protect our North American operations and the Company."
Stellantis, which was formed in 2021 in a merger between Fiat Chrysler and European automaker Groupe PSA, owns Chrysler, Dodge, Jeep and RAM, along with major foreign brands including Citroën, Peugeot and Maserati.
GM CEO Mary Barra told CBS News on Friday that the strike is happening despite the company's efforts to negotiate in good faith.
"We've been at the table since July 18," Barra said, adding that GM initially received over 1,000 demands from the UAW. "We have a historic offer on the table and we're at the table right now ready to keep going."
Barra also said GM is not able to give UAW members the wage increases they seek because some of the company's profit must be spent on developing new products, particularly electric vehicles.
"We have to make sure the company is going to succeed for the next 115 years and that means we need to invest," she said. "If we don't invest and have new products that customers want to buy, that impacts the number of vehicles we build, which directly impacts how many people are part of our manufacturing team."
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 on Thursday of the UAW's demands. "That would basically put our company out of business."
"If the strike lasts longer than three to four weeks, it will be moderately detrimental to GM and Ford's EV strategy in 2024. ... While the Detroit stalwarts battle with the UAW, there's a bottle of champagne that's being iced at Tesla headquarters," Wedbush Securities analyst Dan Ives said in a report.
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 disrupt the domestic auto industry, cause car prices to rise, and lead to nearly $6 billion in losses in wages and earnings, while reducing overall U.S. economic growth by as much as 0.3%, analysts warn.
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
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