UAW Expands GM Strike, Disrupting Pickup Production and Heightening Financial Pressure

The negotiated deals secured a historic 25% wage increase over a 4-1/2-year contract for workers and enabled the resumption of truck assembly lines at these companies.

The United Auto Workers (UAW) escalated its strike against General Motors (GM.N) by including the Spring Hill, Tennessee, engine plant, potentially disrupting GM’s pickup production and exacerbating its financial woes.

This extension of the seven-week strike makes GM the sole Detroit automaker without a contract agreement, contrasting with Chrysler-owner Stellantis (STLAM.MI), which reached an accord with UAW on Saturday, and Ford (F.N), which did so on Wednesday.

The negotiated deals secured a historic 25% wage increase over a 4-1/2-year contract for workers and enabled the resumption of truck assembly lines at these companies.

Within GM’s negotiations with UAW, contentious issues include retirement benefits and matters concerning temporary workers.

GM faces greater pension-related costs due to a larger number of retirees, particularly those hired before 2007, compared to its competitors, Ford and Stellantis.

UAW President Shawn Fain expressed disappointment in GM’s reluctance to reach a fair agreement, while GM emphasized its desire for a swift resolution.

The Spring Hill plant, employing 4,000 workers, supplies engines to nine assembly plants responsible for producing some of GM’s top-selling and most profitable vehicles.

This expansion of the strike’s impact adds to the financial strain on GM, already grappling with a $400 million weekly loss from the ongoing strike at its Arlington, Texas, assembly plant.

No immediate resumption of talks was expected on Saturday, leaving the timeline for GM and UAW negotiations uncertain.

The agreements reached with Stellantis and Ford will require ratification by all workers.

President Joe Biden commended the Stellantis agreement, highlighting the importance of unions and collective bargaining in creating middle-class jobs.

The deal also includes the reopening of Stellantis’ Belvidere, Illinois, assembly plant, which will manufacture midsize trucks, potentially competing with Ford’s Ranger and GM’s Chevrolet Colorado and GMC Canyon models.

Additionally, Stellantis committed to building a battery plant adjacent to the Belvidere facility.

Illinois Governor Jay Pritzker lauded the agreement as a “huge win for Illinois” and pledged incentives to support the automaker’s expenses.

Stellantis also opted to keep two facilities previously at risk of closure – an engine manufacturing complex in Trenton, Michigan, and a machining operation in Toledo, Ohio.

The company pledged $19 billion in new investments in U.S. operations and the creation of 5,000 jobs, reversing its initial plan to cut 5,000 jobs.

Notably, the UAW secured the right to strike over product investment decisions, with Fain emphasizing the union’s commitment to advocating for blue-collar workers nationwide.

However, automakers contended that UAW demands would significantly raise costs and put them at a disadvantage compared to nonunionized competitors like Tesla (TSLA.O) and foreign brands such as Toyota Motor (7203.T).

The UAW negotiations coincided with other high-profile labor campaigns, underscoring a revitalized labor movement amid labor shortages in various sectors.

The contract talks attracted the attention of political figures, including President Biden and Republican rivals, recognizing the significance of auto-producing states like Michigan in their 2024 campaign strategies.