The United Auto Workers union launched an unprecedented strike against General Motors, Ford and Stellantis after negotiators failed to reach a last-minute deal on a new contract.
Why it matters: The Detroit Three automakers collectively have about 150,000 UAW-represented employees at dozens of factories in the U.S., making popular vehicles like the Ford F-150, Chevrolet Silverado and Jeep Wrangler.
Driving the news: UAW President Shawn Fain said the union would begin a strike at three factories after national contracts expired at 11:59pm Thursday, rather than striking all U.S. operations of the companies:
The big picture: There has never been a strike against all three automakers at once.
The other side: Ford said in a statement Thursday night that the UAW didn’t offer a “substantive counterproposal” until 8pm Thursday and the company had delivered a “historically generous” offer that included wage hikes, COLA, more paid-time off and higher retirement contributions.
Context: The automakers want a deal that ensure they can compete with non-unionized automaker like Tesla, which already has a cost advantage over the Detroit Three.
Of note: President Biden spoke to both sides on Thursday to discuss the status of the negotiations. It’s unclear whether he advocated for any particular outcome.
The impact: A strike at select plant could quickly become “a logistical nightmare for the Detroit Three as it relates to the supply chain because automakers will have to adjust deliveries of specific parts to their assembly plants,” CFRA Research analyst Garrett Nelson said Thursday on a written analysis.
Zoom in: Among the automakers’ biggest concerns is that they’ll fall behind on electric vehicles if a prolonged strike sets them back or leads to unaffordable contracts.
Yes, but: But the UAW says the the Detroit Three can afford the compensation increases it’s asking for after years of massive profits stemming from record-high vehicle prices and strong sales.
The bottom line: It’s hard to see how this gets resolved quickly.
Go deeper: These vehicles are most affected by the UAW strike