Autoworkers strike expands again against GM and Ford

The Ford logo is seen on top of the Ford's Chicago Assembly Plant in Chicago, Illinois, on September 29, 2023.

Ford’s shift toward electric vehicles is not going to cost jobs, chief executive Jim Farley said in a livestreamed negotiations update Friday. Ford’s upcoming EV battery factories had been a source of particular friction with workers, Farley said. Also, there have been broad concerns that electric vehicles, which have fewer parts to assemble than gasoline-engined vehicles, will require fewer workers.

But Farley insisted there will be more jobs, not fewer, at Ford in the future.

“None of our workers today are going to lose their jobs due to our battery plants during this contract period and even beyond the contract,” he said. “In fact, for the foreseeable future we will have to hire more workers as some workers retire, in order to keep up with demand.”

Farley indicated, during the presentation, that Ford would produce affordable EVs. Ford will also continue producing gasoline-powered vehicles for the foreseeable future, Farley said, because there will be customers who need them.

In the past, Farley had indicated that electric vehicles would take 40% less labor to assemble, but he said those jobs could be made up for by bringing more jobs, such as component manufacturing, back into company.

United Auto Workers president Shawn Fain responded sharply to Ford executives’ statements indicating serious progress in negotiations, especially on wages and benefits.

“We are making significant progress on the pay and benefit side,” Bryce Currie, vice president of manufacturing in the Americas and of labor affairs at Ford said during the presentation. “I’m not going to share some of the specifics, but we’re close.”

But Fain insisted that was overly optimistic, and that Ford CEO Jim Farley had already forewarned of cuts in the long-term.

“We are far apart on core economic proposals like retirement security and post-retirement healthcare, as well as job security in this EV transition, which Farley himself says is going to cut 40 percent of our members’ jobs,” Fain said.

In the past, Farley has has said that electric vehicles will use 40% less labor to assemble, according to Reuters, but he added that Ford would bring in other types of work, such as components manufacturing, to make up for those lost jobs.

During Friday’s Ford presentation, Farley quipped that Fain was on television “more than Jake at State Farm,” while Ford was working hard to reach an a deal.

Fain claimed it was Ford that was not being conscientious. Ford has, so far, not responded to a “comprehensive proposal” that was presented Monday, Fain said.

“Like a good neighbor, we’re available 24/7,” Fain said, using a phrase from the State Farm theme song, which was written by Barry Manilow in 1971. “Name the time and the place you want to settle a fair contract for our members, and we’ll be there.”

Ford President and CEO Jim Farley (second from left) and other Ford executives answering questions from reporters during a virtual meeting today.

While the United Auto Workers union expanded its strike at Ford Friday, executives at Ford said the two sides are getting relatively close to a deal on wages and benefits that would be affordable for the company and good for the 57,000 UAW members there.

“We are making significant progress on the pay and benefit side,” said Bryce Currie, vice president of manufacturing in the Americas and of labor affairs at Ford. “I’m not going to share some of the specifics, but we’re close.”

CEO Jim Farley and Currie both said they believe the sticking point on a deal is the union’s demand about the pay at a plant under that will build EV batteries. Both said those battery plants will need to be competitive with lower-wage battery plants being built by competitors.

Ford had previously said that meeting the union’s demands, including 40 percentage points in wage increases over the life of the contract and a four-day, 32-hour work week without a drop in pay from the current 40-hour week, would cause massive losses and bankruptcy. But they said that is no longer the case give the progress at the bargaining table.

“The deal that we’re close to is actually a deal that’s affordable to us, that allows us to continue investing where we need to invest,” said Kumar Galhotra, president of Ford Blue, the unit of Ford that makes traditional gas-powered vehicles for consumers. “And it’s a very good deal for the workers.”

But UAW President Shawn Fain attacked Farley and other Ford executives for characterizing the two sides as close on financial issues in the deal.

“We gave Ford a comprehensive proposal on Monday and still haven’t heard back,” said Fain. “We are far apart on core economic proposals like retirement security and post-retirement healthcare, as well as job security in this EV transition,”

The split on “retirement security” isn’t disputed by Ford, as its executives say they are not agreeing to a union demand to resume traditional pension plans for those hired since 2007.

