The United Auto Workers (UAW) union announced on Friday that it has decided not to expand its strikes against the Big Three automakers in Detroit, following General Motors’ (GM) breakthrough concession on unionizing electric vehicle (EV) battery plants.
In a video appearance, UAW President Shawn Fain informed workers that additional plants may be added to the strikes at a later time. This decision came shortly after GM agreed to include EV battery plants in the UAW’s national contract, essentially guaranteeing their unionization.
Fain, donning a T-shirt emblazoned with “Eat the Rich,” expressed his belief that GM’s move will reshape the future of the union and the auto industry. He stated that GM made this change in response to the union’s threat to strike at a highly profitable plant in Arlington, Texas, which produces large SUVs.
He remarked, “Today, under the threat of a major financial hit, they leapfrogged the pack in terms of a just transition” from combustion engines to electric vehicles. He added, “Our strike is working, but we’re not there yet.”
Alongside substantial general pay raises, cost of living pay, and the restoration of pensions for new hires, the union aimed to represent ten battery factories proposed by the companies. However, the automakers argued that the plants, mainly joint ventures with South Korean battery manufacturers, needed to be negotiated separately.
This development means that the four U.S. GM battery plants will now fall under the union’s master agreement, and GM will engage in negotiations with the union. Marick Masters, a business professor at Wayne State University, labeled this as a “monumental development.”
However, Masters cautioned that the details of GM’s offer, which have been provided in writing, need to be thoroughly examined. He added, “GM went far beyond and gave them this. And I think GM is thinking they may get something in return for this on the economic items.”
GM, Ford, and Stellantis declined to comment immediately on Fain’s announcement. After the announcement, share prices of all three automakers increased in anticipation of potential agreements. GM’s shares closed Friday with an almost 2% gain, Stellantis rose 3%, and Ford rose just under 1%.
The automakers have been reluctant to include battery plants in the national UAW contracts, claiming that the union cannot represent workers who have not been hired yet. They also argue that joint venture partners must be part of the negotiations.
Over the past two weeks, the union has expanded its strikes that initially began on September 15, targeting one assembly plant from each of the three automakers. The strikes have now extended to 38 parts-distribution centers operated by GM and Stellantis. Ford, however, was exempted from additional strikes due to progress in negotiations with the union.
Last week, the union added a GM crossover SUV plant in Lansing, Michigan, and a Ford SUV factory in Chicago, but spared Stellantis from further strikes due to the progress made in talks.
Automakers have consistently expressed their willingness to offer pay raises but fear that a costly contract would make their vehicles more expensive than those produced at non-union U.S. plants operated by foreign corporations.
The union argues that labor expenses account for only 4% to 5% of a vehicle’s cost and believes that the companies, which are making billions in profits, can afford substantial raises.
The union strategically organized its walkouts to allow the companies to continue producing their bestselling and most profitable vehicles – pickup trucks and SUVs. In contrast, it previously halted assembly plants in Missouri, Ohio, and Michigan that manufacture midsize pickups, commercial vans, and midsize SUVs, which are less profitable than larger vehicles.
In previous years, the union would select one company as a potential strike target and then reach a contract agreement with that company to serve as the blueprint for the others. However, this year Fain introduced a new strategy of targeting a limited number of facilities across all three automakers.
Currently, approximately 25,000 workers, or about 17% of the union’s 146,000 members at the three automakers, are on strike.
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