Contents
The United Auto Workers (UAW) has decided to hold off on additional strikes against Detroit Three auto plants, acknowledging General Motors (GM)’s surprising willingness to include workers at joint-venture battery plants under union contracts.
GM’s Concession and Its Industry Impact
GM’s decision could prove pivotal, potentially influencing Ford Motor (NYSE:F) and Chrysler parent company Stellantis (NYSE:STLA) to follow suit. This move has the potential to pave the way for final agreements, strengthening the UAW’s position in the electric vehicle manufacturing industry.
UAW President Shawn Fain stated in a livestreamed update on negotiations with the automakers, “Our strike is working, but we’re not there yet.”
Automakers have significantly increased their initial wage hike offers, agreed to wage adjustments in line with inflation, and improved pay for temporary workers. However, the UAW still seeks higher wages, the elimination of a two-tier wage system, and the expansion of unions to include battery shops in all three companies.
Equal Pay and Job Protections Sought
Prior to this decision, the UAW had escalated its actions against various automakers weekly in an effort to have its demands met. The threat of a strike against GM’s Arlington, Texas, plant, which manufactures lucrative SUVs like the Cadillac Escalade, prompted GM to agree to make EV battery factories union plants with UAW contracts, according to Fain.
With the growing sales of electric vehicles, partly due to federal subsidies aimed at reducing carbon emissions in the U.S., the UAW is striving for equal pay and job protections for these workers, aligning them with other union members.
Sam Fiorani, Vice President of Global Vehicle Forecasting at AutoForecast Solutions, commented, “This is absolutely a significant step for all vehicle manufacturers to reach a contract agreement. This was the last major hurdle.”
However, it remains undisclosed whether workers at GM’s battery plants will receive the same pay as union members at other facilities.
GM is currently constructing three Ultium joint-venture battery plants with South Korea’s LG Energy Solution, along with a fourth U.S. battery plant in Indiana with Samsung (KS:005930) SDI.
Harley Shaiken, a labor professor at the University of California, Berkeley, emphasized, “This defines the transition to EVs. Clearly, GM’s concession on the master agreement will positively be matched by Ford and Stellantis.”
Read More: European Companies Confront IPO Risks as Renk Cancels Float
Stellantis Progress and Ford’s Silence
While the fate of battery plant workers had been a major point of contention, Ford CEO Jim Farley had previously stated that Fain was holding the deal “hostage” due to this aspect of the negotiations.
In a separate development, Ford announced layoffs of an additional 495 workers in Ohio and Michigan due to the strike’s impact on two assembly plants.
Until now, the companies had resisted including the battery plants they were constructing in the master agreement, arguing that most of them were joint-venture factories with other majority owners requiring approval for such agreements.
Fain asserted in his live broadcast, “GM has agreed to lay the foundation for a just transition,” while GM declined to confirm the news, stating only that negotiations continue.
As discussions progress, Stellantis’ North American Chief Operating Officer, Mark Stewart, indicated that although progress has been made, there are still gaps to be closed, with Ford declining to comment.
Market Response to the Developments
Pressure continues to mount on the three automakers as EV market leader Tesla (NASDAQ:TSLA) lowers U.S. prices for its Model 3 sedan and Model Y SUV, intensifying the price war and putting further pressure on profits for all EV models.
Fain also mentioned on Friday that the UAW could still strike against highly profitable pickup truck plants if progress stalls, although such action has been avoided thus far.
Fain’s Friday video addresses have become must-see events since he initiated coordinated strikes at GM, Ford, and Stellantis plants shortly after midnight on Sept. 15.
On Friday, GM shares rose nearly 2%, while Ford shares gained 0.8%, and Stellantis shares in Milan ended up 1%
Do you need help in finding the best forex broker for your needs?
Click here: The Best Forex Broker Finder
