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United Auto Workers Union strike escalates

Tensions between the UAW and the Big 3 automakers companies have escalated. Ford’s employment offer, which includes over 20% wage increases across four years, cost-of-living allowances, improved retirement benefits, and other incentives was rejected by the union. The unsuccessful negotiations have led the UAW to expand the strike to two new assembly plants, the Ford Chicago Assembly Plant, and the GM Lansing Delta Township Assembly Plant.  

The union chose to exempt Stellantis from the recent expansion of strike activities due to last-minute concessions made by the company, including salary adjustments and acknowledgement of workers’ rights to strike. This expansion has added around 7,000 workers to the picket lines, bringing the total number of workers on strike to approximately 25,000 out of a total of 146,000 active workers at 43 facilities across the Big 3 automakers. Further, outside of the Chicago and Lansing Delta Township facilities, the Explorer and Aviator vehicles are only produced in China and are not currently imported to the U.S.  

Strike disruptions prompt widespread layoffs at affected supplier facilities  

The extension of the strike to additional plants led to a significant number of temporary layoffs at affected facilities. To date, Ford has experienced 930 layoffs related to the strike, with an additional 330 workers being laid off at the Stamping plant in Chicago during the third week, in addition to the 600 previously laid off. Ford has indicated that further layoffs are likely in the range of 325,000 to 500,000 across other Ford factories. Ford has also halted production at its battery plant in Marshall due to disruptions caused by UAW strikes.  

General Motors, on the other hand, has seen 34 more workers laid off at its Marion Metal Center in Marion, Indiana, and 130 union workers at the Parma Metal Center in Ohio, resulting in a total of 2,209 layoffs. Stellantis, meanwhile, has had a total of 368 layoffs, with no new layoffs occurring during the third week. Losses due to production disruptions and layoffs have been widespread. Estimates suggest that GM has incurred costs of approximately $191 million, while Ford has suffered losses of around $145 million.  

In a sign that automakers are expecting a drawn-out strike, General Motors secured a new $6 billion line of credit through October 2024, bolstering its balance sheet against a protracted strike that could widen to cut of production of its most profiable vehicles. Ford had previously secured $4 billion line of credit in August ahead of the UAW contract expiration.

During the first two weeks of the strike, several automotive parts suppliers, including CIE Newcor, ZF North America, LM Manufacturing, Challenge Manufacturing, Kuka AG, Hyundai Mobis, and Jaropamex SA, made announcements about employee layoffs. However, the third week witnessed further layoff announcements from automotive Tier-1 suppliers as well as sub-tier suppliers.  

A new survey by the Motor & Equipment Manufacturers Association (MEMA) that represents car parts suppliers showed that about one-third of suppliers have so far made layoffs due to the UAW strike, with more than 60% expecting to initiative further layoffs by mid-October.  

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