Ford CFO John Lawler called those defined benefit plans that pay a guaranteed monthly benefit until a retiree dies, “a plan of the past.”

Ford Motor Company's electric F-150 Lightning on the production line at their Rouge Electric Vehicle Center in Dearborn, Michigan on September 8, 2022.

Gasoline-powered vehicles will remain part Ford’s vehicle portfolio for the foreseeable future, Ford CEO Jim Farley said during a media presentation Friday. The company still plans to introduce new electric vehicles but, for the time being, there will be customers for whom fully electric vehicles just aren’t viable. And Ford plans to still offer products for those customers.

This is in contrast to rival General Motors, which has said it will produce only electric light duty trucks and passenger vehicles after 2035. Ford has set no such deadline, globally. (Ford has said it will go all-electric in Europe by 2030.)

Farley gave the example of someone pulling a large trailer through mountainous terrain, the sort of thing people use Ford’s Super Duty pickups for. Currently, Ford offers an all-electric version of the F-150, a light duty pickup, but has not yet revealed an electric version of the bigger, more powerful Super Duty models. Electric vehicles lose substantial driving range when towing heavy loads.

Ford executives said in the past that gasoline-powered cars remain important to some customers for both practical and emotional reasons. For instance, while Ford has an electric SUV called the Mustang Mach-E, the traditional Ford Mustang coupe remains available only with gasoline engines even after a new redesign.

Ford reports earnings separately for its gasoline and hybrid vehicles division, Ford Blue, and for its EV division Ford Model E. Ford has been losing money, so far, in its electric vehicle division, but the Ford Blue division is highly profitable.

United Auto Workers picket outside the Chicago Ford Assembly Plant as Ford vehicles are transported today in Chicago.

The UAW strike has made a substantial dent in Ford’s bottom line, according Ford Blue President Kumar Galhotra, as workers at two key money-making plants have walked off the job. Ford Blue is the Ford unit that makes cars with traditional internal combustion engines.

The first plant the UAW struck produces the Ford Bronco, which Galhotra said tends to sell very well. The second assembly plant produces the Ford Explorer, another “important vehicle.” That plant went on strike at noon ET today.

While he didn’t go into the specifics, Galhotra did acknowledge that the automaker is losing “tens of millions of dollars” every week.

“If this continues week after week, of course it will have a substantial impact on our business,” he added. “But we’re ready for it… we want to get a deal and we want to get a fair deal for our employees.”

While the UAW says it wants pensions restored, Ford CFO John Lawler said that for Ford’s unionized workers, it’s not going to happen.

“So when you look at the defined benefit plan they’re asking for, you know, that’s a plan of the past. Only 12% or so of Fortune 500 companies offer that today. What we’re offering is a defined contribution plan where we contribute,” Lawler said on a livestreamed negotiations update.

Defined benefit plans are more popularly known as pensions; defined contribution plans, in contrast, include things like 401(k)s.

Ford CEO Jim Farley announced on February 13, 2023 in Romulus, Michigan, that Ford Motor Company would be partnering with the world's largest battery company, a China-based company called Contemporary Amperex Technology, to create an electric-vehicle battery plant in Marshall, Michigan.

Ford announced earlier this week that it was pausing work on a Michigan battery plant in which the automaker plans to invest $3.5 billion. Work will eventually resume work on that plant, Ford CEO Jim Farley said today, and it will make batteries for electric vehicles.

Ford needs to decide, though, how big that plant will ultimately be, something that depends on several factors. One of those factors is the outcome of these UAW labor negotiations, which will partly determine what sorts of vehicles Ford will produce that will use the batteries the factory makes.

Another factory is the final wording of Inflation Reduction Act rules that determine the amount of tax credits consumers will get when purchasing electric vehicles. In general, those rules favor vehicles with batteries manufactured in the US, but there are still techincal points to be worked out.

