The United Auto Workers union has picked General Motors as the target company for this year’s contract talks with Detroit’s three automakers.
The move announced Tuesday means that GM will be the focus of bargaining, and any deal with the company will set the pattern for Ford and Fiat Chrysler. It also means that if the union decides to go on strike, it will be against GM.
Contracts between the union representing about 152,000 workers and GM, Ford and Fiat Chrysler expire at 11:59 p.m. on Sept. 14.
Earlier Tuesday, the union announced that over 96% of its members voted to authorize strikes against the companies.
The strike authorization vote is a normal part of the bargaining process, and it doesn’t mean that there will be a work stoppage. But tensions are high in contract talks this year because the automakers are making billions in profits and workers want a bigger slice. The companies, though, want to get closer to parity with foreign automakers with U.S. factories that are mainly in the South.
In a statement, the union said 96.4% of workers at General Motors voted to authorize a strike, while it was 95.98% at Ford and 96% at Fiat Chrysler.
Picking GM as the target is no surprise because it’s the most profitable of the three companies, and it also has announced plans to shutter four factories in Ohio, Michigan and Maryland. The union has pledged to fight the closures at two Detroit-area factories, in Lordstown, Ohio, and near Baltimore. Production already has stopped in Lordstown, Baltimore and one of the Detroit-area factories.
“We are focused. We are prepared and we are all ready to stand up for our members, our communities and our manufacturing future,” union President Gary Jones said in a statement Tuesday.
GM said it looks forward to “constructive discussions” with the union to build a strong future for employees and its business.
GM, the nation’s largest automaker, likely was picked because talks there will be the most difficult of the Detroit Three, said Kristin Dziczek, vice president of labor, industry and economics at the Center for Automotive Research, an industry think tank.
Although she doesn’t know how negotiations have been going so far, the likelihood of a strike was high even before the union picked GM, Dziczek said. The union raised strike pay for workers and has said it will use all tools in its toolbox during contract talks.
In addition to the four plants that GM has slated to close, it also has three other factories in Michigan and Kansas that aren’t being fully utilized, and the union will seek new products for those plants, she said. GM also leads all automakers in production of vehicles in Mexico, another thorny issue for the union.
It’s also possible there will be an economic downturn within the term of the next four-year contract, so the union will seek job and income security, Dziczek said.
Adding to the tension is the automakers’ quest to trim hourly labor costs, which have grown when compared with Southern U.S. factories run by Toyota, Nissan, Hyundai-Kia, Volkswagen and others.
Fiat Chrysler pays about $55 per hour in wages and benefits to UAW workers, while it’s $61 at Ford and $63 at GM. That compares with an average of $50 per hour at plants owned by foreign-based automakers, according to the Center for Automotive Research, an industry think tank.
Also playing into the talks is a corruption investigation into the union’s leadership. Last week federal agents searched Jones’ suburban Detroit home, and several union leaders and executives have been found guilty of taking money from a training center run jointly by the UAW and Fiat Chrysler.
Jones, who has not been charged, marched in Detroit’s Labor Day parade but exited the route before its completion and didn’t speak to union members. About 20 marchers carried signs calling for the union to be reformed.