UAW strike day 6: Walkouts trigger more layoffs as impact spreads

The impact of the United Auto Workers' targeted strike against the Detroit automakers is spreading further through the auto industry, with General Motors Co. idling a Kansas facility that employs 2,000 hourly workers and Stellantis NV saying hundreds of workers in Ohio and Indiana could be laid off soon.

GM said Wednesday that it was forced to shut down the Fairfax Assembly plant in Kansas City because of the UAW strike at a Missouri facility that supplies the Kansas plant.

“It is unfortunate that the UAW leadership’s decision to call a strike at Wentzville Assembly has already had a negative ripple effect, with GM’s Fairfax Assembly plant in Kansas being idled today and most of its represented team members leaving the plant as there is no work available," the Detroit automaker said in a statement.

The layoff is due to a shortage of stamped parts supplied by Wentzville’s stamping operations to Fairfax, where the Chevrolet Malibu sedan and Cadillac XT4 SUV are built. Employees will not receive supplemental pay from GM while they're laid off.

The strike is also affecting workers connected to Ford Motor Co. and Stellantis NV plants, where UAW members walked out Friday. Jeep maker Stellantis on Wednesday said it was "immediately" laying off 68 workers at its machining plant outside Toledo as a result of the UAW's strike at its Wrangler and Gladiator plant in the city, now in its sixth day. Hundreds more at the Toledo machining facility could soon face the same.

The automaker said it anticipates another estimated 300 layoffs at Kokomo Transmission and Kokomo Casting in Indiana, according to a statement sent by spokesperson Jodi Tinson. She declined to share the specifics on the timing of that.

The layoffs come two days ahead of the UAW's deadline to see “serious progress” in talks with the Detroit Three automakers or strike more plants. There are 12,700 UAW members already on strike in the union's first simultaneous walkout against all three companies.

Storage constraints are causing the layoff at the Toledo Machining Plant in Perrysburg, Ohio. The site employs more than 400 hourly workers who belong to the UAW, and production for other vehicles will continue.

"Stellantis," the statement said, "continues to closely monitor the impact of the UAW strike action on our manufacturing operations."

Ford last week laid off about 600 workers at its Bronco and Ranger plant in Wayne after the UAW called a strike by body and paint shop workers there.

Meanwhile, LM Manufacturing — a Detroit-based supplier of seating for vehicles, including the Ford Bronco — temporarily laid off about 650 workers due to the strike. Magna International, the Canada-based Tier 1 automotive supplier, is a minority owner of LM Manufacturing as part of a joint venture with LAN Manufacturing, and confirmed the layoffs on Wednesday.

Collectively, the automakers have lost roughly 9,500 units of vehicle production at the struck plants through Tuesday, according to a research note from Deutsche Bank analysts. They note GM's Wentzville plant typically produces just under 1,100 vehicles per day, Ford's Michigan Assembly builds just under 900 vehicles per day, and Stellantis' Toledo North plant and nearby supplier park produce nearly 1,200 vehicles per day.

Those numbers will grow as the strike continues and the effects ripple through the production chain like it has already at GM's Fairfax plant, which reportedly builds just over 832 vehicles a day. Deutsche Bank estimates earnings hits of $43 million for GM, $35 million for Ford and $46 million for Stellantis, based on three days of lost production.  

GM exec slams UAW 'myths'

The companies have continued dialogue with the union starting over the weekend since the first UAW members walked out, but there still appears to be no significant breakthroughs to reach a tentative agreement.

Stellantis was the first company officially to pass an offer to the union since the strikes began. The offer was made on Tuesday, according to a statement from Tinson, but it focused on "subcommittee open issues" as opposed to the economics of a deal, such as wages, tiers and retirement benefits.

GM's last offer submitted on Thursday with a 20% general wage increase and other gains would bring its labor costs to $150,000 per worker annually, up from $134,000 under the current contract. 

While UAW President Shawn Fain has called the companies’ wage hike offers of about 20% inadequate, President Mark Reuss, in an opinion piece in the Detroit Free Press on Wednesday, called the automaker’s contract proposal a “record offer” and said the union’s demands would be “untenable.”

With the union saying it could add more plants Friday to its strike that began Sept. 15, Reuss accused the UAW of spreading “myths” about what the automaker can afford and what it's offering. He said GM’s offer "recognizes the many contributions our represented team members make to our company — past, present and future."

Reuss wrote that among the myths he wanted to debunk is that GM "doesn't pay its people a decent wage," which he said "is simply not true." GM's current offer to the UAW would bring 85% of the company’s represented employees to a base wage of about $82,000 annually, according to Reuss. And some of GM's entry-level employees would get to a maximum rate of $39.24 an hour at the end of a new contract, which for some workers would be a 141% increase, Reuss wrote.

