Blaring horns from truck after truck drowned out the cheering thanks from dozens of United Auto Workers picketers Friday morning, hours after the union called its first strike in four years against the Big Three legacy auto companies.
Throughout the day, more support came from Democrats like Michigan’s governor, two U.S. senators and President Joe Biden, who said the automakers need to “go further” to settle a contract that so far has generated what the car companies call a historic offer and the UAW notes is a historic strike.
Others watched the strike more somberly, knowing that the economy will lose billions of dollars if a walkout lasts more than a few days against Ford Motor Co., General Motors and Stellantis, all of which operate headquarters in Michigan.
“It has a ripple effect throughout the supply chain and our whole state, so we’re nervous,” said John Walsh, CEO of the Michigan Manufacturers Association.
Walsh, like many other business leaders in the state, said he’s still hopeful that the seeds of a settlement can take root when talks resume on Saturday.
But Friday morning in Wayne, workers dressed in red, the UAW’s symbol of solidarity, waved signs and raised fists in front of Ford Motor Co.’s Michigan Assembly plant, a decades-old complex about 12 miles west of Dearborn that got new life in recent years when the automaker set up popular Bronco and Ranger pickup production.
A portion of the plant is the only one in Michigan among three chosen as the first strike targets by the auto union. It’s also the only one from Ford, as the union set up a three-company strike, also affecting a GM factory near St. Louis and the Toledo Jeep complex run by Stellantis.
“When I came in, it was a great job,” Angela Alexander, 49, of Canton Township told Bridge Michigan as she paused on her picket shift. “It still is a great job. Ford gave me a great life.
“But it’s time for them to give back what they took years ago when we made concessions to keep everything afloat.”
UAW President Shawn Fain was elected last spring by 500 votes over the incumbent, vowing “No concessions, no corruption, no tiers,” referring to what the union considers a two-tier hiring system and pay since the Great Recession.
“This is our defining moment,” Fain said during a Facebook Live event Thursday that attracted over 100,000 viewers less than two hours before the walkout. Soon, he joined workers at the gates of Michigan Assembly, smiling as he answered questions and underscored his platform: 46-percent raises over four years, restored pensions and improved retiree health care, a 32-hour work week with 40-hour pay and job security as automakers reposition their manufacturing footprint to build more EVs and fewer gas-fueled vehicles that require far more parts.
The automakers are posting record profits, Fain, Biden and the strikers say. In turn, each asserts that record contracts should follow for the UAW. In the first half of 2023, Ford made $3.7 billion, GM made $4.9 billion and Stellantis made $12.1 billion.
Top pay for a UAW assembly plant worker has been $32 per hour, with the union seeking a raise to $47.14.
Newer hires start at under $20 per hour and can spend eight years climbing to the top tier of pay and benefits. And temporary workers, used to fill open shifts, start at under $17 per hour, or about $35,000 per year.
Alexander said she’s concerned about the erosion of her wages amid inflation, and she also sees younger coworkers making less than $20 per hour to start and struggling to reach the middle-class life that she was able to attain when she started at Ford.
“As soon as I got up to full pay, I bought a house by myself in my 20s,” she said. “And I was so proud of that. With this pay now, I couldn’t afford a house by myself.”
Biden said he understands workers’ frustration.
“Over generations, autoworkers sacrificed so much to keep the industry alive and strong, especially the economic crisis and the pandemic. Workers deserve a fair share of the benefits they helped create,” Biden said.
Gov. Gretchen Whitmer, a Democrat and union supporter who also celebrated auto company expansions in the state, is staying in close contact with both sides of the negotiations, her spokesperson told Bridge late Friday morning.
“The strength and vitality of Michigan’s economy depends in equal parts on our skilled and dedicated labor force, as well as the Big Three Automakers whose industry has long defined our state economy,” Whitmer’s spokesperson Stacey LaRouche said.
How long will inventory last?
The strike may have been foregone in this negotiating round, said Brian Calley, CEO of the Small Business Association of Michigan.
“In most negotiations, it looks to me like both sides are eager to find common ground and avoid a strike,” Calley said.
That wasn’t the case with this contract.
Hopes that a strike would not be called evaporated immediately, as pickets started right after the 11:59 p.m. contract expiration.
The Big Three are strategizing about how to manage walkouts at their respective factories, General Motors Corp. CEO Mary Barra told CNBC on Friday.
Staffing can also be affected. Ford is saying that the 600 non-striking workers at Michigan Assembly will be laid off, the Detroit News reported. Reuters reported Friday that a GM factory in Fairfax, Kansas, could be idled next week due to the Missouri factory walkout.
Experts also are watching inventory levels at the Big Three, both for production and sales volume, since a decline in either would signal risks to profitability.
