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Labor Strikes Hit Major U.S. Automakers as Contract Deadlines Pass

Employees at three of the United States’ largest car manufacturers have initiated strike actions, according to their union. Work has come to a halt at plants owned by General Motors (GM), Ford, and Stellantis as labor contracts expired on Thursday night. The United Autoworkers Union (UAW) claims that the companies failed to present acceptable offers, raising concerns of potential repercussions for buyers and the automotive industry.

Shawn Fain, President of the UAW, conveyed that it is now the responsibility of the companies to resolve the dispute. He emphasized, “When they start taking care of their workers, it will end.”

The strikes commenced at midnight Eastern Time (04:00 GMT) at GM’s Wentzville, Missouri mid-size truck plant, Ford’s Bronco plant in Michigan, and the Jeep plant in Toledo, Ohio, which is owned by Stellantis. These plants are pivotal to the production of some of the most profitable vehicles for the “Detroit Three.”

While other facilities are expected to continue operations, the UAW has not ruled out the possibility of expanding strikes beyond the initial three targets.

As the Thursday deadline approached, the White House confirmed that President Joe Biden had engaged in discussions with Mr. Fain regarding the negotiations but did not provide further details.

Among the union’s demands were a 40% pay increase for approximately 140,000 members over four years, aligning with comparable pay raises for company executives. Additional demands included a four-day workweek, reinstating automatic pay increases linked to inflation, and tighter restrictions on classifying workers as “temporary” without union benefits.

Ford argued that the UAW’s proposals would more than double its labor costs in the United States.

Last month, an overwhelming 97% of the union’s members authorized a strike, asserting that the companies could afford to be more generous following years of record profits.

Jim Farley, CEO of Ford, expressed hope in avoiding a strike but emphasized the company’s commitment to safeguarding its sustainability.

A prolonged strike could cost the three firms nearly $1 billion (£800 million) and workers nearly $900 million in lost wages, as estimated by the Anderson Economic Group. The total economic impact could surpass $5 billion.

Analysts noted that given the existing strain on car supplies due to pandemic-related parts shortages, an extended strike could lead to higher prices for consumers.

Ford, GM, and Stellantis collectively represent approximately 40% of U.S. car sales, although their share has declined over the past quarter-century due to increased competition from foreign companies such as Toyota.

The last auto industry strike occurred in 2019 when GM workers walked off the job for six weeks.

Despite the financial challenges posed by the strike, many UAW participants remain committed to the cause, advocating for a fair share of their companies’ profits in the face of rising living expenses and income disparities.

As one GM worker, Jessie Kelly, put it, “At the end of the day, we all want to work for a corporation that is making good money. We just want our fair share of that.”