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The United Auto Workers expanded its strike on Detroit’s automakers for the second time in as many days as 5,000 members walked out of a General Motors Co. plant producing some of its most profitable vehicles.
UAW President Shawn Fain made good on his veiled threat Friday to expand the strike to get more out of the automakers even as he said they were moving closer to a deal. GM’s Arlington assembly plant in Texas makes the Chevy Tahoe, GMC Yukon and Cadillac Escalade large sport-utility vehicles.
By striking pickup truck and SUV plants Fain is hitting the US automakers at the factories that make their cash cow models, putting a harder squeeze on the companies to give more to workers. Fain made his latest move just hours after GM reported quarterly revenue and earnings that beat Wall Street’s expectations — and made a point of this when he extended the walkout.
“Another record quarter, another record year. As we’ve said for months: record profits equal record contracts,” Fain said in a statement Tuesday. “It’s time GM workers, and the whole working class, get their fair share.”
GM said in a statement that it’s “disappointed by the escalation of this unnecessary and irresponsible strike.” The company said it made a “comprehensive offer” last week to the union that increased the total value by about 25%.
The latest walkout follows the UAW’s decision Monday to strike Stellantis NV’s Ram pickup truck factory in Michigan, the automaker’s largest and most profitable plant. It is part of a plan by Fain to ratchet up pressure on the automakers as he attempts to improve economic offers that include a 23% wage increase from all three companies. The union is demanding they increase that raise offer to 25%, Bloomberg has reported.
After six weeks, there are now more than 45,000 workers on strike at the three companies, the union said. It has shut down the Detroit automakers’ three most profitable plants, beginning with the Oct. 11 walkout at Ford Motor Co.’s Kentucky truck plant that builds F-Series Super Duty pickups and big SUVs. Ford said that plant generates $25 billion a year in revenue.
Earlier Tuesday, GM announced a strong quarter of earnings in which its $2.28 a share in profits beat the Wall Street consensus forecast of $1.84. Net income would have nearly matched last year if not for strike-related costs of $200 million. Revenue of $44.1 billion also beat estimates and GM saw US sales rise more than 19%.
The strike has cost GM $800 million to date and was set to chop $200 million off its profits every week before the shutdown in Arlington.
Despite its earnings performance, GM withdrew its guidance for the year because the strike has made it too difficult to forecast profits going forward. Company Chief Financial Officer Paul Jacobson said GM will provide guidance once the company has a ratified contract and a precise handle on costs.
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