Stellantis’ offer of COLA to the UAW saved itself from further strikes

The United Auto Workers’ recent escalation in their strike against General Motors and Ford Motor Company has Michigan auto parts suppliers relieved for the time being.

For one thing, UAW President Shawn Fain has stopped cutting off automakers at the knees. It chose to hit both companies’ midsize SUV plants rather than target the plants where GM and Ford make their most profitable and best-selling vehicles: pickups and large SUVs. Therefore, the damage remains relatively limited.

In a last-minute maneuver by Stellantis, the automaker saved itself from further strike action when it offered to readjust its cost of living and meet some other union demands minutes before Fain’s 10 a.m. deadline on Friday. It’s a move industry observers say could potentially save thousands of ancillary parts supplier jobs in the state.

“There would have been interesting ramifications in Michigan if he had gutted the Stellantis JNAP (Jefferson North Assembly Plant) plant in Detroit, with other SUV manufacturers exiting,” said Lower Harbor, CEO of Harbor Results Inc.

“The good thing is that Stellantis came to the table.”

Instead, Fine ordered about 7,000 UAW members who work at Chicago’s Ford Association — where Ford makes the Explorer and Lincoln Aviator SUVs — and workers at General Motors’ Lansing Delta Township association — where GM makes the Buick Enclave and Chevrolet Traverse SUVs. – By leaving the place. Work on Friday afternoon. The strike did not include GM’s Lansing Regional Stamping plant or Ford’s Chicago Stamping plant.

Stellantis manufactures the Jeep Grand Cherokee and Dodge Durango SUVs in JNAP. In the second quarter, Grand Cherokee sales increased by 19% compared to the same period last year.

“I thought it was good for Stellantis to come to the table because that’s what’s profitable for them,” Harbor said. “If JNAP had hit, it could have hurt the Sterling Stamping plant and a bunch of other plants.”

Pat Green sighed in relief when he learned the news that Stellantis had been skipped as well. Green is CEO of Cascade Die Casting Group, which makes aluminum and zinc die castings for the automotive and appliance industries.

“We have content on the Jeep Grand Cherokee and content on the Ram pickup truck,” Green said. “So far, the full-size trucks haven’t been saved. Every time I hear one of these announcements, my worry is that we’re going to get a full-size truck every week.”

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This meant that each week, Green had to quickly assess the impact of the latest attack target on his company, respond to it and communicate with his 450 employees across two factories in Grand Rapids.

“So far, we’re better than most, but it’s a real challenge,” Green said. “We’re managing by minimizing overtime so everyone can keep working. If this continues, we’ll have to take some volunteers off.”

But by Oct. 1, when another hunting season begins in Michigan, he said he believes he will have volunteers.

“Deadline behavior”

Stellantis’ last-minute intervention was also important because it falls within the logic of collective bargaining, said Harley Chaiken, a professor emeritus at the University of California-Berkeley.

“Suddenly the people at Stellantis said, ‘Wait a minute, how much does it cost to grow more plants for a few weeks versus sweeten the pot now?’ They did the math and this problem is solved. This does not indicate that we are on the verge of a compromise; maybe”.

Stellantis, the maker of the Chrysler, Dodge, Jeep, Ram and Fiat brands, said it was “working extensively with the UAW to find solutions to issues of concern to our employees while ensuring the company’s ability to remain competitive under the fierce market conditions.” “Competition. We have made progress in our discussions, but gaps remain. We are committed to continuing to work on resolving these issues in an expeditious manner to reach a fair and responsible agreement that gets everyone back to work as soon as possible.”

The UAW’s latest move means there are now a total of about 25,000 UAW members on strike across the country. Fain first announced the strike as contract talks failed before the current contract expired at 11:59 pm on September 14. Fain announced the first wave of factories to hit: the Ford Michigan assembly plant (final assembly and paint only) in Fain, Stellantis Toledo Assembly. Assembly in Ohio and GM’s Wentzville Assembly in Missouri.

