© Reuters. FILE PHOTO: Striking United Auto Workers members picket outside the Stellantis Jeep plant in Toledo, Ohio, U.S. September 19, 2023. REUTERS/Rebecca Cook/File Photo
By Hyunjoo Jin
(Reuters) -The United Auto Workers (UAW) and the Detroit Three automakers were still at loggerheads with Friday’s deadline looming for a threatened expansion of the union’s U.S. strikes.
The seven-day standoff is fueling worries about prolonged industrial action that could disrupt production and ripple through the supply chain and dent U.S. economic growth.
The UAW last week launched unprecedented, simultaneous strikes at one assembly plant each of General Motors (NYSE:), Ford (NYSE:) and Chrysler parent Stellantis (NYSE:).
Approximately 12,700 workers are on strike as a result of the UAW’s coordinated U.S. action out of the union’s 146,000 members who work at the Big Three.
UAW President Shawn Fain said on Monday that he would announce an expansion of the strikes at 12 p.m. EDT on Friday (1600 GMT), barring “serious progress” in talks. On Thursday morning, Fain posted video message on X, formerly known as Twitter, to UAW members about the Friday deadline, showing scenes from several Hollywood movies with the characters saying “tick tock.”
Meanwhile, a Reuters/Ipsos poll found significant support by Americans for the striking auto workers.
Stellantis on Wednesday joined GM and Ford in furloughing some employees at other factories because of the ripple effects of the strikes, including parts shortages, storage constraints and other issues.
UAW workers are expected to rally at one of Ford’s two Louisville, Kentucky, assembly plants on Thursday evening in support of workers striking at other plants.
The city is home to a Ford assembly plant and its Kentucky truck plant. Ford CEO Jim Farley has previously said the Kentucky truck plant, which assembles F-Series trucks, is the company’s most profitable plant globally.
Analysts expect plants that build high-margin pickup trucks such as Ford’s F-150, GM’s Chevy Silverado and Stellantis’ Ram to be the next targets if the walkout continues. Morgan Stanley analyst Adam Jonas estimated in a Thursday research note that a full month of lost production would cost the three automakers $7 billion to $8 billion in lost profits.
Fain has said Detroit automakers have not shared their huge profits with workers while enriching executives and investors.
GM President Mark Reuss on Wednesday rejected claims by the union that the record profits made by automakers go toward fueling “corporate greed,” saying the funds have been reinvested in electric vehicles as well as gasoline-powered cars.
In an opinion piece published in the Detroit Free Press, Reuss also called the UAW’s demands for a 40% pay hike “untenable,” signaling the two sides remain far apart over the key issue.
The three automakers have proposed 20% raises over 4-1/2 years.
UAW workers also want to end a tiered wage structure that they say has created a large gap between newer and older employees, forcing some to work two jobs to make ends meet.
S&P said the strikes were highly likely to last several weeks, potentially cutting third-quarter U.S. gross domestic product by 0.39% and causing “upheaval” across global automotive supply chains.
The ongoing walkout at midsized truck factories benefits rival Toyota Motor (NYSE:), which does not have unions at its U.S. factories and is about to launch redesigned Tacoma pickup trucks, S&P added.
Tesla (NASDAQ:) investors have said a potential hike in wages and benefits at Detroit competitors would widen the EV giant’s labor cost structure advantages.
“The clear winner in this heavyweight boxing match … is Musk and Tesla with champagne now on ice,” Wedbush analyst Daniel Ives said in a Thursday research note, referring to Tesla chief Elon Musk.
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