The United Auto Workers (UAW) union went on strike at Chrysler-parent Stellantis's largest assembly plant on Monday, hitting the automaker's profitable RAM 1500 pickup truck production in a major expansion of the more than month-old strike.
The UAW, which is striking the three big Detroit automakers, blamed the latest walkout by 6,800 workers at the Michigan plant on Stellantis having the "worst proposal" on the table on wage increases, temporary worker pay, and conversion to full time status as well as cost-of-living adjustments.
More than 40,000 union members working at Ford, General Motors, and Stellantis are now on strike since the walkouts began on Sept. 15—about 27 percent of the Detroit Three automakers' total workforce—part of an unusual campaign of simultaneous strikes.
Stellantis officials could not immediately be reached for comment.
The union has demanded a 40 percent wage hike, including a 20 percent immediate increase, improvements in benefits, as well as covering EV battery plant workers under union agreements.
The UAW's move against Sterling Heights is similar to its recent walkout from Ford's Kentucky Truck assembly plant, its most profitable single operation globally.
"Expanding it to the pickup trucks is really at the heart of what these companies produce," said Tim Ghriskey, a senior investment strategist at Ingalls & Snyder, which has owned auto stocks in the past.
"Labor is asking for so much. It's really hard for the automakers to roll over to all of it and if they do roll over, it will punish the stock. It's a very sticky situation."
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.
The UAW and the automakers are also bargaining over future wages and unionization policies for electric vehicle battery plants planned by joint ventures of the automakers and their South Korean battery partners.
Those talks are complicated, because the ventures are separate companies and the automakers do not have to cover them under their master UAW contracts under U.S. labor law.
United Auto Workers president Shawn Fain met workers at the 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.
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.
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" sowed by the companies. He also told members the talks were nearing an end.
Arthur Wheaton, director of labor studies at Cornell University, said the latest move by UAW was good news suggesting a deal could be close and that among the automakers Stellantis was the tougher one to close out a deal with.
"It's good news they did not say, 'We're not even close. We're going to strike GM and Ford,'" Wheaton said.
Bill Ford, company chair and great-grandson of founder Henry Ford, has warned the strike was taking a toll on the automaker and the U.S. economy. After five week of strikes, the economic losses for the auto industry had crossed $9.3 billion, Anderson Economic Group LLC estimated on Monday.
Stellantis shares closed up 2.2 percent in Milan trading. Ford and GM were roughly flat in New York.
(Reporting by David Shepardson in Washington, Joe White, and Ben Klayman in Detroit, Abhijith Ganapavaram and Nathan Gomes in Bengaluru; writing by Peter Henderson and Sayantani Ghosh; editing by Sriraj Kalluvila and Deepa Babington)