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US president Joe Biden has directed two top White House officials to mediate talks between Detroit’s Big Three carmakers and the autoworkers union as he urged the sides to find a deal that would end a historic strike with potentially damaging economic consequences.
Thousands of members of the United Auto Workers walked out of three plants at midnight after their contract expired, with their leadership rejecting Detroit carmakers’ final offer and triggering a strike to try for a better deal.
The exiting workers were met by cheers from fellow union members and supporters. The factories — a Ford plant in Michigan, a General Motors plant in Missouri and a Stellantis plant in Ohio — produce trucks and sport utility vehicles that are popular products.
Speaking from the White House on Friday, Biden urged the UAW and the automakers to return to the negotiating table to strike a “win-win” deal and suggested it was up to the companies to come up with a better offer.
The president said car companies had not “fairly” shared their “record profits” with workers, adding that he understood the “frustration” of the employees in the car sector. The bumper profits enjoyed by the carmakers should be paired with “record contracts” for the UAW, the president said.
Biden also said he was dispatching Julie Su, the acting US labour secretary, and Gene Sperling, a White House economic adviser, to help mediate the talks.
The president’s remarks came several hours after signs that the situation had already deteriorated since the strike began, with the chief executive of the US’s largest auto manufacturer lambasting the UAW.
“I’m extremely frustrated and disappointed,” GM’s Mary Barra told CNBC on Friday morning. “We don’t need to be on strike right now. We put a historic offer on the table.”
Barra added that “every negotiation takes on the personality of the leader”, a reference to Shawn Fain, who won the UAW presidency promising a more aggressive stance against the carmakers.
The UAW is asking for a wage increase to 36 per cent over four years, while the carmakers are offering no more than 20 per cent. The union also wants to end the two-tier wage system, where newer workers take four years to reach the same pay as longtime employees, which carmakers have opposed.
The strike, already unprecedented by hitting all of the Big Three carmakers at once, could expand to more factories and distribution centres, depending on how the union fares at the bargaining table. The UAW has named it the “Stand Up Strike”, referring to the 1930s Sit Down Strike that helped build the nascent union, and the larger US labour movement.
“If we need to go all out, we will,” Fain said on Thursday. “Everything is on the table.”
The strike represents a political problem for Biden, who has cast himself as the most pro-union US president in recent memory and is now caught between his desire to support the demands of the workers and fears of the economic impact of the action in the politically pivotal industrial Midwest.
Several congressional Democrats have backed the UAW in the stand-off with the US carmakers. Elissa Slotkin, a moderate Democratic member of Congress from Michigan who is running for an open Senate seat next year, said she would join the picket line this weekend.
Some Republicans also expressed support for the striking workers. “Rooting for the auto workers across our country demanding higher wages and an end to political leadership’s green war on their industry,” JD Vance, the Ohio Republican senator close to former president Donald Trump, wrote on social media.
Barra also appeared on CNN on Friday, where she defended her pay, which she said was tied to company performance. In response, the UAW said on social media that “during the eight and a half minutes [Barra] appeared on CNN this morning, she ‘earned’ more money than any autoworker makes in a full work day. And that’s how the Big Three wants to keep it.”
Economists worry that prolonged strikes could push up new and used car prices and curb policymakers’ progress at taming inflation.
“Such an outcome will present another wrinkle for the ongoing disinflation as it would halt the recent streak of soft readings in the [consumer price index] component for motor vehicles,” said economists at JPMorgan. “If the final contractual agreement involves a significant wage increase, it will also present an upside risk for inflation in the sector.”