The Marshall, Michigan, battery plant has been the subject of political debate, also, because it will use technology from a Chinese company, CATL. Farley said that was not a factor in the decision to pause work on the plant, though.

“For Marshall, we’re not doing political math,” Farley said.

Ford also has three other EV battery plants under construction. Two are in Kentucky and one nearby in Tennessee. Those are owned by a joint venture company operated by Ford and South Korea’s SK Innovation and so are not part of these UAW negotiations, since they are operated by a separate company.

Ford CEO Jim Farley pleaded with the UAW to agree to terms in a livestream presentation Friday afternoon, noting his company’s interdependence on its union members, while raising the specter of a loss of manufacturing jobs entirely.

“As this strike shows, we can’t build vehicles in the US without the UAW, and whether [UAW President] Shawn Fain believes it or not, the UAW needs a healthy Ford, General Motors, and Stellantis, to have a future,” he said.

He cited instances of countries losing their domestic auto industry entirely and said he was trying to avoid a similar situation in the United States.

UAW union members picket on the street in front of a Stellantis distribution center, Monday, Sept. 25 in Carrollton, Texas.

With the UAW demanding wage increases of more than 30% – and similar wage gains for unionized workers being won around America – you’d think that would continue to boost the specter of inflation.

Some union critics have claimed that big pay raises would contribute even more to inflation, because companies would have to raise prices to make up for higher salaries.

Not so fast, Goldman Sachs economists say.

Instead, pay may be merely catching up to inflation, as unions renegotiate their contracts for the first time during the past couple years’ inflation spiral.

Goldman Sachs, in a Thursday report, called union wage gains a “final echo of last year’s inflation surge.”

“It is tempting to think that union workers are central to any wage-price feedback loop because they have more bargaining power. But we have shown that was not the case,” the report said.

Goldman noted in similar inflation spirals during the 1960s and 70s, union gains also didn’t contribute significantly to inflation. The economists also noted that the vast majority of Americans are not unionized, which will also temper the effect on overall inflation.

In his dogged 12-minute statement on Facebook Live, UAW President Shawn Fain called on Americans to join the autoworkers’ strike.

“To the public, we invite you stand with us on the picket line if you support our cause,” said Fain. “We know America has our back.”

He noted that President Joe Biden joined the striking autoworkers on Tuesday in a “historic day.”

“The most powerful man in the world showed up for one reason only: because our solidarity is the most powerful force in the world,” Fain said.

The United Auto Workers union’s decision to go on strike against one assembly plant each at General Motors and Ford steps up the pressure on the companies. But it’s not the ultimate step that it could have taken against either company.

So far it is not affecting the supply of the best-selling vehicles of both companies the Chevrolet Silverado and Ford’s F-Series pickup trucks, the best-selling vehicle in the nation by any company,

The Silverado is built at plants in Flint, Michigan, and Fort Wayne, Indiana, while the F-150 is built in plants in Claycomo, Missouri, outside of Kansas City, as well as Dearborn, Michigan. The larger F-Series pickup models are built in Louisville and Avon Lake, Ohio, while the electric version of the truck, the F-150 Lightning, is being built at the Rouge Electric Vehicle Center, also in Dearborn.

While Ford is likely still losing money on the Lightning – it is reporting losses on its EV unit so far – the F-Series pickups are the major profit driver at the company, as is the Silverado for GM.

And if the UAW wanted to actually shutdown virtually all North American vehicle production at the companies, it could do so by striking engine or transmission plants that supply the assembly lines with what they need to build vehicles, rather than individual assembly lines. according to Jeff Schuster, global head of automotive for GlobalData, an industry consultant.

“Two plants per company, you can pretty much idle North America,” he said.

UAW workers picket outside of Ford's Wayne Assembly Plant on September 26 in Wayne, Michigan. 

As of noon ET today, there will be more than 25,000 UAW workers on strike, as UAW President Shawn Fain has called on an additional 7,000 members across Ford and GM to go on strike.

