UAW launches unprecedented strike against GM, Ford and Stellantis

Driving the news: UAW President Shawn Fain said the union would begin a strike at three factories after national contracts expired at 11:59pm Thursday, rather than striking all U.S. operations of the companies:

• GM's assembly plant in Wentzville, Missouri.
• Ford's assembly and paint plant in Wayne, Michigan.
• Stellantis' assembly plant in Toledo, Ohio.

The big picture: There has never been a strike against all three automakers at once.

• "We must show the world that our fight is a righteous fight," Fain said Thursday night on a livestream.
• Fain said the UAW could gradually expand the strike to include additional plants — or all of them — if the automakers don't give in to the union's demands: "If we need to go all out, we will. Everything is on the table."
• Workers who go on strike will get $500 per week in strike pay from the union.

The other side: Ford said in a statement Thursday night that the UAW didn't offer a "substantive counterproposal" until 8pm Thursday and the company had delivered a "historically generous" offer that included wage hikes, COLA, more paid-time off and higher retirement contributions.

• The UAW's counteroffer "showed little movement from the union's initial demands," Ford said.
• "We are disappointed by the UAW leadership's actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments," GM said in a statement, adding that "we will continue to bargain in good faith with the union to reach an agreement as quickly as possible."

Context: The automakers want a deal that ensure they can compete with non-unionized automaker like Tesla, which already has a cost advantage over the Detroit Three.

• The UAW wants a 36% pay increase, a return to traditional pensions and retiree health care, and other concessions.
• In their latest offers, GM and Ford pitched a 20% pay increase and agreed to a return to cost-of-living adjustments (COLA), one of the UAW's demands. But the two sides were far apart on benefits as of Thursday afternoon.

Of note: President Biden spoke to both sides on Thursday to discuss the status of the negotiations. It's unclear whether he advocated for any particular outcome.

• Biden, who has a longstanding pro-union stance, stunned automakers, the UAW and industry analysts when he predicted on Labor Day that there wouldn't be a strike.

The impact: A strike at select plant could quickly become "a logistical nightmare for the Detroit Three as it relates to the supply chain because automakers will have to adjust deliveries of specific parts to their assembly plants," CFRA Research analyst Garrett Nelson said Thursday on a written analysis.

• "Not knowing which plants the UAW will target in advance could create a massive level of uncertainty and have a crippling impact on production," Nelson added.
• If it turns into a strike at all of the automakers' U.S. plants, it would cost more than $5 billion over a period of 10 days, according to the Anderson Economic Group.

Zoom in: Among the automakers' biggest concerns is that they'll fall behind on electric vehicles if a prolonged strike sets them back or leads to unaffordable contracts.

• "This is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success," Wedbush Securities analyst Dan Ives said Thursday in a research note, using the area code for Detroit.

Yes, but: But the UAW says the the Detroit Three can afford the compensation increases it's asking for after years of massive profits stemming from record-high vehicle prices and strong sales.

The bottom line: It's hard to see how this gets resolved quickly.

Go deeper: These vehicles are most affected by the UAW strike

Editor's note: This story has been updated with additional details throughout.