The UAW is officially on strike.
The current contract between the United Auto Workers Union and the "Big Three" Automakers, which includes Ford, Stellantis, and General Motors, expired at 11:59 p.m. on September 14, 2023.
Last year, it was a potential freight rail labor strike threatening commercial vehicle orders.
The Associated Press reported that original UAW demands included a "46% pay raise, a 32-hour work week with 40 hours of pay, and a restoration of traditional pensions."
UAW President Shawn Fain had stated he planned to drive a "hard bargain with the Detroit Automakers," but was quoted by the AP as "acknowledging the union will have to give up some of its demands to reach agreements." Unfortunately, that did not occur.
Strike Updates as of Sept. 22, 2023
On Friday Sept. 22, the UAW Strike expanded with members walking out of "all 38 parts-distribution centers operated by General Motors and Jeep and Ram owner Stellantis in 20 states," according to AP reports. Ford has been spared the additional walkouts due to its work to meet additional demands over the past week.
The UAW shared this list of facilities on social media:
President Joe Biden has announced his solidarity with the Union workers on the social media platform as well, stating that he will be heading to Michigan on Tuesday to join the workers.
Tuesday, I’ll go to Michigan to join the picket line and stand in solidarity with the men and women of UAW as they fight for a fair share of the value they helped create.— President Biden (@POTUS) September 22, 2023
It’s time for a win-win agreement that keeps American auto manufacturing thriving with well-paid UAW jobs.
The focus on parts facilities has a heavy potential impact particularly on commercial fleets, who are already struggling to get needed parts during ongoing parts shortages.
Strike Updates as of Sept. 15, 2023
On September 15, about 13,000 U.S. auto workers stopped making vehicles and went on strike after their leaders couldn’t bridge a giant gap between union demands in contract talks and what Detroit’s three automakers are willing to pay, according to a report from the Associated Press.
Members of the United Auto Workers union began picketing at a General Motors assembly plant in Wentzville, Missouri; a Ford factory in Wayne, Michigan, near Detroit; and a Stellantis Jeep plant in Toledo, Ohio.
Reuters reports the walkouts at the Detroit Three will halt production of the Ford Bronco, Jeep Wrangler, and Chevrolet Colorado pickup truck, along with other popular models. Fain laid out plans for the walkouts on Facebook Live, less than two hours before the expiration of the old contract.
It is the first time in the union’s 88-year history that all three companies were targeted simultaneously.
Some analysts are noting the strike is starting smaller than they predicted, but that a larger strike is imminent if negotations don't move forward in a positive direction. Reuters noted targeted walkouts could limit the cost of strike pay to the UAW, which has a $825 million strike fund.
Strike Updates as of Sept. 14, 2023
On September 11, workers from UAW Local 644 Dometic-Limerick officially went on strike in advance of the looming contract expiration.
Yesterday at 12:01 AM, workers from #UAW Local 644 Dometic-Limerick - @UAWregion9 - went on strike to demand a fair contract. The parent company made nearly 30 billion dollars in 2022. Watch ⬇️ pic.twitter.com/wHnSYlKarn— UAW (@UAW) September 12, 2023
There are less than 24 hours for a strike to be averted.
On the same day, Reuters reported the UAW was making some headway in labor talks, but that an agreement had still not been reached. Reuters also noted that pay raise hikes may have been trimmed down to 36% in total.
What Does a Strike Mean for Commercial Fleets?
Element Fleet Management recently shared their insight on what this could mean for commercial fleets.
The projected impact of a strike could include:
- Production Delays: Temporary assembly plant closures would disrupt fleet vehicle replacements, forcing fleet managers to seek alternative solutions.
- Shortages of Fleet Vehicles: Extended strikes may cause shortages of preferred fleet vehicle models, resulting in higher costs and operational inefficiencies for fleet professionals.
- Increased Acquisition Costs: High demand amid low supply could lead to elevated acquisition costs when production resumes, prompting budget reassessments.
- Rental Market Pressure: Businesses may turn to the rental market during a strike, potentially limiting availability.
- Impacts on Upfitting and Service: Delays receiving essential OEM components and spare parts may disrupt fleet maintenance schedules.
Automaker Responses to UAW Strike
Nearly 8,000 UAW-represented Ford employees received a substantial raise this Labor Day. With the average rage topping around $10,000 a year with overtime, is it enough to stave off the strike?
On average, these employees now earn $4.33 more per hour, or $9,000 a year. The pay hikes were negotiated by Ford and the UAW in 2019 to shorten the time it takes workers to reach the average top wage rate of $32 an hour.
“These pay raises are an example of Ford’s commitment to improving the lives of our hourly workforce,” said Bryce Currie, Ford vice president, Manufacturing. “The negotiating teams nicknamed this deal ‘23 Jump Street’ because in 2023 a significant number of UAW-Ford team members would see a jump in pay. And we are offering further improvements in the next contract.”
Normally, growing into the top wage rate takes eight years, but with this agreement, 8,000 employees reached the top wage rates with as little as four years on the job.
On Sept. 13 Ford released a statement from Jim Farley, president and CEO of Ford Motor Company.
"On Tuesday, Bill Ford and I sat down with the union at the main table for a major offer. As we were walking in the room, we learned President Fain would not be attending. Nevertheless, Bill and I laid out a historically generous offer to the UAW Ford bargaining team because we listened to the UAW demands and we care about our employees," Farley said.
Ford has put four offers on the table since August 29 and, according to Farley, have not received any "genuine counteroffer."
"The future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome," Farley added.
According to Reuters, Stellantis said on Sept. 8 it had offered U.S. hourly workers a 14.5% wage hike over four years.
GM said on Sept. 7 it offered workers a 10% wage hike and two additional 3% annual lump-sum payments over four years. GM purportedly make a new offer over the weekend but that information has not been fully disclosed or verified.
According to Auto Dealer Today, as the U.S. auto industry waits to see whether the United Auto Workers will strike in Detroit, Hyundai and its labor union have tentatively agreed to a deal to avert a strike across the Pacific.
The UAW Responds
On September 7, UAW President Shawn Fain released a statement in response to a proposal submitted by GM. Based on their response, this situation is still unfolding and on a deadline.
In response to GM’s proposal submitted on September 7th, UAW President Shawn Fain released the following statement:— UAW (@UAW) September 7, 2023
"After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an…
What Can Commercial Fleets Do?
While some of these actions may be difficult to accomplish now, fleet managers should always do whatever they can to prepare for the unexpected. To be in a better place should possible disruptions occur, fleet managers should consider these proactive measures:
- Diversify Suppliers: Identify alternate OEM vehicles to reduce reliance on a single manufacturer.
- Plan Ahead: Obtain advanced approval for alternate vehicles and pricing agreements before a potential strike.
- Inventory Management: Maintain an adequate inventory of essential vehicles to mitigate supply constraints.
Are you concerned about the potential strike? Have more advice to share with fleet managers navigating these uncertain times? Comment below and share your thoughts and stay tuned as we continue to cover the updates and negotiations.
Editor's Note: Originally published September 5, updated with additional information and insights.