UAW strike bypasses Illinois plants for now, but the state’s auto industry depends a lot on negotiations | Cars

Friday’s United Auto Workers strike, which shut down assembly plants in Michigan, Ohio and Missouri, may have overtaken Illinois for now, but the state remains in the middle of everything as the labor dispute continues.

From Ford’s Chicago assembly plant on the city’s southeast side to the small river town of Belvedere near Rockford, where the union and state hope to restart the mothballed Stellantis Jeep plant, the course of negotiations could dramatically shape Illinois’ auto industry for many years. Come.

Seeking higher wages, shorter work weeks and improvements to pensions and health care plans amid record profits for the Big Three automakers, the UAW took the unprecedented action of striking General Motors, Ford and Stellantis simultaneously after a four-year contract expired at midnight Thursday. .

“It’s uncharted territory, because they don’t hit all three, they usually hit one,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, a market research firm.

The UAW, which represents 146,000 members across the United States, directed workers at a General Motors plant in Missouri, a Stellantis plant in Ohio and a Ford plant in Michigan to stop work and take to the picket line, calling for a strike against all three manufacturers. For the first time in the Detroit-based union’s 88-year history.

At Ford’s Chicago plant, which has about 5,500 workers in three shifts making the Ford Explorer, Lincoln Aviator and Police Interceptor SUVs, local union leadership was on standby Thursday night, in case it gets a call from Detroit.

“I have my finger on the button to activate our strike committee,” said Chris Pena, president of UAW Local 551.

Ford also employs about 1,000 hourly workers at a nearby stamping plant in Chicago Heights who are members of UAW Local 588.

In 2019, Ford spent $1 billion to convert the nearly century-old Torrence Avenue facility, which had phased out production of the Taurus sedan to focus on building SUVs. Built exclusively at the Chicago Assembly Plant, the Explorer is among Ford’s best-selling vehicles.

While Ford has seen strong profits in the wake of the pandemic — the automaker generated net income of nearly $3.7 billion on revenue of $86 billion during the first six months of 2023, according to the company’s latest earnings report — workers have faced greater hardships, Pena said, noting To everything from COVID-19-related deaths to compensation that has stagnated since concessions were made during the Great Recession.

“We’re willing to go get what we feel we’re owed, which is better wages, a cost-of-living allowance and pensions for everyone,” Pena said. “We feel like we owe it when we see $1 billion in quarterly profits thrown in our faces after they keep taking it from us. And we’re the ones making those profits.”

A Ford spokesman did not respond to questions about the strike or the potential impact on its Chicago operations.

UAW Local 551 plans to meet Sunday afternoon at the union hall to discuss the strike and possible next steps, Pena said.

Ideas on the table include solidarity marches, social media campaigns, and other efforts to rally public support for the broader strike. More than anything else, Pena said Chicago association workers will be ready to call to be the next plant to strike, if necessary.

There could be more impact on the outcome of the strike at Belvedere, where Stellantis “indefinitely” idle the 60-year-old auto plant and laid off the last of 1,200 union workers in February after halting production of the Jeep Cherokee amid dwindling sales. Production of the next-generation Cherokee will reportedly move to the Stellantis plant in Toluca, Mexico.

Stellantis surpassed Belvidere when it announced last year that it would produce the next generation of Charger and Challenger EVs in Windsor, Ontario, where it is also building a $5 billion battery factory.

But Gov. J.B. Pritzker has not given up hope of convincing Stellantis to stay in Belvedere, offering the company significant incentives to reopen the plant.

While Stellantis could use Belvidere as a bargaining chip in negotiations by agreeing to return the product to the factory, it has not risen to the top of the list for UAW President Shawn Fain yet, according to industry analyst Fiorani.

“It was very quiet,” Fiorani said. “The idea of ​​moving a product there is never on the table when it comes to negotiating with the union. But I really didn’t hear him call out Belvedere specifically.

Rich Boyer, vice president and president of the UAW’s Stellantis division, and representatives of UAW Local 1268 in Belvedere, did not respond to requests for comment.

Fiorani said simultaneous negotiations between the Big Three and Unifor, the union that represents Canadian autoworkers, make it unlikely that Stellantis will back away from its decision to build EVs in Windsor instead of Belvedere. The most likely solution could involve any number of vehicles that are manufactured in Mexico, he said.

