UAW strikes GM's high-profit, big SUV plant; 5,000 more workers walk off the job in Texas

The UAW has now shut down what it says are the biggest moneymakers for each of the Detroit 3, expanding its strike Tuesday to include a General Motors plant that one analyst has called the most profitable auto assembly operation in the world.

The union ordered 5,000 workers off the job at General Motors’ full-size SUV plant in Arlington, Texas, a day after sending 6,800 workers at Stellantis’ Ram pickup plant in Sterling Heights, Mich., onto picket lines. About 8,700 workers at Ford Motor Co.’s Kentucky Truck Plant went on strike Oct. 11.

Stellantis on Tuesday said the shutdown of the Sterling Heights plant forced it to temporarily lay off 400 workers at an adjacent stamping plant and 125 at another stamping plant in nearby Warren. Those actions bring the total of strike-induced layoffs at Stellantis to 2,045.

Although production of stamped parts for the Ram 1500 has stopped, Stellantis said work at the plants in support of other vehicle programs continues.

GM on Tuesday said it was laying off 139 more employees  at its Parma Metal Center in Ohio because of the strike at Arlington, increasing its layoff total to 2,460.

Roughly 45,000 of the UAW's 146,000 members at the three automakers have now joined the strike since it started Sept. 15.

The union announced the move hours after GM reported a third-quarter profit and said the strike had cost the company $800 million so far.

"Another record quarter, another record year. As we've said for months, record profits equal record contracts," UAW President Shawn Fain said in a statement. "It's time GM workers, and the whole working class, get their fair share."

GM responded that it was "disappointed by the escalation of this unnecessary and irresponsible strike." The company said in a statement that had upped the value of its previous proposal by 25 percent last week and that the UAW's actions are "harming our team members who are sacrificing their livelihoods" and are "having negative ripple effects on our dealers, suppliers, and the communities that rely on us."

It was the first expansion of the strike to another GM facility since its Lansing Delta Township assembly plant in Michigan was added Sept. 29. A GM assembly plant in Wentzville, Mo., and 18 parts distribution centers also are on strike.

Arlington Assembly, which makes the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade, generated about $25 billion in revenue and $4 billion in pretax profit last year, Benchmark auto analyst Michael Ward told Reuters in June, based on GM’s regulatory filings. That would make it the most profitable auto plant in the world, according to Ward.

Kentucky Truck, which makes Super Duty pickups and the Ford Expedition and Lincoln Navigator full-size SUVs, also generates about $25 billion in revenue, Ford has said. The UAW described Stellantis’ Sterling Heights Assembly Plant, the company’s only producer of current-generation Ram 1500 pickups, as the company’s “largest plant and biggest moneymaker.”

GM and Stellantis have not disclosed how much the Arlington and Sterling Heights plants contribute in revenue. Ford said its Kentucky Truck Plant produces a Ford Super Duty pickup or a Ford Expedition and Lincoln Navigator SUV every 37 seconds and contributes $25 billion in annual revenue — more than Southwest Airlines, Marriott International and Nordstrom.

The Arlington plant is represented by UAW Local 276. Officials at the chapter did not respond to a message from Automotive News seeking comment.
 
GM said the factory is supported by multiple stamping, propulsion and components plants in the U.S. and Canada and estimated it has a $255 million weekly impact on roughly 270 suppliers.

The automaker said in June it would invest more than $500 million at the Arlington plant to build future versions of its full-size SUVs.

Nearly three weeks ago, Fain said during a weekly Facebook Live address to UAW members that he had been prepared to expand the strike to GM’s Arlington plant, but called it off after citing progress with the automaker.

Fain said GM had agreed to put EV battery production under the terms of its national contract. GM’s Ultium Cells LLC battery cell plants are operated by a joint venture with LG Energy Solution.

CEO Mary Barra confirmed that offer for the first time Tuesday on the company’s third-quarter earnings call.

“We did have some conversations and we did put an offer on the table that would put the Ultium Cells under the scope of the master agreement,” she said. “We believed at the time that it would allow for — which it must have — benchmark economics and also operating flexibility because a battery cell plant is very different than some of the traditional operations we run right now. But at this point, that offer remains open, but the focus is on Ultium getting their own agreement.”
 
Employees at Ultium Cells in Ohio voted to unionize in December and the joint venture is negotiating with the UAW on a contract.

On Friday, GM and Stellantis each proposed raising top wages for UAW members to more than $40 per hour by 2027, which matches the 23 percent raises that Ford Motor Co. already had proposed. Ford and GM previously offered wage increases that topped out at $39.24 by the end of the next contract.
 
GM said that its latest offer "made substantial movement in all key areas." The offer would boost wages to $40.39 per hour by the end of the contract, including 10 percent in the first year, GM said. Wages for temporary employees would increase 26 percent to $21 per hour.
 
The automaker also offered to reinstate cost-of-living adjustments to employees with seniority starting in the first year of the contract, which it said would increase pay by more than 30 percent when combined with wage increases. GM said it would convert active full-time temporary employees with at least one year of seniority to permanent full-time status upon ratification and going forward. Profit-sharing payments would be available to temporary employees who have worked at least 1,000 hours.
 
GM said it offered a faster path to reach top wages under its latest proposal — all employees with seniority status would achieve the top wage under the life of the deal. Fain said in a Friday social media broadcast that GM had offered a three-year wage progression for current workers but proposed retaining a four-year grow-in period for new hires, though GM did not confirm the timetable.

Wells Fargo analysts estimated Tuesday that GM will lose out on production of roughly 6,600 vehicles per week and an estimated $130 million per week before interest and taxes, which bumps GM’s total weekly cost to roughly $250 million. Unlike Ford and Stellantis, GM does not have a full-size pickup plant on strike.

GM said earlier Tuesday it was losing $200 million per week from the strike before Arlington was added.
Analysts wrote in a research note that “escalation is likely needed” to win support for a tentative deal from the union rank and file.

Cox Automotive estimated in early October that the Tahoe and Suburban had fewer than 30 days' supply, while Escalade inventory hovered around 30 days. The dealership technology company did not break out Ram 1500 inventory levels but said at the time that Stellantis’ brands had the highest days’ supply of the Detroit 3 and that Ram overall then had 108 days’ supply.

Last week, Cox estimated Ford’s Super Duty line had a 66-day supply in mid-October, down slightly from 67 days the month before, while the Expedition had a 101-day supply, down slightly from 102 days in September.

The Lincoln Navigator had enough stock to last 136 days, Cox said, up from 117 days in mid-September.

GM shares closed down 1 percent at $28.56.

Michael Martinez and Vince Bond, Jr. contributed