Introduction

The United Auto Workers (UAW) labor union has initiated targeted strikes against the three major Detroit automakers. These stoppages are affecting three plants that produce popular models such as the Ford Bronco, Chevrolet Colorado, and Jeep Wrangler.

It is the first time in history that the UAW has simultaneously struck all three Detroit automakers. However, while the strikes began at the same time, they may unfold differently in the coming days, with Stellantis potentially facing more challenges in reaching an agreement compared to its competitors Ford Motor and General Motors.

Stellantis’ Unique Challenge

Stellantis, formed in early 2021 through a merger between Fiat Chrysler Automobiles and French automaker Peugeot, faces a problem that its local rivals do not. The company has excess production capacity worldwide and has announced plans to close or sell 18 of its U.S. facilities, including factories and parts depots. Currently, Stellantis operates approximately 35 factories and parts distribution centers in the U.S.

The UAW is unlikely to accept this plan willingly, making it difficult for Stellantis to reach a deal.

Preparation for a Lengthy Strike

Stellantis may have been anticipating a prolonged strike, considering it had more vehicles in its U.S. dealer inventories at the beginning of September compared to its competitors. Cox Automotive data reveals that all four of Stellantis’ U.S. brands had over 100 days’ worth of vehicles on dealer lots or in transit, while Ford and GM had significantly fewer days’ worth of vehicles.

Historically, the Detroit automakers tend to have larger supplies due to their diverse configurations of full-size pickups.

Differences in Strike Duration

The UAW’s strike against Ford could potentially be shorter in duration. Recent comments from Ford executives suggested that Ford was closest to reaching an agreement with the union. The UAW chose to strike only part of Ford’s Michigan Assembly Plant, specifically the areas where vehicles are painted and where final assembly takes place. In contrast, all UAW-represented workers at GM’s Wentzville, Missouri assembly plant and Stellantis’ Jeep Wrangler factory in Toledo went on strike.

General Motors may also avoid a prolonged strike, as details of GM’s final offer before the strike indicated similarities to Ford’s offer, including a 20% wage increase over the four-year contract term and additional benefits.

Stellantis Preparing for a Battle

As of Friday morning, Stellantis appeared to be bracing for a lengthy battle. The company expressed disappointment in the UAW’s refusal to reach a fair agreement and announced that it will take necessary steps to protect its North American operations and the company as a whole.

Following standard practice, negotiations between the UAW and the automakers will pause on Friday and are expected to resume over the weekend.