DETROIT — The United Auto Workers union turned up the heat on General Motors as 5,000 workers walked off their jobs Tuesday at a highly profitable SUV factory in Arlington, Texas.
The walkout comes one day after the union went on strike at a Stellantis pickup truck factory in Sterling Heights, Michigan, north of Detroit.
The additional plants further escalate a labor dispute that's in its sixth week and now has about 46,000 union workers walking picket lines. Rhetoric from both sides illustrates how far apart they remain on what each considers fair wage and benefits offers as the union and automakers hold firm to their positions.
The addition of the Arlington plant, which makes big truck-based SUVs such as the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade, came just after GM announced strong third-quarter financial results. The SUVs are among GM's most profitable vehicles.
The company on Tuesday posted a net profit of just over $3 billion for the quarter, down 7% from a year ago. But the company reported strong demand and prices for its vehicles.
UAW President Shawn Fain noted that GM beat Wall Street expectations yet its offer lags behind Ford, preserving a two-tier wage structure and offering the weakest 401(k) contribution of all three of the automakers at 8%. “It’s time GM workers, and the whole working class, get their fair share,” Fain said.
GM CEO Mary Barra said on Tuesday's earnings conference call that the company already has made a record offer and won’t agree to a contract that jeopardizes the company’s future.
Barra said GM’s record offer rewards employees but doesn’t put the company or UAW jobs at risk. “Accepting unsustainably high costs would put our future and GM team member jobs at risk, and jeopardizing our future is something I will not do,” she said in a statement.
On the picket line in Texas, Ethan Pierce, a material handler with more than 23 years at GM, said workers sacrificed, making concessions to help save GM when it was in dire financial trouble around the 2008 U.S. financial crisis. “We started asking for some of our stuff back. They didn't want to give it to us,” Pierce said.
Now, with inflation driving up prices, workers are struggling, he said. Among the sticking points is GM's refusal to let workers go on strike over plans to close factories, Pierce said. “If you're being treated unfairly, sooner or later you have to stand up,” he said. “When we get treated better, everybody else gets treated better.”
GM said that it's disappointed in the escalation at Arlington strike, calling the strike “unnecessary and irresponsible.” The strike is harming employees and will have “negative ripple effects on our dealers, suppliers, and the communities that rely on us.”
Automakers have made layoffs since the strike began and blamed walkouts for the job cuts. And shares of General Motors Co. are down more than 14% this year, touching lows Tuesday that haven't been seen since 2020 during the pandemic, when the company's sales growth tumbled almost 11%.
Last week GM made an offer that increased its previous one by about 25% in total value, the company said.
In a note to shareholders Tuesday, Barra said GM has made a record offer to the union that will raise top factory pay to $40.39 per hour, or roughly $84,000 per year in four years.
The company also said the strike is expected to cut pretax earnings by $800 million this year, and another $200 million per week after that. And those estimates were made prior to the Arlington strike, GM said.
Thomas Kochan, a professor of work and employment at the Massachusetts Institute of Technology, said the escalation means the negotiations are at a pivotal point.
“The pressures for reaching an agreement that everybody can live with are immense on both the company and the union,” he said. “The effects of an expanded strike across the three companies and prolonged over time would be profound, and would have very serious negative effects on the companies and on the workforce.”
The companies, he said, are close to the limits on their offers and the union is close to what it legitimately can expect to get.
“There comes a time where the parties have to have very private conversations in negotiations,” Kochan said. “It’s time for the public rhetoric to stop.”
He said both sides have to test whether an agreement is possible. “They are professional negotiators and should be able to find the point where both parties can live with a new agreement.”