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Tensions have escalated after a strike at automakers in Detroit despite US President Joe Biden’s call for a return to the negotiating table, with Ford laying off hundreds of workers hours after the work stoppage began.
Nearly 13,000 UAW members went on strike at three factories early Friday when their contracts expired at midnight without a deal. The plants in Michigan, Missouri and Ohio are owned by Ford, GM and Stellantis respectively, marking the first time in history that the union has gone on strike against all three automakers at the same time.
Ford said late Friday that it had laid off 600 workers who had not walked out of the Michigan plant, blaming “knock-on effects” from others in the painting and final assembly departments who had done so. The UAW had only ordered certain departments to strike.
Production is “highly interconnected,” the company said, adding that the striking workers had “directly impacted operations in other parts of the plant.” The laid-off employees worked in the factory’s body shop department and a metal stamping subassembly department.
“This is not a lockout,” Ford said. “This dismissal is a consequence of the strike.”
Ford’s announcement came after Biden ordered two top White House officials to mediate talks as he urged both sides to find a deal to end a work stoppage with potentially damaging economic consequences.
In a speech from the White House on Friday, the president urged the UAW and the automakers to return to the negotiating table to find a “win-win” agreement, suggesting it was up to the companies to come up with a better offer.
Auto companies’ “record profits” should be matched by “record contracts” for the UAW, Biden said.
He also said he would send Julie Su, the acting U.S. Secretary of Labor, and Gene Sperling, a White House economic adviser, to help broker the talks.
Earlier on Friday, the CEO of America’s largest automaker denounced the UAW.
“I am extremely frustrated and disappointed,” GM’s Mary Barra told CNBC. “We don’t have to strike now. We have put a historic offer on the table.”
Barra added that “every negotiation takes on the personality of the leader,” a reference to Shawn Fain, who won the UAW presidency and promised a more aggressive stance toward automakers.
The UAW is asking for a wage increase to 36 percent over four years, while the automakers are offering no more than 20 percent. The union also wants to end a two-tiered wage system, where newer workers take four years to reach the same pay as older workers.
The strike could spread to more factories and distribution centers depending on progress at the negotiating table. The UAW has dubbed it the “Stand Up Strike,” in reference to the 1930s Sit Down Strike that helped build the nascent union and the larger American labor movement.
“If we have to pull out all the stops, we will,” Fain said Thursday. “Everything is on the table.”
The strike represents a political problem for Biden, who has cast himself as the most pro-union US president in recent history and is now caught between his desire to support workers’ demands and fear of the action’s economic impact on the economy. political level. crucial industrial Midwest.
Several congressional Democrats have backed the UAW in the standoff with U.S. automakers. Elissa Slotkin, a moderate Democratic congresswoman from Michigan who is running for an open Senate seat next year, said she would join the picket line this weekend. The UAW held a rally in Detroit on Friday evening with Bernie Sanders, a left-wing senator from Vermont.
“If you have auto workers who can’t afford the cars they make, that’s bad for the economy,” Sanders said.
Some Republicans also expressed support for the striking workers. “Supporting our nation’s auto workers as they demand higher wages and an end to the political leadership’s green war on their industry,” JD Vance, the Republican senator from Ohio who was close to former President Donald Trump, wrote on social media.
Barra also appeared on CNN on Friday, where she defended her pay, which she said was tied to the company’s performance. In response, the UAW said on social media that “during the eight and a half minutes [Barra] When she appeared on CNN this morning, she “made” more money than any auto worker makes in a full workday. And that’s how the Big Three want to keep it.”
Economists worry that prolonged strikes could push up prices of new and used cars and hamper policymakers’ progress in curbing inflation.
“Such an outcome will pose a new wrinkle to the ongoing disinflation as it would halt the recent run of soft data in the economy. [consumer price index] component for motor vehicles,” said JPMorgan economists. “If the final contractual agreement involves a significant wage increase, this will also pose an upside risk to inflation in the sector.”