The United Automobile Workers union shut down production at General Motors’ largest U.S. factory on Tuesday, significantly stepping up pressure on the large U.S. automakers as signs multiplied that the six-week strike is taking a toll on profits.
The union told 5,000 workers at G.M.’s plant in Arlington, Texas, to stop working on the same day that the automaker announced a drop in its third-quarter profit and said U.A.W. work stoppages, which have also hit Ford Motor and Stellantis, had cost it $800 million so far.
The strike in Arlington continued the union’s strategy of targeting some of the carmaker’s most profitable vehicles. The Texas factory makes large sport utility vehicles including the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade.
Before the Tuesday expansion, there had been signs that the union and G.M. were close to an agreement. Some analysts said the union’s decision to raise the stakes was part of an endgame strategy to squeeze the last dollar from the company.
The U.A.W. president, Shawn Fain, “has been saying he still had some levers to pull to push the companies, and now he’s pulling them,” said Arthur Wheaton, director of labor studies at Cornell’s School of Industrial and Labor Relations. “So I think this is the union’s final push to the companies, saying, ‘Let’s get this deal done.’”
But it is also possible the companies and the union are still far from striking deals and the U.A.W. is demonstrating that it still has plenty of cards to play.
“My gut feeling is that they’re not close and this is trying to impose more cost and say, ‘Look, you guys have to get closer to what we want or we’ll keeping doing this,’” said Patricia Anderson, a professor of economics at Dartmouth College.
On Monday, the union struck a Ram pickup truck plant, the largest U.S. factory operated by Stellantis, which also owns Jeep and Chrysler. The U.A.W. has also struck Ford Motor’s largest plant, in Louisville, Ky., which produces large pickup trucks and the Lincoln Navigator S.U.V.
“Another record quarter, another record year; as we’ve said for months: record profits equal record contracts,” Mr. Fain said in a statement. “It’s time G.M. workers, and the whole working class, get their fair share.”
G.M. executives had said earlier on Tuesday that they hoped to reach a tentative agreement with the union soon. The Texas walkout dimmed those hopes.
The longer the strike lasts, the greater the risk it will become a drag on the U.S. economy, or make it harder for consumers to find the vehicles they want.
The automakers have been keen to point out the ripple effects that the strikes are having on other workers. Stellantis, the maker of Chrysler and Jeep, said on Tuesday that it laid off 525 workers at two Michigan factories, in Sterling and Warren, that make parts for Ram pickup trucks that are not needed while the assembly line is shut down by the strike.
All told, Stellantis has temporarily laid off more than 2,000 workers because of the strikes. Ford has laid off more than 3,000 workers because of the strike, according to the company. G.M. has laid off about 2,500, including about 140 at a factory in Ohio who made parts for the factory in Arlington and were let go on Tuesday. Another 3,000 workers at G.M. suppliers are temporarily out of work because of the strike, according to the company.
“We are disappointed by the escalation of this unnecessary and irresponsible strike,” G.M. said in a statement. “It is harming our team members who are sacrificing their livelihoods and having negative ripple effects on our dealers, suppliers and the communities that rely on us.”
G.M., the largest automaker based in the United States, said on Tuesday that the strike was partly to blame for a 7 percent decline in profit from a year earlier. The company reported that it earned $3.1 billion from July through September. Including the Texas factory, the strike has idled three of the company’s vehicle plants and 18 spare-parts warehouses.
Before the U.A.W. expanded the strike, G.M. said Tuesday that work stoppages had lowered its earnings before interest and taxes by about $200 million in the final weeks of the third quarter and by about $600 million since the fourth quarter started on Oct. 1. The automaker estimated that the strike could cost it $200 million a week, though that number will likely grow now that workers at the Texas plant are on strike.
“They’ve demanded a record contract — and that’s exactly what we’ve offered for weeks now: a historic contract with record wage increases, record job security and world-class health care,” the company’s chief executive, Mary T. Barra, said in a letter to investors. “It’s an offer that rewards our team members but does not put our company and their jobs at risk.”
G.M. has offered workers a 23 percent increase in pay over four years, lifting the standard wage for veteran employees to more than $40 an hour from $32; newer workers earn a lower rate. Employees working 40 hours a week at the top rate would earn about $84,000 a year, not including extra pay for overtime or profit-sharing bonuses, which have topped $10,000 in the past two years.
Ford and Stellantis have made similar offers.
The union had initially demanded raises of 40 percent, saying that more modest increases will not make up for the erosion in living standards that its members have suffered from inflation and from concessions they made in past contracts.
Mr. Fain has taken a more confrontational approach to negotiations than his predecessors. He has portrayed talks with G.M., Ford and Stellantis as the first step in a broad effort to organize workers at Tesla, Toyota, Honda and other companies which do not have unions at their U.S. factories.
In a video streamed online on Friday, Mr. Fain said that G.M., Ford and Stellantis had not yet put their best offer on the table. “Despite all the bluster about how much the companies have stretched,” he said, “there’s clearly still room to move.”
Ms. Anderson noted that Mr. Fain was newly elected, in March, and that there was a risk he could have miscalculated. “The U.A.W. president is new and not very experienced,” she said. “He may be holding out for an unrealistic settlement that just may be costly for both parties, and ending up where they could have settled today.”
Striking the automakers’ largest and most profitable plants sends a signal to union members that the U.A.W. leaders have done everything in their power to get the best deal, Mr. Wheaton of Cornell said.
“This shows the members that, ‘Look, we took out their biggest moneymakers and pushed them hard as we could,’” he said. “Then, if there is a tentative deal, they can tell the members: ‘You better ratify this. Don’t vote this down.’”
This month, nearly 4,000 U.A.W. members at Mack Trucks voted down a tentative agreement that the U.A.W. negotiated with the company, a subsidiary of Volvo Trucks, and went on strike. Union officials are now seeking to secure better terms from the company.
The calendar is probably also an important consideration. Mr. Fain and the union’s negotiators have to be careful about asking workers to go into the colder months and the holiday season with only the $500 a week in strike pay, Mr. Wheaton said.
“Walking a picket line in November in Detroit is no fun,” he said.