(NewsNation) — The United Auto Workers union and the Detroit “Big Three” automakers remain far apart in talks over new contracts and the union is set to strike at three factories.
UAW President Shawn Fain said in an online address Thursday night that the union will use a new “stand up” strategy, in which strikes will occur at a few plants at a time if no tentative agreement is reached by a midnight deadline. It appeared unlikely the two sides would reach a deal.
UAW members are poised to hit the picket line in what is the first simultaneous strike against Ford, General Motors and Stellantis in the union’s 80-year history.
The first factories to be targeted are a General Motors assembly plant in Wentzville, Missouri, a Ford factory in Wayne, Michigan, and a Stellantis Jeep plant in Toledo, Ohio.
“This strategy will keep the companies guessing. It will give our national negotiators maximum leverage and flexibility in bargaining,” Fain said. “If we need to go all out, we will. Everything is still on the table.”
If the strike begins, union officials will not bargain Friday, choosing instead join workers on picket lines, Fain said. A rally is already planned for 4 p.m. Friday in downtown Detroit, Fain announced in the Facebook livestream.
In a statement after Fain’s announcement, Ford said it has offered a “historically generous” contract with large wage increases the union has rejected. The company said the UAW’s demands would more than double its labor costs.
“Ford has bargained in good faith in an effort to avoid a strike, which could have wide-ranging consequences for our business and the economy. It also impacts the very 57,000 UAW-Ford workers we are trying to reward with this contract,” the company said. “Our hourly employees would take home nearly 60% less on average with UAW strike pay than they would from working. And without vehicles in production, the profit-sharing checks that UAW workers could expect to receive early next year will also be decimated by a significant strike.”
Ford said it remains committed to reaching an agreement that that “rewards our employees” while also protecting its “ability to invest in the future as we move through industry-wide transformation.”
Negotiations over a new deal began in July.
The UAW is now demanding 36% pay raises. They started out demanding 40% raises over the life of a four-year contract, or 46% when compounded annually. Initial offers from the companies fell far short of those figures.
In addition to wage increases, the union is seeking the restoration of cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, pension increases for retirees and other items.
Fain said the automakers have raised initial wager offers, but have rejected some of the union’s other demands.
“We do not yet have offers on the table that reflect the sacrifices and contributions our members have made to these companies,” he said.
Ford offered 20% over 4½ years, while GM was at 18% for four years and Stellantis was at 17.5%. The raises barely make up for what he described as minimal raises of the past. In a 2019 agreement, the union got 6% pay raises over four years with lump sums in some years as well as a profit-sharing check.
Top pay for an assembly plant worker is now $32 per hour, The Associated Press reports.
All three companies’ offers on cost-of-living adjustments were deficient, Fain said, providing little or no protection against inflation.
The companies rejected pay raises for retirees who haven’t received one in over a decade, Fain said, and they are seeking concessions in annual profit-sharing checks, which often are more than $10,000.
Negotiations come as the economy is already under strain from elevated inflation.
Automakers contend that they need to make huge investments to develop and build electric vehicles while still building and engineering internal combustion vehicles. They say an expensive labor agreement could saddle them with costs that would force them to raise prices above their non-union foreign competitors. And they say they have made fair proposals to the union.
A UAW strike that shuts the Detroit Big Three manufacturers for 10 days could cost carmakers, suppliers and workers more than $5 billion, Michigan-based Anderson Economic Group estimated and could disrupt the broader auto supplier network.
The Associated Press contributed to this report.