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US auto union expands strike after GM profits top estimates

The US auto workers union announced Tuesday (Oct 24) it had extended its strike to a giant General Motors truck plant as it called on the company to sweeten a pay offer in light of strong quarterly profits.

“Another record quarter, another record year. As we’ve said for months: record profits equal record contracts,” said United Auto Workers (UAW) President Shawn Fain in announcing the walkout of 5,000 workers from the assembly plant in Texas.

“It’s time GM workers, and the whole working class, get their fair share.”

The latest UAW union stoppage, which drew sharp criticism from GM, came hours after the automaker reported a better than expected US$3.1 billion in third-quarter profits that showed only a limited impact from the strike. 

The plant in Arlington, Texas makes some of GM’s most profitable vehicles, including the Chevy Tahoe, the Chevy Suburban and GMC Yukon.

Earlier Tuesday, GM characterized strong sales of sport utility vehicles such as those from Arlington as part of a “foundation” for the company that means “consistently strong pricing and margins,” according to a letter from GM Chief Executive Mary Barra.

“We are disappointed by the escalation of this unnecessary and irresponsible strike,” GM said in reaction to the Arlington stoppage.

“It is time for us to finish this process, get our team members back to work and get on with the business of making GM the company that will win and provide great jobs in the US for our people for decades to come.”

The union has gradually expanded the strike, first launched on Sep 15 at GM and fellow “Big Three” automakers Stellantis and Ford with a stoppage of just three plants with about 12,700 UAW members.

With Tuesday’s action, that number has now topped 45,000.

Fain last week suggested that the union was close to a deal with the automakers – but “these extremely profitable companies have more to give.”


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GM’s solid results were fueled by higher vehicle sales in the United States amid still-strong pricing trends for popular truck and sport utility vehicles, offsetting a drop in sales in China and some other overseas markets. 

Revenues rose five percent to US$44.1 billion as the company withdrew its full-year forecast, citing uncertainty over the strike.

The UAW strike cost GM US$200 million during the quarter. The stoppage has also resulted in a US$600 million hit thus far in the fourth quarter, said Chief Financial Officer Paul Jacobson.

On Monday night, Jacobson said the strike results in a US$200 million weekly impact based on the operations targeted by the UAW and not including the latest Arlington action.

“We remain optimistic and hopeful that we’ll make progress and get this resolved,” Jacobson told reporters in a briefing. 

Jacobson acknowledged that the earnings are “strong,” but said the union needs to recognise that “there’s a lot of uncertainty out there in the future with electric vehicle adoption and with the economy.”

“We can’t get ourselves into a situation of signing a deal that we can’t afford to pay or that doesn’t allow us to compete in the global marketplace.”

In her letter to investors, Barra defended the company’s current offer to the UAW, reiterating the proposal of roughly US$84,000 a year for the majority of the hourly workforce constitutes a “record” contract.

In a conference call with analysts, GM executives emphasized a previously-announced plan to cut US$2 billion in fixed costs that will protect profitability.

But in light of heightened expenses from a new UAW contract, GM will “have to look at potentially reducing fixed costs further,” Jacobson said. 

The company can target “efficiencies across the board in engineering and designing the vehicles,” Jacobson said. “We’re committed to making it work.”

Shares of GM rose 0.3 per cent in late-morning trading.


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