Strikes continue in American auto giants, and Ford lays off 600 employees

For three days, employees of the “Detroit Big Three” — Ford, General Motors, and Stellantis — have been on strike for better wages and working conditions. The United Auto Workers (UAW) union said this weekend that discussions with employers had been “reasonably productive.” On Thursday, Ford CEO Jim Farley announced that responding to the UAW’s demands would bankrupt his company.

It is the first time in history that the three giants are facing industrial action at the same time. Currently, the strikes affect only one plant per company, putting production of the Jeep Wrangler, Ford Bronco, Chevrolet Colorado and others at risk. About 12,700 UAW members are participating in the strike. The number of union members is 150,000.

The strike began after the previous four-year wage and labor agreement expired on Thursday evening without reaching an agreement for the next four years. The UAW is demanding a 36 percent pay increase over that entire period. According to the union, this is similar to the increase in salaries for senior management of the Big Three companies in the past four years. The union also seeks a shorter workweek, more job security and improved retirement plans.

It is encouraging that there is still movement in the positions of the negotiating parties. Initially, the UAW demanded a 40 percent wage increase. Stellantis, the parent company of Chrysler, among others, said Saturday that it has improved its contract proposal. With a 20 percent pay increase over the entire period, half of it immediately, the company is now on par with rivals General Motors and Ford.

What doesn’t improve the mood is that work will not resume at the Stellantis assembly plant in Belvedere, Illinois. Production there has been halted since February, according to Stellantis due to the high cost of producing electric vehicles. The automaker suggested to the UAW that it would resume production if a wage agreement was reached before Thursday night’s deadline.

This sparked angry reactions from the union. “This is how Stellantis sees these employees.” Like a bargaining chip.

Hard against hard

Things are also moving quickly for Detroit’s two other major automakers. Ford said on Friday that it had laid off 600 employees as a result of the strike, and General Motors informed 2,000 employees in Kansas that the plant there would likely close on Monday or Tuesday.

Union President Sean Fine described reports of the planned layoffs as an attempt by automakers to force union members to accept a weaker settlement. “Their plan will not work. We will last a day longer than them, and we will do everything in our power for economic and social justice among the Big Three.

The Big Three may be in a similar situation, but that doesn’t mean they’re in the same amount of pain from the hits. A good example of this is General Motors. While Ford and Stellantis will introduce significantly revised models of combustion-engined cars next fall, GM has almost all bets on starting or increasing production of new models of electric cars. This includes the all-electric version of classic cars like the Chevrolet Silverado and GMC Sierra pickup trucks.

In the event of a long strike, General Motors will face more problems than Ford and Stellantis in producing electric cars, Reuters reported after a tour of sector analysts. However, there is also a bright spot, because long-term strikes also give GM time to address long-standing problems.

GM problems

For example, General Motors has been struggling with battery production delays all year. As a result, for example, only 48 units of the Hummer EV were delivered in the second quarter. There is already a waiting list of over ninety thousand for this quintessential American masterpiece.

Moreover, the company that supplies GM with automation equipment is experiencing supply problems, CEO Mary Barra told analysts in July. As a result, the car manufacturer had to manually assemble the battery modules.

The strikes give GM the opportunity to address those technical and operational issues. Once labor protests end, production could rise dramatically. However, this labor dispute remains at GM’s expense, Barra said. The cost of production outages could reach billions.

“At this crucial time for electric vehicles, model launches, distribution and marketing, with competition for electric vehicles increasing across the board, the timing of this General Motors strike could not have been more timely,” said Daniel Ives, an auto sector analyst from Wedbush Asset Management. “Worse than that.” Statement. Note.