August sales slowed more than expected while production continued at a normal pace, possibly anticipating a strike and leaving the automakers trying to stockpile, Jeff Schuster, president of Troy-based Global Vehicle Forecasts at LMC Automotive, told Bridge Michigan on Wednesday at the Detroit Auto Show preview.
“(The Big Three) have higher inventory than anyone else in the industry right now,” Schuster said.
Ford and GM are at about 60 days, while Stellantis is at about 70 days.
“They can weather a little bit of time if there’s a short strike,” Schuster said.
Beyond 30 days, supplies will be depleted, he said, unless consumers avoid the Big Three due to the strike.
Either way, the year’s profitability could be impacted. In 2019, a strike against GM cost the automaker about $3 billion as it produced 300,000 fewer vehicles.
The overall U.S. auto industry expects to sell as many as 15.6 million vehicles in 2023, Schuster said. A 45-day strike would cut that about 5 percent to 14.97 million.
The strike comes as the legacy American automakers are investing billions of dollars to retool and build high-tech factory capacity to electrify their models. But competition remains fierce, with Tesla far outpacing all of them in sales of electric vehicles.
For the first half of 2023, top-selling EVs in the U.S. were the Tesla Model Y with an estimated 190,500 sales and the Tesla Model 3, at 121,500.
Three models of Teslas, combined, sold about 10 times as many as the third-leading EV, all models of the Chevrolet Bolt, with 33,659 sales. Ford’s Mustang Mach-E was the fourth-leading seller at 14,040 vehicles.
EV sales are forecast to grow to 20 percent of the market by 2025. But with new manufacturers entering the market, experts say the Big Three will have to fight to retain their 40-percent market share as consumers turn to the new platform.
While all eyes are on the Big Three factory targets, unclear is how many other facets of their business could be affected: Dealerships, parts for repairs, even auto deliveries by Teamsters could be stalled as that union commits to honoring the strike.
Waves of small businesses in the state also stand to be affected, said Calley, the small business association CEO, including the places where automakers spend their earnings.
In addition, Calley said, “the automotive supply chain is filled with small businesses.”
Auto suppliers employ at least 300,000 in Michigan, said Walsh, of the manufacturing group. Those companies will have to make decisions soon about their production schedules as uncertainty about the next potential strike targets takes hold.
Others urged a longer view.
“Certainly, there’s a short-term impact. You can’t avoid that,” said U.S. Gary Peters, D-Bloomfield Township, who joined strikers at the picket lines in Wayne.
“But I think you have to weigh that to the long-term impact if workers make more money, they put more money into the economy and you have a stronger economy.”
‘We deserve more’
Many of the striking workers at Michigan Assembly in Wayne on Friday said it’s time for Ford to not just raise their pay, but eliminate the two-tier system and recognize their contributions to the company’s profitability.
“We’ve been under long contracts for years now and we deserve more,” said Jeff Wilson, 45, of Livonia, a utility worker at the plant. “We’ve given back concessions and haven’t gotten any back.”
Alexus Hill, 30, of Detroit, said the strike had to happen when automaker offers didn’t meet demands.
“I know that they’re not going to try to give us what we deserve, so we need to get out here and strike and show them that we’re serious.”
Many of the workers on the picket line were from the striking plant, with others coming from nearby Woodhaven, UAW offices and other sites to show solidarity.
They stood in groups ranging from a handful to a couple dozen at gates along the south side US-12, an eight-lane divided highway, reveling in the support from vehicle after vehicle.
Across the road, dozens more stood in line outside Local 900 offices, where the doors opened at 9 a.m. for workers to register for picketing shifts and strike pay, and to learn more about what it means to be on strike. The food bank, some workers said, was already stocked.
Big Three workers from across southeast Michigan who aren’t yet on strike are watching what happens in Wayne, Toledo and Missouri.
Dontell Adams, 34, of Southfield works at the Stellantis Warren Truck Assembly, which produces the Jeep Wagoner and Ram Classic.
A member of UAW Local 140 for three years, he’s one of the temporary part-time employees making $17 per hour who can become permanent and get a raise if the UAW demands are met.
“I’m feeling anxious (and) nervous,” he said.
Adams entered the auto industry after seeing three uncles — including one who worked at the same plant — make a good living. He said he can’t afford the $80,000 trucks he builds.
“Not by a long shot,” he said.
Adams said supplemental employees like himself don’t receive many of the benefits afforded to other full-time employees like dental care, tuition reimbursements, profit sharing and annual bonuses.
Part-time workers also deal with unreliable schedules with no guarantee of 40 hours per week. He can’t pick up another job because he can be called in to work with short notice and threatened with termination if he doesn’t come in.
“There’s no guarantee that (they’ll) need me,” he said. “Even though I’m putting in as much blood, sweat and tears as the person next to me, who is making double what I make.”