November 30, 2023

Brighton Journal

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UAW deal with Ford could put pressure on GM and Stellantis

UAW deal with Ford could put pressure on GM and Stellantis

Detroit automakers and the United Auto Workers union continued to negotiate Saturday, a day after the union expanded strikes in a way that could limit supplies of parts for cars made by General Motors and Stellantis, which owns Jeep and Ram, company representatives said. .

UAW members walked off the job at General Motors and Stellantis parts distribution centers on Friday but made an exception for Ford, saying the company had done more to meet its demands.

“Our pressure on Ford is starting to pay off,” the UAW told members on Saturday.

Analysts said that although there was no indication that a deal with Ford was imminent, the agreement with the company could put pressure on the other two companies to offer similar terms and lead to a quick end to the strike.

“The moment you get a deal with Ford that includes much or all of what the UAW is looking for, that puts a lot of pressure on GM and Stellantis,” said Michael Duff, a professor at St. Louis University School of Law. Former attorney for the National Labor Relations Board. “They put them in a position of having to argue about why they’re different, why they can’t offer anything more.”

A short strike would be good news for the economy. About 200,000 people work in the auto industry, according to the Automotive Innovation Alliance, an industry group. This number does not include jobs that depend indirectly on the automobile industry, which is several times higher.

The loss of wages would hurt consumer spending, while inflation could rise if some vehicles became difficult to obtain, or parts were in short supply at repair shops and dealerships. If so, the Fed will have to continue its efforts to slow the economy by keeping policy interest rates high. More than 18,000 UAW members are now on strike.

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Car companies also face pressure from public opinion. Auto workers’ argument that their wages have not kept up with inflation, while automakers have reported good profits, resonates with the public, said Ivana Delevska, founder of investment firm Spear Invest.

“Inflation is high across the board. They need to pay for their living costs,” Ms. Delevska said of the workers.

Mr Duff said polls show workers have public opinion on their side, but that could change if a long strike makes it harder for people to get their cars repaired or is seen as hurting the economy. “As the strike continues, you can get disappointed with the workers,” he said.

Stellantis workers went on strike at 20 of the company’s parts distribution centers on Friday, while GM workers went on strike at 18 centers.

The deal Ford reached last week with the union representing its Canadian workers could provide clues to the outcome in the United States. The agreement with Unifor provides for wage increases of up to 25 percent over the three years of the contract, in addition to bonuses, enhanced retirement benefits and measures to protect employees as Ford retools its electric vehicle factories.

Unifor, which may have less influence than the UAW due to Ford’s much smaller presence in Canada, achieved these gains without having to withdraw. The union is negotiating separately with GM and Stellantis in Canada.

Ms. Delevska said investors expect America’s automakers and unions to agree on a wage increase of less than 30 percent, and added that both sides have an incentive to reach a quick settlement. “It is in no one’s interest for this to drag on any longer,” she said.

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The UAW’s demands include a 40 percent wage increase over four years, improved retiree benefits and shorter work hours. The union also wants to put an end to the tiered pay system that starts new hires at wages well below the UAW’s top wage of $32 an hour.

Ford agreed to some of the UAW’s demands, according to the union, for example promising to adjust workers’ wages in line with inflation and increase profit-sharing bonuses.

Ford also agreed to give workers the right to strike over plant closures, an important concession. The union is concerned that automakers will close some factories as the industry shifts to electric cars, which require fewer parts and labor.

“These are historic gains, but we still have further to go,” the UAW said Saturday in a letter to members.