However, Fiorani said, if this vehicle is not electric, it will be a short-term solution at best.

Stellantis spokesman Jodi Tinson declined to comment on the Belvidere plant plans.

The state’s toolkit includes the Illinois Investment Act, which created a $400 million “closing fund” to incentivize electric vehicle manufacturers and other companies to locate, expand or remain in the state with appropriate financing. The Illinois Reimagining Electric Vehicles Act of 2021 incentivizes electric vehicle manufacturers to locate in the state with tax breaks, including a December amendment that increases the incentive to 75% of state income tax for automakers that retain employees as they transition to electric vehicle production .

If Stellantis doesn’t pan out, Illinois is exploring other options — including foreign electric vehicle makers — to fill the void. In July, Pritzker led a delegation to the United Kingdom seeking to promote the state as a destination for electric vehicle manufacturing. Sources familiar with the mission said that the efforts may bear fruit.

The state also recently selected a large parcel of land next to the Belvedere plant to entice manufacturers to consider the site.

“We think there’s an opportunity to bring in more companies, especially large manufacturers,” said Dan Sales, CEO of Intersect Illinois, the state’s public-private economic development arm. “The reason we secured a package like this is to make it easier for this to happen.”

Sells said the best possible outcome is for Stellantis to return to the factory. But as time goes by, the skilled workforce that built the Jeep Cherokee begins to move on and look for new jobs, making it more difficult to get the lights on again for the automaker.

If Stellantis doesn’t reopen the plant, the state is also prepared to move forward and has already received a number of inquiries about the Belvidere site, Sells said.

The UAW’s last strike in 2019 against General Motors lasted 40 days, and extended to parts suppliers. With low inventory in the wake of the pandemic, ongoing supply chain disruptions and a potential prolonged and expanded strike against the three automakers, the economic fallout could be much worse this time, Fiorani said.

Fiorani said small spare parts suppliers may be forced to stop work due to a long strike. Meanwhile, agents and customers will need to navigate a roughly 40-day average supply of inventory — better than the pandemic lows, but well below pre-pandemic levels. He added that if the strike continues for more than 40 days, the inventory of new cars will likely be exhausted.

As a result, this means higher prices for new and used cars for consumers.

They stocked as much new and used vehicles as possible, said Scott Kunes, chief operating officer of Kunes Auto and RV Group, a family-owned, Wisconsin-based dealership with more than 40 stores throughout the Midwest, including seven in northern Illinois. In anticipation of the strike.

But it is not customary to say that the stock will not last long.

“If this were a prolonged strike, it could have very serious consequences for our inventory supplies,” Kunis said.

Like the semiconductor shortage, Kunis said his dealers will turn to used cars when new ones aren’t available. But the supply of late-model used cars has been somewhat depleted by low new-car inventories.

Kunis said his dealers take production disruption into account while setting prices for current inventory of new and used cars.

“We don’t have a strike fund that can pay employees if our shelves are empty,” Kunis said. He added: “So we will move into the used car market, and this will force used car prices to rise again. New car prices will also rise. We have already started to look at some of the models that we know are the most restrictive.”

One beneficiary of the strike may be electric truck maker Rivian, a non-union shop.

Rivian launched production in September 2021 and now has about 7,000 employees building electric pickup trucks, SUVs and delivery trucks for Amazon at a formerly vacant 3.3 million-square-foot auto factory in downtown Normal.

The electric car maker, which has been struggling to ramp up production amid supply chain disruptions, raised its annual target for 2023 to 52,000 vehicles. In addition to gaining production muscle, Rivian opened its first showroom in Chicago last week.

Production remains at its highest levels and the year-end target has not changed. A Rivian spokesperson declined to comment on the UAW strike on Friday.

For Ford’s Chicago plant, Friday was “business as usual” for workers on the assembly line, Pena said. But he said he is working under an expiring contract, and with brothers on strike in three other states, the union’s 5,500 employees are closely monitoring negotiations and staying on guard.

“No one wants to go on strike,” Pena said. “But we are prepared if it comes down to it. We know that sacrifices will be made, and the only power we have is to hurt the company and its profits, because then they start to listen.”

(tags for translation) cars

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