Then, last week, on September 22, Fine ordered union members working at GM and Stellantis’ 38 parts distribution centers across the country to go on strike. These facilities provide parts to dealers to make repairs on customers’ vehicles. Ford saved that time because it made “significant” bargaining progress by agreeing to reinstate its cost of living adjustments (COLA), eliminating some wage levels, giving the union the right to strike over any plant closures and more.

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Fain was about a half hour late for a Facebook Live presentation to members on Friday. The delay turned out to be due to Stellantis submitting its offer at the last minute.

“This is called deadline behavior,” said Art Wheaton, director of labor studies at Cornell University. “Often, during bargaining, the best contracts don’t come until the deadline is close to expiring. In this case, it shows that they were still bargaining until the last minute. It wasn’t predetermined. They were still working on it.”

Wheaton said he was relieved to see Stellantis move because he was concerned that it was the automaker that had made the least progress in negotiations with the UAW. He said that given that Ford made progress the week before and was excused from the strike on Sept. 22 and now with Stellantis doing the same on Friday, he sees a pattern that shows Fain’s strategy in setting these deadlines as moving the needle.

“My crystal ball says you’ll hear more on Friday next week and I think both Ford and GM will say, ‘We’re all getting close to our three offers, maybe we should make a better offer?'” Wheaton said. “I don’t think you’ll hear any more before Friday.”

Fine listed the issues where Stellantis has made “significant progress” as rewriting the 2009 COLA formula, allowing the right not to cross a picket line, the right to strike for product obligations and plant closures and agreeing to certain moratoriums on outsourcing.

Fain has ‘plenty of room to ramp up’

“Deadlines produce work,” said Marek Masters, a labor expert and business professor at Wayne State University. “Notably, he backed away from including Stellantis in this strike wave and encouraged automakers to compete against each other.”

There is also room for things to escalate. The facilities the union is hitting at Ford represent 18% of the automaker’s total North American production over the past eight months, Masters said. For GM, the facilities the union removed, including the Fairfax Assembly Plant in Kansas, which GM was forced to idle because of the strike in Wentzville, Missouri, accounted for 23% of GM’s production in the past eight months.

“This is another way of saying that the UAW has plenty of room to ramp up strike activity in incremental phases if they want to push the parties toward an agreement,” Masters said.

Shaiken added that it was surprising the union didn’t get a tentative agreement with Ford last week given that the UAW saved Ford parts distribution centers from going on strike last week. But Stellantis’ progress suggests that negotiations are continuing and that taking out SUV manufacturers is not “a huge cause for pain. It was a costly move for companies, but it was meant to speed up negotiations and not go back to square one.” “.

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Another month and the repercussions are fierce

But Masters warned that if the strike continues for another month and expands, the repercussions will be severe.

“You’ll see suppliers increasingly impacted and more layoffs,” Masters said. He said he counted about 6,000 layoffs at suppliers, including those at General Motors’ Fairfax, along with some people linked to Ford’s Wayne Association.

“I think this will progress, as dealers are unable to service cars, they may have to lay people off due to loss of revenue,” Masters said, referring to parts distribution facilities that are currently closed. “You’ll see an increasing ripple effect.”

Masters also said the longer the UAW goes without reaching an agreement with an automaker, the pressure in the rank and file will grow. He noted that some already feel guilty because they have an income while their union colleagues on the picket line live on a $500-a-week strike wage.

“This frustration will grow over time,” Masters said. “The workers will start putting pressure on Sean Fein.”

It has already happened to some extent, with one UAW member in the Lansing Delta Township Assembly telling the Free Press that week-to-week uncertainty about which facility will strike next is a concern among workers. The person’s name is not being mentioned to protect his job security.

“It’s great that Finn is using social media, but people are still saying he hasn’t given a timeline or when the next update will be,” the union member said. “So it’s just a completely different strategy. It makes people uncomfortable.”

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Contact Jimmy L. LaRue: [email protected]. Follow her on Twitter @jlareauan. Read more about General Motors and register on our website Auto Newsletter. Become a subscriber.

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