At 0:00 EDT on Friday, September 15, labor agreement negotiations between the United Auto Workers (UAW) and the three major auto giants failed, and a general strike in the US auto industry that spread to multiple states began. Workers at a Ford Motor Co. plant in Michigan that makes the Bronco SUV, a General Motors Co. plant in Missouri that assembles the Chevrolet Colorado pickup truck and a plant in Strantis, Ohio that makes the Wrangler Jeep vehicle went on strike after the midnight deadline for the new contract passed. According to statistics, these three factories account for 9% of North American automobile production.
The UAW stated that the strike started at a few factories, rather than a full-scale strike action, aiming to methodically reduce vehicle production that can bring profits to these car companies, while minimizing the impact on the UAW strike fund. The UAW said it would add strike locations based on the progress of negotiations.
On Friday afternoon, UAW President Shawn Fain said in a statement:
Over the past six weeks of negotiations, the automakers have chosen not to get down to business.
Today we are gathering with our members. Tomorrow, we are expected to be at the negotiating table. As the three major auto giants continue to jack up prices for American consumers, rip off American taxpayers, and shortchange American workers, we will continue to fight for justice for the working class.
Biden attempts to mediate labor-management negotiations
After talks with labor and management on Thursday, U.S. President Biden said on Friday that he would send two government officials, the acting labor secretary and the White House adviser, to Detroit to try to mediate between the two parties to promote an agreement.
Biden said U.S. auto companies were not sharing record profits fairly with union members but hoped they could "reach a win-win deal":
These companies have already made some significant offers, but I believe they should go further to ensure that record corporate profits mean the UAW gets record contracts.
Thanks to the extraordinary skill and sacrifice of their workers, car companies have achieved record profits over the past few years. In my opinion, these record profits are not being shared equitably with workers.
Biden said:
No one wants the UAW to go on strike. The UAW and the automakers are still working hard to negotiate a collective bargaining agreement, and I appreciate that. I hope that all parties can return to the negotiating table and reach an agreement.
The strike puts Biden in a dilemma over whether to support unions or support clean energy policies. He calls himself "the most pro-union president in American history," but the UAW's demands are in part a response to his electric vehicle policy, which the union says will cost jobs.
Senator Sanders, a representative of the radical wing of the Democratic Party, supported the strike on Friday. He criticized the high salaries of the CEOs of the three major automakers:
It's time to end your greed! It’s time to treat your employees with the respect and dignity they deserve and it’s time to sit down and negotiate a fair contract!
Let us unite to end corporate greed, let us unite to rebuild the disappearing middle class, and let us create an economy that works for everyone, not just the top one percent.
The three major automakers consider the strike "unnecessary" and "extremely disappointing"
GM CEO Mary Barra expressed her displeasure with the strike, saying the company's latest offer to the union was the best in its 115-year history:
I am extremely disappointed and frustrated, this was an unnecessary strike.
GM is offering a 20% pay increase over four years, a cost-of-living allowance and subsidies for existing pensioners. Barra also said that GM will build electric vehicle power units in existing factories to ensure that workers find jobs in the electric vehicle era:
As we make this transition, we have jobs for all of our employees. We have a plan to bring all employees together through the transformation.
Barra said the UAW strike "had no need to happen" and that she has been directly involved in negotiations. She said the company is ready to continue operating during the shutdown.
General Motors said that 2,000 workers at the Fairfax Assembly Plant in Kansas City were idle due to the "ripple effect" of a strike at the Wentzwille Assembly Plant in Missouri.
Strantis said it was "extremely disappointed" that UAW leadership refused to engage in negotiations. The company stated:
We immediately placed the company in emergency mode and will take all appropriate structural decisions to protect our North American operations.
Ford said the union had taken "little to no action" on the initial demands, which it warned would give non-union rivals Tesla Inc and Toyota Motor Corp an extra boost.
On Friday afternoon, Ford announced that it would temporarily lay off about 600 workers at a Michigan assembly plant where the UAW is on strike. Ford said the temporary layoffs were mainly due to the strike disrupting the production chain. Workers who are temporarily laid off cannot apply for unemployment benefits. In addition, Ford expects to have to temporarily lay off more workers if the strike continues.
The general strike has officially begun, and the market reaction is calm. What is the union planning?
On Friday, Ford Motor fell slightly, General Motors rose nearly 1%, and Strantis rose more than 2%, outperforming the U.S. stock market.
Market analysts believe that the market's lukewarm response to the strike at the three major automakers reflects the uncertainty about how long the strike will last and to what extent the scope of the strike will expand.
Some analysts believe that although the start of the general strike was more restrained than some expected, it sent a signal to Detroit Motor Company that if negotiations drag on, actions may escalate.
Regarding the selection of striking factories in the early stages of the strike, some analysts believe that this action may be more damaging. Some analysts expressed surprise that the UAW did not target the more profitable full-size pickup truck plants or key parts plants, both of which may cause a greater blow. The UAW said the longer the negotiations go on, the more factories it plans to target, launching a series of sporadic strikes with little notice aimed at disrupting auto companies' production plans.
Some media reports believe that in addition to large car companies, once a strike occurs, auto parts suppliers will also be implicated, especially some small suppliers, who may lack the financial resources to deal with a strike, even a short strike. American consulting firm Anderson Economics estimates that if the strike lasts for 10 days, it will cause economic losses of US$5 billion to the United States. It is also worth noting that for consumers, as the strike continues, the inventory of relevant brands of cars will decrease, and consumers may turn to other brands.
The National Association of Manufacturers said in a statement:
Small and medium-sized manufacturers across the country will feel the brunt of this shutdown, whether or not they have union members.
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