Automaker Layoffs Soar Amid Ongoing UAW Strikes
Detroit’s automakers, General Motors, Ford, and Stellantis, have implemented significant layoffs, affecting approximately 4,800 workers across various factories. These layoffs are not limited to plants directly impacted by the ongoing strikes orchestrated by the United Auto Workers (UAW) union, which have now surpassed four weeks.
The automakers assert that the strikes have compelled them to initiate the job cuts. They argue that the layoffs primarily target factories producing parts for assembly plants that have been shut down due to the strikes. In some instances, layoffs have even occurred at plants reliant on supplies from striking parts factories.
However, the UAW firmly rejects this argument, deeming the layoffs unjustified and an attempt by the automakers to exert pressure on union members to accept less favorable terms during negotiations. The factories affected by these layoffs are situated in six states: Michigan, Ohio, Illinois, Kansas, Indiana, and New York.
Industry analyst Sam Fiorani from AutoForecast Solutions suggests that the layoffs essentially reflect the automakers’ financial losses resulting from the strikes. By reducing or suspending operations at plants experiencing strike-related parts shortages and running below full capacity, the companies can mitigate further financial setbacks.
Fiorani explains, It doesn’t make sense to keep running at 30% or 40% of capacity when it normally runs at 100%. We’re not looking at huge numbers of workers relative to the ones actually being struck. But there is fallout.
Bryce Currie, Vice President of Americas Manufacturing at Ford, states in a press release, While we are doing what we can to avoid layoffs, we have no choice but to reduce production of parts that would be destined for a plant that is on strike.
UAW President Shawn Fain responds by accusing the automakers of leveraging layoffs as a means to compel the union to settle the strike. According to Fain, given the companies’ substantial profits, there is no need for any layoffs.
The UAW initially commenced the strike against General Motors, Ford, and Stellantis on September 15, initially targeting one assembly plant from each manufacturer. In subsequent weeks, the union expanded its strike to include 38 GM and Stellantis parts warehouses. Ford and GM assembly plants were subsequently added. Overall, approximately 25,000 workers across the three automakers have joined the strike.
Striking workers are receiving $500 per week from the UAW’s strike pay fund. In contrast, employees who are laid off may qualify for state unemployment aid, which can be higher or lower than the provided strike pay, depending on individual circumstances.
Fain asserts, The UAW will make sure any worker laid off in the Big Three‘s latest attack will not go without an income.
At this stage, GM reports laying off 2,330 workers, including 1,600 at a temporarily closed assembly plant in Kansas City that manufactures the Chevrolet Malibu sedan and Cadillac XT4 small SUV. This facility relies on metal parts produced at the GM plant in Wentzville, Missouri, which is currently on strike. Other GM locations experiencing layoffs include Lockport, New York; Toledo, Ohio; Marion, Indiana; Parma, Ohio; and Lansing, Michigan.
Ford has laid off 1,865 workers, including 600 auto-body and parts-stamping employees in Wayne, Michigan, who are not directly involved in the strike but have been impacted due to a nearby assembly plant being struck. Additional Ford locations with layoffs include Chicago; Sterling Heights and Livonia, Michigan; and Cleveland and Lima, Ohio.
Stellantis announced late Monday that it has laid off around 640 workers. This figure encompasses 520 employees at an engine factory complex in Trenton, Michigan, which supplies a Jeep plant in Toledo, Ohio, currently affected by the strike. Other locations with layoffs include a metal casting plant in Kokomo, Indiana, and a machining factory in Toledo.
Fiorani predicts that if the strike continues to expand, further layoffs at non-striking plants are likely. Once metal stamping factories have fulfilled the parts requirements of non-striking facilities, the automakers would likely cease operations at those plants.
Meanwhile, separate companies that manufacture parts for the automakers are also likely to have laid off workers, although these layoffs might not be publicly reported. Patrick Anderson, CEO of the Anderson Economic Group, suggests that a survey conducted by the MEMA Original Equipment Suppliers trade association indicates that 30% of its members have initiated layoffs, with over 60% anticipating layoffs by mid-October.
While larger parts suppliers can probably withstand the strike, smaller companies that produce parts for major manufacturers may lack sufficient funds and borrowing capabilities to weather the job actions. Fiorani highlights that some of these smaller suppliers have only a handful of employees and lack multi-billion-dollar collateral for securing loans.
To date, the UAW has chosen to concentrate on a limited number of plants from each manufacturer instead of conducting a synchronized strike involving all 146,000 UAW members. Last week, the union expressed progress in negotiations and opted not to add more plants to the strike. This decision followed GM’s agreement to incorporate joint-venture electric vehicle battery factories into the national master contract, ensuring prospective unionization of these plants.
The issue of unionizing battery plants remains a significant point of contention in the negotiations. The UAW seeks to unionize these plants to safeguard jobs and secure top wages for workers impacted by the industry’s ongoing shift to electric vehicles.
As the strikes persist, the possibility of further layoffs looms over non-striking plants. The ongoing dispute has already inflicted financial losses on automakers and parts manufacturers alike, with the smaller suppliers bearing the brunt alongside plant workers deprived of their regular income.
