UAW may opt to strike targeted auto plants if no deal reached – sources

By David Shepardson

WASHINGTON (Reuters) -The United Auto Workers union may opt to strike targeted auto plants if they fail to reach new contracts with the Detroit Three automakers before a Thursday night deadline, sources told Reuters on Tuesday.

UAW President Shawn Fain has vowed to call strikes at General Motors (NYSE:), Ford Motor (NYSE:) and Chrysler-parent Stellantis (NYSE:) if no deal is reached when the current four-year labor deals covering 146,000 U.S. workers expire on Thursday at 11:59 p.m. ET (0359 GMT Friday).

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

One UAW local described the plan on Facebook (NASDAQ:) as a “stand up strike.” Fain, who briefed local unions on the talks on Tuesday, is set to announce the union’s strike plan on Wednesday evening. The Detroit Free Press reported the plan earlier.

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.

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.

Automakers are facing pressure from some lawmakers to offer more generous contracts. Former House Speaker Nancy Pelosi, citing 2007 government bailouts of General Motors and Chrysler, which is now part of Stellantis, said automakers now “have the means and the opportunity to invest in their workers.”

Pelosi backed the UAW’s call for “a hard-earned pay raise, especially respecting new workers, as well as better working conditions and the job security that they deserve.”

Ford CEO Jim Farley told reporters late Tuesday “we’re very optimistic that we can reach an agreement with the UAW in the next two days. It’s time for us to come together.”

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.

Senator Bernie Sanders said in an opinion piece Tuesday that if the Detroit automakers “do not provide reasonable contracts to address longstanding inequities in the industry, there will be a strike – and all of us should support the strikers.”

Stellantis made another counteroffer after Tuesday after exchanging offers with the UAW in recent days, company and union sources said.

LAST DAYS BEFORE DEADLINE

The UAW on Friday had rejected revised offers from Stellantis, GM and Ford. GM made a new offer to the UAW over the weekend, but the details were not immediately available.

“We’ve made a lot of progress over the last few days,” GM President Mark Reuss said at an Automotive News conference in Detroit. “The give and take is really happening.”

GM CEO Mary Barra decided not to attend Business Roundtable meetings in Washington on Wednesday and Thursday because of the labor talks, the company said on Tuesday. Barra is chair of the association of more than 200 CEOs of major U.S. companies.

The UAW initially sought a 20% wage hike upon ratification and four annual 5% hikes, but has trimmed those hikes to around 36% in total, three sources told Reuters.

Stellantis said Friday it offered U.S. hourly workers a 14.5% wage hike over four years, while GM had offered workers a 10% wage hike and two additional 3% annual lump-sum payments over four years. Stellantis last week did not offer additional lump-sum payments.

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.

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 use of temporary workers.