“If That’s the Company’s Best Offer, You Just Lost” – Auto Workers Walkout Threatens the Profits and Viability of Ford

In a significant escalation of labor strikes, the United Auto Workers (UAW) union recently announced a walkout by 8,700 workers at Ford’s Kentucky truck plant, taking the largest and most profitable Ford facility offline. 

Ford’s ‘Best Offer’ 

UAW President Shawn Fain expressed his frustration with Ford, stating, “The union has waited long enough, but Ford hasn’t gotten the message to bargain for a fair contract. If they can’t understand that after four weeks, the 8,700 workers shutting down this extremely profitable plant will help them understand it.”

Ford labeled the strike expansion as “grossly irresponsible,” and a Ford executive revealed that the union inquired about another offer during a meeting. The company had been considering incorporating electric vehicle battery plants into the UAW national contract and potentially unionizing them. 

However, the economic benefits offered to the UAW remained largely unchanged. 

Fain’s response to this offer was clear: “If that’s the company’s best offer, you just lost Kentucky Truck Plant.”

The Ongoing Labor Disputes

This move by the UAW follows four weeks of strikes against General Motors, Ford, and Jeep maker Stellantis. Initially, the union targeted one assembly plant from each of these automakers, but the influence has continued to spread.

These walkouts have disrupted the auto industry, impacting not only the manufacturers but also other parts supply companies and related businesses.

Marick Masters, a business professor at Wayne State University, believes that the increasing strikes aim to raise pressure on the automakers despite the concessions and wage raises already agreed upon. 

Reaching the Top

With the UAW asking for further benefits, Masters thinks that these companies may have “may have reached their resistance points to varying degrees.” Master’s also thinks Fain may be testing the waters before he needs to go “full throttle” and put all union members on strike.

One of the critical points of contention in the negotiations is the demand by the UAW that battery plants for electric vehicles be unionized to ensure job security and competitive wages for workers during the transition to electric vehicles.

 Last week, GM agreed to include joint-venture electric vehicle battery factories in the national master contract, increasing the likelihood of unionization.

Impact on Other Workers

The strikes have not only affected the automakers but have also resulted in the layoffs of approximately 4,800 workers at factories not directly involved in the strikes. The companies argue that the strikes have forced them to impose these layoffs, as many of these job cuts occurred at factories that produce parts for the assembly plants impacted by the strikes. 

However, the UAW disputes this, asserting that these layoffs are unjustified and are part of the companies’ efforts to pressure UAW members to accept less favorable contract terms.

Sam Fiorani, an analyst with AutoForecast Solutions, offers insight into the layoffs, stating that the automakers are losing money due to the strikes. The strikes are slowing or idling factories that are now running below their capacities because of strike-related parts shortages.

Fiorani says the companies have to mitigate further losses and, “It doesn’t make sense to keep running at 30% or 40% of capacity when it normally runs at 100%,” he said.

Paid and Not Working

Striking workers are receiving $500 a week from the union’s strike pay fund. In contrast, anyone who is laid off would qualify for state unemployment aid, which, depending on various circumstances, could be less or more than $500 a week. 

As the strikes continue and widen, it’s likely that more workers will be laid off at non-striking plants. Once metal stamping factories that supply multiple assembly plants have produced enough parts for non-striking facilities, the companies would likely shut them down.

Patrick Anderson, CEO of the Anderson Economic Group in Lansing, Michigan, also said that manufacturing parts for the automakers are also likely to have laid off workers but might not report them publicly.

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The post “If That’s the Company’s Best Offer, You Just Lost” – Auto Workers Walkout Threatens the Profits and Viability of Ford first appeared on The Net Worth Of.

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