UAW preparing to strike at Detroit Three automakers, rejects new offers

(Corrects first name in paragraph 2)

By David Shepardson and Joseph White

(Reuters) – The United Auto Workers on Wednesday outlined plans for a series of strikes targeting individual U.S. auto plants in what would be its first-ever simultaneous strike against the Detroit Three automakers if agreements are not reached by late Thursday.

“To win, we’re likely going to have to take action,” UAW President Shawn Fain said in a Facebook (NASDAQ:) Live address, adding the UAW was not planning company-wide walkouts if no deal was reached but would escalate if negotiations did not improve.

“We are preparing to strike these companies in a way they have never seen before.”

Fain said the Detroit Three automakers had offered 146,000 U.S. autoworkers pay raises of as much as 20% over four and a half years but called the hikes inadequate.

Fain outlined a strategy to “create confusion” with a series of strikes targeting individual U.S. plants if no deal is reached.

Coordinated strikes would mark the first-ever simultaneous labor stoppage at all three Detroit automakers and one of the largest U.S. industrial labor actions in recent years.

“We’re making progress … but we’re still very far apart on our key priorities,” Fain said, adding the UAW will disclose which plants it will strike Thursday when the current four-year contracts expire at 11:59 p.m. Eastern time.

Ford Motor (NYSE:) has proposed a 20% hike in pay, General Motors (NYSE:) 18%, and Chrysler-parent Stellantis (NYSE:) 17.5%, Fain said. That is less than half of the 40% pay hikes the union has sought, including an immediate 20% hike on ratification of a contract and 5% annual hikes, but higher than the initial offers the companies made.

The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.

Fain said automakers had rejected pension, 32-hour work week and other benefits. He also criticized proposed changes to profit sharing that would cut payments to workers.

A UAW strike that shuts the Detroit Three manufacturers could cost carmakers, suppliers and workers over $5 billion, Michigan-based Anderson Economic Group estimated, and could lead to a disruption of the broader auto supplier network.

Stellantis confirmed Wednesday it had made a third offer.

U.S. President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future,” White House economic adviser Jared Bernstein said Wednesday.

Biden called top executives from all three automakers last week to “encourage them to provide more forward-leaning offers to stay at the table,” Bernstein added.

AFL-CIO President Liz Shuler told Reuters autoworkers do not want to go on strike “but they will if they have to in order to reach a fair deal.”

Shuler noted there have been over 200 strikes this year in the United States. “It’s because the economy is broken. Workers are fed up,” she said.

The UAW and GM were meeting Wednesday in a new round of bargaining, sources said.

DETROIT RALLY PLANNED

The UAW said it is planning a rally in Detroit Friday that will include Fain, Senator Bernie Sanders and other members of Congress that would coincide with a first of day of walkouts.

The UAW is considering initially targeting only some specific plants for work stoppages at the Detroit automakers, two sources briefed on the matter said, adding the strike plan could still change.

Targeting strategic plants could quickly force automakers to halt U.S. production and could extend the time before the UAW’s $825 million strike fund is exhausted.

Ford last week hiked its offer to a 10% wage hike and lump sum payments after offering a 9% wage increase through 2027 and 6% lump sum payments.