UAW strike day 20: Ford lays off 400 in Michigan, GM's costs hit $200M
Approximately 400 Ford Motor Co. employees at its Livonia Transmission and Sterling Axle plants are being laid off temporarily because of impacts from the United Auto Workers' strike against the Detroit Three automakers.
Ford is directing 350 workers at Livonia and 50 at the Sterling Heights plant not to report to work on Thursday, according to a statement sent by spokesperson Dan Barbossa. The layoffs are a result of the Detroit-based union's walkout on Friday at Chicago Assembly Plant, which produces the Ford Explorer, Lincoln Aviator and Police Interceptor SUVs. The union is paying its members who are laid off by the Detroit Three $500 per week, the same as members who are on strike.
The layoffs bring Ford's total to roughly 1,330 as the unprecedented strike marked its 20th day on Wednesday against the Blue Oval, General Motors Co. and Stellantis NV, the maker of Jeep, Ram and other vehicles. There are 25,300 UAW members on strike of 146,000 employed by the Detroit Three.
The UAW is expected to provide a Facebook Live update on bargaining to its members on Friday. It's unclear if it plans to expand the strike then, though the union and the automakers have indicated large gaps remain between the parties on certain issues.
Meanwhile, the labor action so far has cost General Motors Co. $200 million, according to a new filing with the Securities and Exchange Commission. The Detroit automaker has established a $6 billion line of credit.
GM is the only automaker yet to be spared in one of the union's strike expansion announcements as part of its targeted plant strike strategy. Since Sept. 15, the union has initiated work stoppages at GM's midsize truck plant in Wentzville, Missouri, all of the automaker's parts distribution warehouses and its Lansing Delta Township plant that produces Chevrolet Traverse and Buick Enclave SUVs.
In an interview with CNBC's "Halftime Report" show on Wednesday, GM Chief Financial Officer Paul Jacobson said the line of credit "is just prudent in light of some of the messages that we've seen from some of the UAW leadership that they intend to drag this on for months. We've got to continue to fund the transformation and really position GM for the future for all of our people."
The union is seeking double-digit wage increases, the end to a tiered wage structure and other demands. The UAW has expanded its strike against the automakers each week since it began.
The $200 million cost to GM is as of late September. The UAW on Monday provided a counteroffer to GM's Sept. 21 offer to the union. Details of the union's counter haven't been released.
Before the strike, Ford also set up a line of credit of $4 billion to bolster its financial flexibility in case the union called for a work stoppage.
More:Where UAW, Detroit Three automakers stand on key issues
GM says in addition to the 9,200 UAW members it employs who are on strike, it has laid off 2,175 at its plants that feed those facilities or require parts from them. It estimates the walkouts have affected another 2,500 workers at its suppliers.
The MEMA Original Equipment Suppliers trade association this week shared results from a Sept. 29 survey that found nearly 30% of 80 surveyed vehicle suppliers have laid off some employees because of the strike, and more than 60% indicated they expect to begin layoffs by mid-October if tentative agreements aren't reached.
Additionally, 70% of vehicle suppliers reported concerns over their sub-suppliers' financial viability without resolution, according to the results. More than half of idled suppliers said they would need at least one week to return to pre-strike production levels.
MEMA says it's working with the Biden administration to provide financial assistance for suppliers with less than $200 million in annual revenue.
In addition to Chicago Assembly, Ford workers on strike have stopped production at the Michigan Assembly Bronco and Ranger plant in Wayne. Ford has been spared from one of the union's strike expansions, the one that took down all of GM's and Stellantis' parts warehouses.
Ford on Tuesday said it made its seventh and "strongest" offer to the union.
The Dearborn automaker's current offer includes product commitments for every UAW-represented plant in the United States, an increase in starting pay for temporary workers to $21 per hour, conversion upon ratification of all temporary workers with at least three months of continuous service and a wage increase of "more than 20%."
It also includes the restoration of cost-of-living allowances, the elimination of wage tiers that currently have workers at components plants on different wage scales than assembly plant workers, reducing by "more than half" the time it takes workers to reach the top of the wage scale.
Stellantis last week was spared from more of its plants joining the strike since it moved on several issues right before UAW President Shawn Fain announced new targeted plants.
The Jeep and Ram maker made progress in talks with the union on areas including cost-of-living adjustments that had been suspended in 2009, the right not to cross a picket line, the right to strike over product commitments and plant closures, and an outsourcing moratorium.
Workers at Stellantis' Toledo Jeep plant in Ohio and all of the automaker's Mopar parts warehouses remain on strike.
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