GM, Ford talk about U.S. auto strike 1:44
(CNN) -- The United Auto Workers (UAW) union announced an extension of the strike against GM and Stellantis, but said progress in negotiations with Ford means it will not expand the number of Ford workers participating in the walkouts.
UAW President Shawn Fain made the announcement Friday morning. "Today at noon Eastern Time [Miami time], all General Motors and Stellantis parts distribution centers will be on strike," he said. "We will shut down parts distribution until those two companies come to their senses and come to the table with a serious offer."
However, Fain said there was a significant improvement in Ford's offerings and that's why the strike won't be extended there.
"We want to recognize that Ford is serious about wanting to make a deal," he said.
The strike will now expand to GM and Stellantis' 38 distribution and parts centers spread across 20 states. Distribution centers typically ship parts to dealerships for use in repairs, so the move could quickly cripple dealerships' ability to repair vehicles, which is the most profitable part of their business.
Still, the announcement of progress at Ford raised hopes that the strike, at least there, could end relatively quickly. Before Friday, there were few public signs that the union and the management of the three companies were close to reaching an agreement.
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"Ford is working diligently with the UAW to reach an agreement that rewards our workforce and allows the company to invest in a vibrant and growing future," Ford said in a statement. "Although we are making progress in some areas, we still have important gaps to close on key economic issues. In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success."
The announcement comes just days after Ford reached a tentative agreement with Canadian union Unifor, which averted a strike by more than 5,000 auto workers in Canada that would force it to close its three factories there.
While the strike will continue on the three assembly lines that are already currently protesting (a Ford pickup truck plant in Wayne, Michigan; a GM plant in Wentzville, Missouri; and Stellantis, in Toledo), no factories will be added, only parts distribution centers. But that will create a lot of pressure on GM and Stellantis from their dealer network. Stellantis sells cars in North America under the Jeep, Ram, Dodge and Chrysler brands.
The union kicked off the measures Sept. 15 with strikes at just three of the companies' 25 assembly plants in the United States, and about 12,700 of its 145,000 members in the traditional "Big Three" left early that morning.
Some 5,625 UAW members are working on the new strike targets announced Friday. That will bring the total number of UAW members on strike to just over 18,300. And the strike will now spread from coast to coast, where workers at facilities from Virginia to California will be removed from their workplaces.
Dealers and repair centers
The new strikes are specifically aimed at hurting dealers.
Big Three car dealerships are not owned by Big Three companies themselves. Instead, they are individual franchises that buy cars from manufacturers and then sell them to customers.
However, simply selling cars isn't how those dealerships make a lot of money: dealerships make a lot of money from mechanics at service centers. Any time a car needs to be repaired, a new part is likely needed, and many drivers take their cars directly to dealerships for service, especially when they're still under warranty.
But the UAW's expanded strike now targets parts distribution centers for GM and Stellantis. Without shipping new parts to service centers, dealers will soon start running out of stock, which could force them to turn down car repairs and large potential revenues.
Without that extra revenue, dealership owners themselves could begin to ratchet up pressure on GM and Stellantis to start making concessions to their workers, much like Ford has.
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Ford, which has made concessions on everything from eliminating wage levels to job security, will likely see its dealer service centers operating normally.
Inflation, previous concessions
This is the first time the union has hit the big three automakers at the same time. Traditionally, he had chosen one company at a time as the target of his labor actions. And most of the time, all the workers of that company went on strike at the same time.
The union insists that it is better to continue with this new strategy of selective strikes that disrupt operations, but raised the possibility of additional actions in the future if companies do not meet their demands.
During Friday's announcement, Fain referenced "maintaining our flexibility and our influence to scale, as needed."
The union began negotiations demanding an immediate 20% increase for its members and a total of 40% in wage increases over the four-year term of the contract.
He also wants to reverse a series of concessions the union gave up during negotiations in 2007 and 2009, when Ford was nearly cashless and GM and Stellantis' predecessor, Chrysler, were on their way to bankruptcy and federal bailouts.
Among the concessions it wants to revoke: The UAW wants companies to offer traditional pension plans and retiree health care to workers hired since 2007, a service now only available to longest-serving employees. It also calls for a resumption of cost-of-living adjustments to protect workers from rising prices, as well as an end to the lowest level of wages and benefits for contract workers since 2007.
Looking ahead to Friday, companies are offering raises of around 20% over the life of the contract, including immediate increases of around 10%.
But even though the companies make record or near-record profits, they say union demands are unaffordable and would put them at a serious competitive disadvantage compared to their non-union rivals, including Tesla and foreign automakers operating plants in the United States.
At 10:30 a.m. Miami time, Stellantis was up 0.98%; Ford rose 3.57%; and GM rose 0.7%.
CNN's Mike Ballaban contributed to the report.