DETROIT – US automakers and union negotiators offered little hope a deal would be reached on Thursday to avoid a midnight walk-off that would be the United Auto Workers’ (UAW) first-ever simultaneous strike against the Detroit Three carmakers.

The UAW on Wednesday outlined plans for a series of strikes targeting individual, undisclosed US auto plants if agreements are not reached by 11.59pm EDT on Thursday (11.59am on Friday in Singapore), rather than a full walkout.

“To win, we’re likely going to have to take action,” UAW president Shawn Mr Fain said on Wednesday.

Mr Fain said the Detroit Three offered 146,000 US auto workers pay raises of as much as 20 per cent over 4-1/2 years. But he blasted the proposal as inadequate, even as automakers protested that the union had yet to formally respond to their latest more generous offers.

The union is asking for 40 per cent raises and major improvements in benefits.

Mr Fain outlined a strategy to “create confusion” with a series of work stoppages targeting individual US plants if no deal is reached.

Stopping work at a key engine or transmission plant, for example, could have a cascading effect by depriving other factories of parts they need to produce vehicles.

Another option would be to strike profitable pickup truck or SUV assembly plants.

Consequences

Coordinated strikes would represent arguably the most ambitious US labour action in decades and could impact US economic growth, depending on how long they last.

Mr Fain said it was still possible that at a later date all of the auto workers could strike.

A full strike would hit earnings at each affected automaker by about US$400 million (S$544 million) to US$500 million per week, assuming all production was lost, Deutsche Bank has estimated.

Some losses could be recouped by boosting production schedules after a strike, but that possibility fades as a strike extends to weeks or months.

US President Joe Biden has encouraged the parties to stay at the table “to get a win-win agreement that keeps UAW workers at the heart of our auto future”, White House economic adviser Jared Bernstein said on Wednesday.

A prolonged strike could pose political problems for Mr Biden.

Ford Motor has proposed a 20 per cent hike in pay over the contract term; General Motors, 18 per cent; and Chrysler parent Stellantis, 17.5 per cent. Mr Fain said that is less than half the pay hikes the union has sought, but higher than the companies’ initial offers.

GM and Stellantis said they received responses to their latest offers, while Ford said during bargaining it had “not received any genuine counteroffers from the union”.

GM said it continues “to bargain directly and in good faith with the UAW”.

Ford warned of a grim scenario. “The future of our industry is at stake. Let’s do everything we can to avert a disastrous outcome,” it said.

The union’s demands include restoring defined benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes, as well as job security guarantees and an end to the use of temporary workers.

Mr Fain said automakers rejected the pension, 32-hour work week and other benefit improvements sought. He also criticised proposed changes to profit sharing that would cut payments to workers.

The UAW said it was planning a rally in Detroit on Friday that will include Mr Fain, Senator Bernie Sanders and other members of Congress, coinciding with the first day of expected walkouts. REUTERS