© Reuters. FILE PHOTO: A United Auto Workers union member holds a sign outside Stellantis Sterling Heights Assembly Plant, to mark the beginning of contract negotiations in Sterling Heights, Michigan, U.S. July 12, 2023. REUTERS/Rebecca Cook/File Photo
By David Shepardson
(Reuters) – Union workers at Volvo (OTC:) Group-owned Mack Trucks went on strike on Monday after overwhelmingly rejecting a proposed five-year contract, the United Auto Workers said, the latest tentative labor agreement to be voted down.
About 73% of the unit’s 4,000 workers in Pennsylvania, Florida and Maryland voted against the deal that included a 19% pay raise, said the UAW, which is in the midst of contract talks with Detroit’s Big Three automakers from whom it is also seeking wage hikes.
The proposed Mack deal had also included a $3,500 ratification bonus, improved retirement benefits, additional vacation for some employees and a reduction in the time needed to get to top pay.
In online forums, some Mack workers complained the raise was too small to keep up with inflation.
“I’m inspired to see UAW members at Mack holding out for a better deal, and ready to stand up and walk off the job to win it,” UAW President Shawn Fain said late on Sunday.
Mack President Stephen Roy said the company was “surprised and disappointed” by the strike.
Unions negotiating new contracts in the auto, shipping and healthcare industries have used labor actions to keep employers off-balance this year. Polls have shown most Americans broadly support the unions’ demands.
In the last 12 months, freight rail workers and employees at shipping company FedEx (NYSE:) have rejected tentative agreements between union negotiators and companies before eventually reaching deals.
The UAW has been on a targeted strike against facilities of the Detroit Three automakers since Sept. 15. About 25,000 of the 146,000 UAW employees at General Motors (NYSE:), Ford Motor (NYSE:) and Chrysler parent Stellantis (NYSE:) are on strike. Canadian workers at GM also face a contract talk deadline at midnight on Monday that could lead to another strike.
On Monday, GM said it was laying off nearly 200 additional workers due to the strike, bringing the total to more than 2,300. GM said it also improved its contract offer, boosting retirement contributions and cost of living payments.
GM’s revised offer did not match the 23% pay raise proposed by Ford. On Friday, the UAW said GM agreed that workers at joint-venture battery plants could be covered by union contracts, but GM offered no details on Monday.
After Mack workers voted down the deal, the UAW sent the company a strike notice saying “many topics” remain at issue, including wage increases, cost-of-living allowance, job security and wage progression.
Mack President Roy said the company “clearly demonstrated our commitment to good-faith bargaining by arriving at a tentative agreement that was endorsed by both the International UAW and the UAW Mack Truck Council.”
Mack, which was bought by Volvo in 2000, is one of North America’s largest makers of medium-duty and heavy-duty trucks.
Roy said Mack is part of “the only heavy-truck manufacturing group that assembles all of its trucks and engines” in the U.S. and competes against products built in “lower-cost” countries
The UAW said it would contact Mack to set dates to resume bargaining. Mack said it was committed to the collective bargaining process and remained confident it could reach an agreement.
“UAW members and workers across the economy are mobilizing to demand their fair share,” the UAW said in a letter to Mack. “The union remains committed to exploring all options for reaching an agreement, but clearly we are not there yet.”
Fain said on Friday the union would not expand the Detroit Three strikes, citing progress in talks, including that Ford had upped its proposed wage hike to 23% through early 2028.
On Monday, Deutsche Bank estimated GM has lost 34,176 vehicles of production during the strike, Ford 21,296 vehicles and Stellantis 18,893 vehicles, reducing total Detroit Three earnings by $946 million to date.
Mexico’s auto parts industry is expected to register a $412 million hit to production by Friday, a trade group said Monday.
Anderson Economic Group estimates a total economic loss of $5.5 billion through the third full week of the strike, including in lost wages, $2.68 billion in automaker losses, $1.6 billion for suppliers and $1.26 billion in dealer and customer losses.
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