Strategic Insights: Stellantis’ Potential for a Prolonged UAW Strike, Surpassing Ford or GM

The United Auto Workers labor union launched targeted strikes against the three Detroit automakers early Friday morning. The stoppages affect three plants that make popular models such as the Ford Bronco, Chevrolet Colorado, and Jeep Wrangler.

This marks the first time in history that the UAW has simultaneously struck all three of the Detroit automakers. However, the strikes may unfold differently in the coming days, with Stellantis potentially facing more challenges in reaching a deal compared to its crosstown rivals, Ford Motor and General Motors.

Stellantis faces a unique issue that its local competitors do not. The company, which was formed in 2021 through a merger between Fiat Chrysler Automobiles and French automaker Peugeot, has more production capacity worldwide than necessary. Stellantis has plans to close or sell 18 of its U.S. facilities, including factories and parts depots, a move that the union is unlikely to accept without resistance.

Stellantis appears to have prepared for a prolonged strike, as data shows it had more vehicles in its U.S. dealer inventories at the beginning of September than its crosstown rivals. This inventory is measured in terms of “days’ supply,” and according to Cox Automotive, all four of Stellantis’ U.S. brands had over 100 days’ worth of vehicles on dealer lots or in transit, whereas GM and Ford had considerably lesser numbers.

On the other hand, the UAW’s strike against Ford may be relatively short-lived. UAW President Shawn Fain and Ford executives have hinted towards progress in recent days, suggesting that Ford is closer to reaching an agreement with the union. The UAW chose to strike only part of Ford’s Michigan Assembly Plant, specifically the areas where vehicles are painted and where final assembly takes place. In contrast, all UAW-represented workers at GM’s assembly plant in Wentzville, Missouri, and Stellantis’ Jeep Wrangler factory in Toledo, Ohio, went on strike.

General Motors may also avoid a lengthy strike. Details of GM’s final offer before the strike suggested that it was similar to Ford’s, with a 20% wage increase over the four-year contract term, increased vacation days, two weeks of parental leave, and other concessions.

If Ford reaches an agreement with the UAW soon, GM could follow suit using Ford’s deal as a template.

However, as of Friday morning, Stellantis appeared to be preparing for a prolonged battle. In a statement following the walkouts, the company expressed disappointment in the UAW’s refusal to engage in a fair agreement and stated its intention to take necessary actions to protect its North American operations.

Following customary practice after a strike, negotiations between the UAW and the automakers will temporarily pause on Friday but are expected to resume over the weekend.