Here are the two plants Fain said UAW will add to its strike:

Ford’s Chicago Assembly

4,600 members

Products: Ford Explorer, Lincoln Aviator

GM’s Lansing Delta Assembly

2,300 members

Products: Chevy Traverse, Buick Enclave

Used Mack trucks available at a lot in Evans City, PA, on Jan. 9, 2020.

The United Auto Workers union is poised to go on strike at Mack Trucks when the union’s contract expires at 11:59 pm ET Sunday.

The union, which is already waging its first simultaneous strike in its history against General Motors, Ford and Stellantis, has 3,500 members working at five Mack Trucks facilities in Pennsylvania, Maryland and Florida. Mack Trucks, owned by Volvo Group (which is separate from the Volvo car brand, which is owned by China-based Geely Auto Group), makes heavy-duty trucks, not passenger vehicles.

The union cites many of the same issues in talks with Mack as it does in negotiations with GM, Ford and Stellantis — wages, health care, pension, as well as the end to a lower tier of wages and benefits that some workers with less seniority receive.

The union last went on strike against Mack Trucks in 2019, shortly after its strike at GM that year.

United Auto Workers (UAW) members strike outside the General Motors Lansing Redistribution facility on September 23 in Lansing, Michigan. 

Talks between the UAW union and Detroit’s Big Three automakers have been very active n the last couple days, ahead of UAW President Shawn Fain’s possible strike expansion announcement Friday at 10am, according to a source familiar with negotiations.

General Motors met at the main negotiating table Wednesday with UAW leadership, according to a person familiar with the meeting. This was the only in person main table meeting this week between GM and the UAW, but negotiations behind the scenes remain ongoing. This source characterized the main table meeting yesterday as neither good nor bad. 

The UAW has ordered workers to go on strike at Ford’s Chicago Assembly and GM’s Lansing Delta Township assembly plant, which make the Ford Explorer, Lincoln Aviator, Chevrolet Traverse and Buick Enclave.

The four family SUVs represent the bread-and-butter of the two companies’ lineups. While they aren’t the high-profit, high-volume sellers that the Ford F-150 and Chevy Silverado pickups represent, the production halt will surely not help Ford and GM’s bottom line.

The United Auto Workers union is expanding its strike to additional facilities of automakers Ford and GM. The UAW did not call for additional Stellantis members to go on strike.

UAW President Shawn Fain said that Ford and GM have not made enough progress in meeting union demands, despite a strike that has gone on for 15 days. He called for the strike expansion to turn up the pressure at the bargaining table.

Shawn Fain angrily addressed incidents of violence against union members on picket lines.

“We’ve had guns pulled on us, trucks and cars rammed through us and violent threats hurled at us,” UAW President Shawn Fain said in a press conference. “I want to be absolutely clear, we will not be intimidated into backing down by the companies or their scabs.”

Fain said the UAW’s “cause is just,” and union members won’t be deterred.

“Shame on anyone that would engage in this violence against our members.”

Shawn Fain speaking on Facebook Live today.

UAW President Shawn Fain arrived 30 minutes late to an expected announcement, saying the delay was because the union received “a flurry of interest” from automakers in negotiations.

Fain did not yet specify what he meant or whether any deals were close to being reached.

Labor supporters and members of the United Auto Workers union (UAW) Local 230 march along a picket line during a strike outside of the Stellantis Chrysler Los Angeles Parts Distribution Center in Ontario, California, on September 26.

As important as wages and benefits are in the unprecedented United Auto Workers strike against General Motors, Ford and Stellantis, nothing is more important than job security.

And so it is significant that UAW President Shawn Fain said the union has made major progress recently in negotiations on the issue with Ford.

When Fain announced an expansion of the strike against GM and Stellantis, he specifically exempted Ford because of that progress.

Job security is an especially big issue in these negotiations because of the potential for future job losses that could accompany the transition from traditional gasoline-powered vehicles to electric vehicles. EVs could need up to 30% less labor to assemble than gas-powered vehicles due to fewer moving parts.

“It could be that the automakers don’t have plans to close anything during this contract,” said Jeff Schuster, executive vice president of GlobalData. “But the problem is that once (these provisions are) in there, it’ll be tough to remove. “

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