Updated: UAW takes out Ram pickups in latest strike expansion

The United Auto Workers union on Monday ordered 6,800 members to strike at Stellantis' largest assembly plant, halting output of the auto maker's profitable Ram 1500 pickup.

"Stellantis has the worst proposal on the table regarding wage progression, temporary worker pay and conversion to full-time, cost-of-living adjustments (COLA), and more," the union said in a statement.

The Sterling Heights Assembly Plant north of Detroit is Stellantis' only source of the current-generation Ram 1500.

The abrupt move is the UAW's first expansion of the strike since Oct. 11, when it added Ford Motor Co.'s Kentucky Truck Plant. That plant builds Super Duty pickups as well as the Ford Expedition and Lincoln Navigator large SUVs.

More than 40,000 UAW workers are now on strike.

“We’ve had talks through the weekends,” UAW President Shawn Fain told WXYZ Channel 7 in Detroit. “We just felt like it was time to turn it up.”

“They know where we need to be,” Fain said. “We can get there. We can get a deal done this week. But the company’s got to get serious and get down to business.”

Stellantis issued a blistering response:

"We are outraged that the UAW has chosen to expand its strike action against Stellantis ... The UAW’s continued disturbing strategy of 'wounding' all the Detroit 3 will have long-lasting consequences. With every decision to strike, the UAW sacrifices domestic market share to non-union competition. These actions not only decrease our market share, but also impact our profitability and therefore, our ability to compete, invest and preserve the record profit sharing payments our employees have enjoyed over the past two years."

Fain on Monday morning met workers at the Sterling Heights plant as they left, shaking hands and handing out picket signs, according to a union post on X, the social media site formerly known as Twitter.

In going after the Sterling Heights plant, Fain is pressuring CEO Carlos Tavares, who has transformed the underdog of Detroit to the most profitable by tightly managing costs. About 12 percent of the company’s production work force is made up of lower-paid temporary workers, the highest proportion of the Detroit 3 and a labor cost advantage.

Going into the negotiations, Stellantis, which was formed from the 2021 merger of Fiat Chrysler and France’s PSA Group, pushed to expand its pool of temporary workers to help navigate the transition to electric vehicles. Tavares says EVs will cost 40 percent more to make than internal combustion cars — a burden he can’t pass to consumers.

Wells Fargo analyst Colin Langan estimated that production losses at the truck plant will cost Stellantis $110 million in operating earnings per week, doubling the automaker's overall hit from the strikes to about $200 million a week.

The plant accounted for about 16 percent of North American production for Stellantis and is proportional to the strike against Ford's Kentucky plant in terms of production, said Marick Masters, professor of business at Wayne State University.

Fain on Friday warned of more walkouts at U.S. truck and SUV factories unless the automakers improved wage and benefit offers, insisting companies could afford more than the record packages on the table.

He said the Detroit 3 had converged on a 23 percent wage hike offer and made progress on other issues but told UAW members "there is more to be won". GM and Ford say additional cost-of-living increases already take their total compensation offers to a hike of over 30 percent.

"Last Thursday morning, Stellantis presented a new, improved offer to the UAW, including 23 percent wage increases over the life of the contract, nearly a 50 percent increase in our contributions to the retirement savings plan, and additional job security protections for our employees," Stellantis' Oct. 23 statement said. "Following multiple conversations that appeared to be productive, we left the bargaining table expecting a counter-proposal, but have been waiting for one ever since...

"Our very strong offer would address member demands and provide immediate financial gains for our employees. Instead, the UAW has decided to cause further harm to the entire automotive industry as well as our local, state and national economies."   

Fain has acknowledged some UAW members want to vote on the offers in hand but last week urged them not to give in to "fear, uncertainty, doubt and division" that he said were sowed by the companies.

Fain also told UAW members the talks were nearing an end.

"That's the hardest part of a strike," he said. "Right before a deal is when there's the most aggressive push for that last mile. "

ACR Alpine Capital Research portfolio manager Tim Piechowski, who owns GM shares, said he was concerned by the strike expansion.

"I don't know where this really stops with the UAW," he said. "What if Stellantis says, 'We have nothing more to give.' Then he's stuck. It's hard for me to be optimistic about any incremental strike regardless of the thought that it might be bringing you closer to the end."

On Oct. 16, Ford Chairman Bill Ford warned of the growing impact to the auto maker and the U.S. economy from the strike.

The total economic losses from the UAW strike have reached $9.3 billion, according to data released Monday by economic consultancy Anderson Economic Group, with the Detroit 3 suffering losses of $4.18 billion.

Bloomberg and Reuters contributed to this report.