UAW says its “strike is working,“ holds off on more walkouts

The United Auto Workers held off on additional strikes against Detroit Three auto plants on Friday, citing progress in talks, particularly with General Motors (GM.N), which eliminated a major sticking point in talks by allowing workers at joint-venture battery plants to be covered by a labor agreement, the union said.

“Our strike is working, but we’re not there yet,” UAW President Shawn Fain said in a livestreamed update on negotiations with automakers GM, Ford Motor (F.N) and Stellantis (STLAM.MI).

Until Friday, the UAW had ratcheted up action against different automakers weekly to try to get its demands met. Threatening to strike against GM’s Arlington, Texas, plant that makes cash-cow SUVs like the Cadillac Escalade spurred GM to agree that EV battery factories would become union plants with UAW contracts, Fain said.

GM’s concession could be critical if rivals follow suit. More consumers are buying electric vehicles, and the union wants those workers to get the same protections as others as EV production expands and automakers benefit from federal subsidies to transition the United States to lower carbon emissions.

“This defines the transition to EVs,” said Harley Shaiken, labor professor at the University of California, Berkeley. “Clearly, GM’s concession on the master agreement will positively be matched by Ford and Stellantis.”

The fate of the battery plants was seen as a major sticking point in the talks. On Sept. 29, Ford CEO Jim Farley said Fain was holding a deal hostage to the battery plants.

The companies up to now have resisted including the battery plants they are building under the master agreement, arguing most were joint-venture factories with other majority owners that have to sign off on such an agreement.

“GM has agreed to lay the foundation for a just transition,” Fain said in his live broadcast, adding the company had “leapfrogged” the pack in negotiations with the UAW. He did not say whether workers at GM’s battery plants would earn the same pay as union members at other plants.

Stellantis is making progress in the talks, “but there are gaps that still need to be closed,” North American Chief Operating Officer Mark Stewart said in a letter. Ford declined to comment and GM did not immediately respond.

The pressure is rising on the three automakers as EV market leader Tesla (TSLA.O) cut U.S. prices of its Model 3 sedan and Model Y SUV, intensifying its price war and further pressuring profit on all EV models that are forced to match CEO Elon Musk’s aggressiveness.

Fain said the UAW could still strike against highly profitable truck plants if progress stalls. So far, the union has avoided walking off the job at those plants.

“We know their pain points. We know their moneymakers and we know the plants they really don’t want struck,” Fain said. “And they know we’ve got more cards left to play.”

Fain has kept automakers in suspense as to whether he would order additional plants shut down, or give an automaker a pass because they had offered concessions. So far, the union has ordered walkouts at five assembly plants and 38 parts depots operated by GM and Stellantis.

Ford, GM and Stellantis have made new proposals in an effort to end the escalating cycle of walkouts.

Deutsche Bank estimated in a research note on Friday that the hit to operating earnings at GM, Ford and Stellantis from lost production has been $408 million, $250 million and $230 million, respectively.

Ford said its latest wage offer would provide raises in excess of 20% over the life of a contract. Combined with proposed cost-of-living-adjustments, workers could see close to 30% increases in pay, people familiar with the proposal said.

Fain’s Friday video addresses have become must-see events since he launched coordinated strikes at GM, Ford and Stellantis plants shortly after midnight on Sept. 15.

Fain passed over Ford on the Friday that he called for strikes against parts depots.

Last Friday, Fain called off a strike planned at a Stellantis assembly plant after the automaker delivered new proposals minutes before the scheduled start of his talk.

Friday’s monthly U.S. jobs report showed no effect from the strike, likely because it started too late in September to be captured in government surveys, but it could affect October’s report if the walkout extends to next week, when the Labor Department does its survey for the next release.

GM shares were up 2.8% late on Friday while Ford shares rose 1.5%. Stellantis shares in Milan ended 1% higher.

Related Galleries: