UAW, Detroit Three in standoff as a wider strike looms

A complete walkout by 146,000 UAW auto workers could result in a modest 0.2% drag to annualized growth of U.S. gross domestic product this quarter should the strike action last for a month, RSM estimated. Stellantis said on Wednesday it will temporarily lay off 68 employees in Ohio and expects to furlough another 300 workers in Indiana because of the strike at a Jeep assembly plant in Toledo, Ohio.

Detroit's Big Three automakers and the United Auto Workers remained far apart on Wednesday, less than 48 hours before the union's deadline to make significant progress or escalate a strike with a new round of work stoppages. Talks were ongoing between union representatives and company management in the sixth day, a day after Ford averted a walkout by Canadian workers.

The UAW launched a strike against Ford, General Motors and Chrysler parent Stellantis last week, targeting one U.S. assembly plant at each company. Those strikes have halted production at plants in Michigan, Ohio and Missouri that produce the Ford Bronco, Jeep Wrangler and Chevrolet Colorado, alongside other popular models. The UAW has said it will announce strikes against more U.S. plants on Friday if no serious progress is made in talks with automakers by noon EDT (1600 GMT) on that day.

Detroit automakers have been increasingly outspoken in rejecting the UAW demands and public statements. GM President Mark Reuss said in an opinion piece published in the Detroit Free Press on Wednesday that "the UAW's demands can be described in one word - untenable." 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.

"We're not playing. We're serious about this," said Victor Holloway, 24, of Westland, Michigan, who has worked at the Ford plant in Wayne, Michigan, since 2021. GM is expected to announce the idling this week of its Kansas car plant because of the impact of the nearby Missouri strike.

Ford reached a last-minute deal to avoid a walkout at its Canadian operations late on Tuesday. Unifor, which represents about 5,600 Canadian auto workers, had been threatening to go on strike at all three of Ford's plants in that country if a deal was not reached by late on Tuesday. Analysts expect plants that build more profitable pickup trucks such as Ford's F-150, GM's Chevy Silverado and Stellantis' Ram to be the next strike targets if the walkout continues.

The three-year Ford Canada agreement remains subject to ratification by Unifor members, Ford's Canada unit said in a statement, adding that it would not disclose details of the tentative deal. Unifor had sought improved wages and pensions, as well as support in the transition to electric vehicles and additional investment commitments by Ford. The Canadian union will now turn to getting deals with GM and Stellantis. Those deadlines were extended while the Ford talks proceeded.

A White House aide said President Joe Biden is wearing a red tie on Wednesday in solidarity with UAW workers. Ford said on Tuesday it was making contingency plans for further U.S. work stoppages, including plans to ship the parts that keep Ford vehicles on the road, especially to keep first responders and other essential services running.

Ford said it continued to negotiate with the UAW, with the focus on reaching a deal that would reward its employees and enable the company to invest and grow. The UAW and companies disagree over pay and benefits for workers. The three automakers have proposed 20% raises over the 4-1/2 year term of their proposed deals, though that is only half of what the UAW is demanding through 2027.

Many UAW workers are most concerned about the 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. A complete walkout by 146,000 UAW auto workers could result in a modest 0.2% drag to annualized growth of U.S. gross domestic product this quarter should the strike action last for a month, RSM estimated.

Stellantis said on Wednesday it will temporarily lay off 68 employees in Ohio and expects to furlough another 300 workers in Indiana because of the strike at a Jeep assembly plant in Toledo, Ohio. Stellantis anticipates similar actions at Kokomo Transmission and Kokomo Casting in Kokomo, Indiana, impacting an estimated 300 additional employees.