- Members of the United Auto Workers could strike on Friday, September 15 at midnight.
- The latest news out of the union suggests all members might not strike at once.
If members of the United Auto Workers union strike on Friday, as is looking likely, the impact on Ford, General Motors, and Jeep-maker Stellantis will be monumental — even if not every automaker or factory is targeted.
The auto workers' union and the Detroit 3 carmakers have been negotiating for months now, hoping to reach an agreement on new contracts before the hard deadline of Thursday, September 14 at 11:59 p.m.
The union is asking for increased wages, cost of living adjustments, the return of pensions, cutting its tiered work system (where pay is based on seniority), and more. But even after much back-and-forth with Ford, GM, and Stellantis, it appears the two sides may not reach an agreement by Thursday night, triggering a strike.
The UAW can strike in a few ways, but typically, members have gone on strike against just one of the three Detroit automakers rather than all three at once. An agreement reached at what is known as the "lead company" is then used as a pattern for agreements at the other two companies.
The union has targeted specific auto plants in the past, though it has been about 30 years since they used this approach.
This time around, the UAW has suggested a portion of its nearly 150,000 members are planning the targeted approach again — but at all three companies instead of just one.
"We will not strike all of our facilities at once," UAW President Shawn Fain said during a live-streamed speech on Wednesday. "We will strike all three companies, a historic first, initially at a limited number of targeted locations that we will be announcing."
Big ticket plants on the chopping block
That strategy could certainly hit the automakers where it hurts.
"At the beginning, a select few are going to strike and then as needed more are going to join in," Fain said. "We're going to hit where we need to hit and when we need to hit, we're going to hit to move mountains."
From the union's perspective, targeting the Detroit 3's factories where they churn out the most profitable products, especially SUVs and pickup trucks, is the most logical. While a lot of truck production has moved to Mexico in the last several years, all three Detroit companies have some form of pickup truck production based in the US.
Ford, GM, and Stellantis have capitalized off ultra-high margin vehicles in recent years. All three Detroit car makers have whittled down their lineups to abandon cheaper sedans and starter cars in lieu of luxury SUVs and pickups.
These moves have allowed Ford, GM, and Stellantis to cut costs on manufacturing (sometimes through plant closures) and vehicle development while funneling more cash toward new technologies like electric vehicles. With fewer factories and smaller — albeit more profitable — lineups, even a targeted strike at any of the Detroit three could have a disastrous effect.
Even as inventories build up and smaller cars start to come back, automakers are still being sneaky — holding supply and deals close to their chest. Automakers have even been willing to sacrifice market share for the profits they get from these costly cars.
If the UAW cuts off the Detroit auto companies' precious money-making factories, that could have a broader impact.
Impact across the board
Not only would a work stoppage impact the Detroit 3, the effects would reverberate throughout the industry.
Especially in the last decade as the automotive industry has globalized its supply chain, the manufacturing process at any single factory is just one part in a complex web. Even a single plant going down can create a domino effect across the industry, as seen several times throughout the pandemic when minor closures due to Covid outbreaks would leave lasting impacts on sales and inventory.
If the UAW strike takes down Detroit 3 production, that will impact the hundreds of suppliers that provide parts to these companies. Suppliers struggled after the last UAW strike, during which workers halted production at GM for 40 days.
This could be much more substantial — and if the Detroit 3 suppliers are in trouble, any other automaker that relies on those parts companies to keep their assembly plants running will see an impact, too. That's where the threat to the whole industry comes in.