Ford, UAW clash as union expands strikes

DETROIT, Sept 29 (Reuters) – Ford Motor (F.N) Chief Executive Jim Farley on Friday accused United Auto Workers leaders of holding up a new U.S. labor agreement and halting production at several factories due to a dispute over wages and benefits at new electric vehicle battery plants that have yet to start production.

Farley told a press briefing battery plant negotiations are difficult but added “I don’t think we have reached … an impasse but that day could come.” Hours before he spoke, UAW President Shawn Fain expanded the first-ever simultaneous strike against the Detroit Three automakers as it entered its third week.

Fain’s view of negotiations was very different from Farley’s as he ordered workers to walk off the job at Ford’s Chicago assembly plant and GM’s (GM.N) Lansing, Michigan, assembly plant. He said Stellantis was spared after last-minutes concessions by the Chrysler parent.

“Despite our willingness to bargain Ford and GM have refused to make meaningful progress,” Fain said in a video address. He noted that in the hours before his announcement, the UAW had seen a “flurry” of interest from the companies.

“I don’t know why Jim Farley is lying about the state of negotiations,” Fain said in a statement responding to the Ford CEO. “It could be because he failed to show up for bargaining this week, as he has for most of the past ten weeks.”

Fain said differences with Ford include retirement benefits and job guarantees.

Friday’s strike expansion covered about 7,000 workers, Fain said, bringing the total number on picket lines to 25,000, or about 17% of the union’s 146,000 members at the three automakers.

The union and the companies remain far apart on key economic issues. Fain has stuck with a demand for 40% pay hikes over a four-year contract, a position supported this week by President Joe Biden. The companies have offered pay hikes of about 20%.

Rather than the hammer blow of a mass walkout it has wielded historically, the UAW is strategically playing the companies against each other, using reprieves from expansion of work stoppages as encouragement with different automakers the last two weeks.

The expanded strike was still avoiding pickup trucks, Detroit’s biggest profit-makers, a sign of restraint. Workers on Friday walked out of the Ford assembly plant in Chicago that builds the Ford Explorer and Lincoln Aviator SUVs, as well as the GM plant in Lansing that makes the Chevy Traverse and Buick Enclave SUVs.

Farley said the union’s decision to expand walkouts at Ford threatened thousands of supplier jobs. He added many suppliers are “on a knife’s edge” because a more than two-week strike at the Michigan factory that builds Bronco SUVs and Ranger trucks.

Fain and UAW officials are pushing demands that “could have a devastating impact on our business,” Farley said.

Farley said the UAW chief was holding a deal hostage to the fate of electric vehicle battery plants, including three that Ford is building with outside companies and one it has planned to own itself in Marshall, Mich. The UAW wants those workers represented by the union and paid the highest-tier wages.

Ford is now reconsidering the size and scope of the $3.5 billion Marshall battery plant in part because of uncertainty over labor costs, Farley said.

Ford rivals General Motors and Stellantis also blamed the UAW for the failure to reach new contracts.

GM said in an email to employees it still has not received a comprehensive counteroffer to its Sept. 21 proposal. “Calling more strikes is just for the headlines, not real progress,” GM said.

Stellantis (STLAM.MI), which was spared an additional walkout, said: “We have made progress in our discussions, but gaps remain. We are committed to continue working through these issues in an expeditious manner.”

Fain said that moments before he was due to address members at 10 a.m., Stellantis made significant changes in its proposal. That led to a half-hour delay in his announcement, and spared Stellantis from escalation.

Fain cited progress with Stellantis around cost of living allowance payments, as well as right to strike over product commitments and plant closures. Talks continue at all three companies.

Arthur Wheaton, director of labor studies at Cornell University, said: “What Shawn Fain wanted is a tit for tat: If you’re good for us at the table, we won’t mess with you. If you’re bad with us at the table, we will escalate the strike.”

The UAW has ratcheted up pressure over the past two weeks. Workers went on strike on Sept. 15 at one plant each from GM, Ford and Stellantis. The union escalated on Sept. 22, when workers walked off the job at GM and Stellantis distribution facilities in 20 states nationwide.

Fain is also ordering or threatening strikes at other companies. UAW workers are threatening to walk off the job at heavy truck maker Mack Trucks on Sunday, and at three Detroit casinos. A UAW strike has shut down a plant that builds axles for Mercedes-Benz’s Alabama vehicle factory.

The effect of the walkouts on the automakers has been relatively limited compared to the financial hit that would come from halting assembly lines that build Ford F-series, Chevy Silverados and Ram trucks.

“It shouldn’t affect volumes too much. It’s another warning,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said of the added plants. “They haven’t hit the meat of the profits.”

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