Fain has said the 20% not-compounded wage increases offered by automakers "is not enough," after what the union sacrificed during the bankruptcies of GM and Chrysler LLC (now part of Stellantis). The UAW originally requested 40% not compounded (46% compounded) wage increases, which has since dropped to 36%. The union also wants an end to wage tiers.

Some items seen as 'nonstarters'

For experts, it's clear the companies and the UAW are far apart in talks. After reading Reuss' opinion piece, Marick Masters, a business professor at Wayne State University, said it seems like the UAW and GM are "at an impasse" with dialogue continuing.

He thinks that unless the union pulls back on some of its demands, getting a deal with GM will be difficult. "I just think the defined benefit plan, retiree health care, getting back the things they gave up are nonstarters," Masters said.

Reuss also argued GM is addressing the tiered wage system. The Detroit Three have proposed cutting the time it takes to get to the top rate to four years from eight.

He wrote that GM employees received "extremely generous retirement benefits." In its latest offer, GM would continue its "6.4% company 401(k) contribution for employees who are not eligible for pensions." The UAW wants to see a return of pensions for all employees.

Reuss noted that GM, which is pushing to have an all-electric lineup in 2035, is "at a pivotal point in our journey as we transition to an all-EV future." This year, GM is launching production of all-electric versions of the Chevrolet Silverado, Blazer and Equinox — three of its most popular internal combustion engine products.

UAW members will build the Silverado EV at Factory Zero Detroit-Hamtramck Assembly Center and at Orion Assembly in Lake Orion. The electric Equinox and Blazer are manufactured in Mexico.

GM's offer to the UAW has "work and products for every single one of our U.S. facilities," Reuss wrote. "As we started our transformation to EVs, we made sure we had work for the entire manufacturing team so we could bring everyone along on our transformation."

GM's current offer to the UAW comes with no plant closure, unlike in 2019 when the automaker closed a large assembly plant and two powertrain facilities. 

The UAW has claimed the automakers' record profits are fueling corporate greed, with CEO Mary Barra (the highest paid Detroit Three CEO) making nearly $29 million in 2022. GM estimates that its median employee compensation was $80,034 in 2022. The ratio of Barra's compensation to that of a median employee is estimated to be 362-to-1. In 2021, the median employee compensation was $69,433, making Barra's pay ratio 420-to-1.

To debunk the corporate greed claim, Reuss wrote that in 2022, GM's net income profit was $9.9 billion, and this year, its capital spending will be between $11 billion and $12 billion.

"If we don’t continue to invest, we will lose ground — quickly," Reuss wrote. "Our competitors across the country and around the world, most of whom are non-union, will waste no time seizing the opportunity we would be handing them."

Auburn Hills rally

Meanwhile, a couple hundred workers gathered late Wednesday afternoon to march outside Stellantis’ North American headquarters and technical center in Auburn Hills. The rally was organized by Local 412, an amalgamated local that represents approximately 1,600 engineers at several Stellantis plants and facilities and hourly workers at the technical center, said Todd Macker, the local’s vice president.

The rally came after reports that the Auburn Hills site is one of 18 facilities Stellantis is seeking the right to sell or close as part of efforts to modernize Mopar parts distribution centers and address underutilized facilities.

"CTC is not for sale," workers repeated in a sea of red as they up and down a sidewalk near the complex's entrance of Interstate 75. They also chanted, "Wentzville, Wayne and Toledo, stand up to the CEOs."

Yolanda Downs, 59, of Clarkston, a benefits and employee assistance program representative for Local 889 and a scheduler at Stellantis' Ram 1500 plant in Sterling Heights, said workers were there to make their voices heard, especially for the salaried bargaining unit who also are in the midst of negotiations.

These workers fear their jobs being outsourced to contractors or to other places in the world, Downs said. Many also want to see wage increases. Some salaried workers who have a degree start at less than $30 per hour, she said.

"I started as an hourly worker, and I heard about the SBUs, and I got my degree to be here," Downs said. "I want my daughter to have that same opportunity."

Ultimately, workers like Colin Bondy, 68, of Monroe, a maintenance worker at Stellantis' technical center, say they hope both sides "can come down from their high places" and make an agreement.

"The 46% wage increases, and 32-hour work week? That's embarrassing," Bondy said. "There are real people who need to make a real living. That's who I am out here for."

Others, though, say what the union is requesting is exactly what workers deserve, said Marnice Alford, 53, of Rochester Hills, who works in the paint department at Stellantis' Sterling Heights plant after transferring from her family and home when Saint Louis Assembly closed in 2009.

"Will we get it? I don't know," she said. "But it's inflation and what we gave up in 2008 and 2009 to keep the companies afloat. It's time to get back what they took from us."

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Staff Writer Jordyn Grzelewski contributed.