Even after escalating its strike against Detroit automakers on Friday, the United Auto Workers (UAW) union still has plenty of leverage to force companies to accept significant increases in wages and benefits.
So far, just 12% of union members have taken part in the walkout. The UAW could, if it wished, significantly increase the number of strikers who could strike the assembly plants and parts facilities of General Motors, Ford and Stellantis, owner of the Jeep and Ram brands.
Yet the UAW’s emerging strategy also carries potentially significant risks for the union. By expanding its strike Friday from three major auto assembly plants to GM and Ford’s 38 parts distribution centers, the UAW risks angering people who may be unable to get their vehicles repaired at service centers missing parts.
The union’s idea appears to be that by striking at both vehicle production plants and parts plants, it will force automakers to negotiate a relatively quick end to the strike, which is now in full swing. its second week. But to achieve that, some analysts say the union may have to act even more aggressively.
“We think the next step for the UAW is the more nuclear option, which is a much broader strike on factories in and around Detroit,” said Daniel Ives, an analyst at Wedbush Securities. It would be a torpedo. »
All three companies said negotiations with the union were continuing Saturday, although officials were not expecting any major announcements.
The union began its pressure tactics two weeks ago by striking at three assembly plants – one at GM, one at Ford and one at Stellantis. In expanding the strike Friday, the UAW hit only GM and Stellantis parts distribution centers. Ford was spared the latest walkouts because of the company’s progress in negotiations with the union, UAW President Shawn Fain said.
The parts center strike aims to increase pressure on businesses by harming dealerships that service vehicles made by GM and Stellantis, the successor to Fiat Chrysler. Service shops are a profit center for dealers, so this strategy could prove effective. Millions of motorists depend on these shops to maintain and repair their cars and trucks.
“It hits dealers hard and it hurts customers who bought these very expensive vehicles in good faith,” said Art Wheaton, a labor expert at Cornell University.
The union has refused to publicly discuss its strike strategy. Mr. Fain has repeatedly said that a key part of his plan is to leave businesses uncertain about what the UAW will do next. Indeed, the union showed unusual discipline in sticking to its arguments.
At a picket Friday, Mr. Fain was asked whether a strike against parts centers would harm — and potentially alienate — consumers.
“What has hurt consumers in the long term is the fact that manufacturers have increased vehicle prices by 35% over the last four years,” he replied. It’s not because of our salaries. Our salaries increased by 6%, that of the CEO by 40%. »
Selling parts and performing service is very profitable for car dealerships. AutoNation reported a 46% gross profit margin at its dealership service shops last year.
Companies ready to react
To compensate for the loss of strikers, companies are evaluating their options, in particular by staffing spare parts warehouses with employees.
“We have contingency plans for different scenarios and are prepared to do what is best for our company and our customers,” said David Barnas, a GM spokesman. We evaluate if and when to implement these plans. »
Similarly, Stellantis spokesperson Jodi Tinson said: “We have a contingency plan in place to ensure we meet our commitments to our dealers and customers. » She declined to provide additional details.
In its negotiations with companies, the union highlights automakers’ huge recent profits and high CEO pay as it seeks to raise wages by about 36% over four years. The companies offered a little more than half that amount.
The companies said they could not afford to meet the union’s demands because they had to invest their profits in a costly transition from gasoline cars to electric vehicles. They immediately rejected certain demands, notably that of 40 hours of pay for a 32-hour work week.