The negotiations continued Monday, the fourth day of this very first walkout in the history of the powerful United Auto Workers (UAW) union to target at the same time the three major manufacturers General Motors, Ford and Stellantis (Chrysler, Jeep). Three factories are affected at the moment, one from each company.

But in a video released Monday night, the union's new president, Shawn Fain, issued an ultimatum.

"If Ford, General Motors, or Stellantis do not make substantial progress toward a just agreement" by Friday noon, "the UAW will call on more members to join the strike."

A quick resolution is still possible, but unlikely according to experts, as the cost for each side remains low at this stage.

Rather than halt all production by one or all three groups, the UAW launched a limited strike.

This targeted strike tactic, if it "does not apply as much pressure on one of the companies, creates uncertainty," said Harry Katz, a professor at Cornell University's School of Industrial and Labor Relations, estimating that it could last six to eight weeks, if not longer.

The affected plants produce medium-sized pickups that generate comfortable sales without being goose that lays the golden eggs for historic builders in Detroit, Michigan.

If this action is spectacular because unprecedented, the blow is not critical for the profitability of the groups. Not at least at the moment.

"The union has given itself the ability to escalate and strike against sites that could be more painful," said Michelle Kaminski, a professor at Michigan State University who specializes in corporate labor relations.

The shortfall could be between $41 million and $64 million per week in operating income, according to a note from Deutsche Bank.

Striking UAW union members gather outside the Ford plant in Wayne, on September 16, 2023 in Michigan © BILL PUGLIANO / Getty / AFP

Just under 13,000 members of the union, out of its 146,000 members working for these groups, are concerned. This reduces the use of its wool stocking to help the strikers, which reaches 825 million dollars (772 million euros).

According to the German bank, the action triggered Friday will draw about $ 6.5 million per week (6.1 million euros).

Pressure

"This situation seems very bearable at the moment, illustrating the UAW's strategy not to immediately paralyze the large-scale production circuit but rather to inject a high level of uncertainty regarding the scale of the strike (...) to put pressure, depending on the progress of the negotiations," Deutsche Bank said.

Nelson Lichtenstein, a specialist in the history of industrial relations, expects that the strike will soon be extended perhaps with the weekly addition of new factories until an agreement is reached.

UAW union members on a picket line outside Ford's Wayne plant on September 15, 2023 in Michigan © Matthew Hatcher / AFP

"The threat is the next goal," he said.

For several months of aggressive posture for the development of new four-year collective agreements, Shawn Fain announced a strike and the sites that would be affected two hours before the expiry of the contracts Thursday at midnight in the absence of agreement.

The union is demanding a 40% wage increase, corresponding to that received by group leaders over the past four years. It also calls for an end to the various salary and benefit grids, an adjustment linked to the cost of living in a context of inflation and better social security coverage for retirees.

For the union, it is a question of returning to the standards in force before the financial crisis of 2008 when the bankruptcies of General Motors and Chrysler had forced it to make major concessions.

By negotiating simultaneously with the three groups, the union broke with the tradition of discussing with one group - even if it meant striking - and then using the agreement reached as a reference for negotiations with the other two manufacturers.

Experts nevertheless expect that the UAW will seek to use its agreement with the first group that will compromise, to obtain from the other two the same economic conditions including wages.

Analysts at Cox Automotive consider GM to be "probably more vulnerable" than Stellantis or Ford.

Paul Jacobson, chief financial officer of General Motors, indicated in July that stocks of the most popular new models reached about ten days, with the aim of reaching 50-60 days by the end of 2023.

Among those favorite vehicles are the Chevrolet Colorado and GMC Canyon, both manufactured at the Wentzville, Missouri plant. One of the three on strike.

© 2023 AFP