UAW strike hits Big Three moneymakers. What's next?
STERLING HEIGHTS, Mich. (CBS DETROIT) – Within two weeks, the United Auto Workers union has hit the most profitable plants at each of the Big Three automakers.
On Tuesday, Day 40 of the historic stand up strike, the union called on 5,000 workers at General Motors' Arlington Assembly Plant in Texas to hit the picket line.
Insiders say the latest creates the maximum amount of disruption without bringing the Big Three to their knees.
The GM walkout came hours after the automaker announced they made a profit of just over $3 billion in their most recent quarter, even with the ongoing strike, which executives say is costing the company about $200 million a week.
"What we've got to do is make sure that number one, we sign a contract that we know we can compete in the global marketplace because we want to make sure that these are good jobs, and they're good jobs for the next people as well, that are going to be taking over, we're protecting the brand, the company, the franchise in the future," said Paul Jacobson, CFO of General Motors.
The union spared GM's Arlington plant, which makes the Chevy Tahoe and Cadillac Escalade, almost three weeks ago when GM agreed to put EV battery plant workers under the union's master agreement.
With no significant progress since that deal was made, the union made GM its target Tuesday.
"I think the UAW is feeling some internal pressure to get this over with, and what it wants to do is to get the companies to be more forthcoming," said Marick Masters, a professor of management at Wayne State University.
GM says it has offered the union a record contract, including a 23% pay hike and reinstatement of cost-of-living adjustments.
In a statement, GM wrote in part: "We are disappointed by the escalation of this unnecessary and irresponsible strike. It is harming our team members who are sacrificing their livelihoods and having negative ripple effects on our dealers, suppliers and the communities that rely on us."
Masters says UAW President Shawn Fain's options are narrowing.
"His degrees of freedom are running thin. His options are narrowing as he has struck more plants," he said. "His next set of options might be to ramp up with another plant or two or to go on a company-wide basis. But he's reaching that tipping point in which members are going to say, we've got to apply maximum pressure to see if they can be more forthcoming, and that may ultimately force a company-wide strike at one or more of them."
Ford will report its earnings after the markets close on Thursday.
For more on the UAW strike, visit here.
