Protesters during a United Auto Workers (UAW) practice demonstration in front of the Stellantis Mack Assembly Plant in Detroit, Michigan, USA, on Wednesday, August 23, 2023.

Jeff Kowalsky | Bloomberg | Getty Images

The United Auto Workers union launched targeted strikes against the three Detroit automakers early Friday morning. The shutdowns affect three plants that produce popular models such as the Ford Bronco, Chevrolet Colorado and Jeep Wrangler.

It is the first time in history that the UAW has attacked all three Detroit automakers at the same time. Although the strikes began at the same time, they could play out very differently in the coming days – with Stellantis potentially facing a more difficult path to a deal than its rivals Ford Motor and General Motors.

Stellantis has a problem that its local competitors don’t. The company, which was created at the beginning of 2021 from a merger between Fiat Chrysler Automobiles and the French car manufacturer Peugeot, has more production capacity worldwide than it needs. Stellantis has signaled that it intends to close or sell 18 of its U.S. facilities, including factories and parts depots. The company currently has a total of approximately 35 factories and parts distribution centers in the United States.

It is unlikely that the union will voluntarily accept this plan.

It’s possible that Stellantis was preparing for a lengthy strike for this reason: The company had more vehicles in its U.S. dealer inventory than any of its downtown rivals in early September.

The automotive industry measures inventory using “daily supply,” based on the sales rate of each model over the past 30 days. As of early September, all four of Stellantis’ U.S. brands had more than 100 days’ worth of vehicles on dealer lots or in transit to dealers, according to Cox Automotive. GM’s Cadillac and Chevrolet brands only had 46 and 51 days’ worth of vehicles, respectively; The Ford brand had a value of 77 days.

The industry average was 58 days at the start of the month. In the past, Detroit automakers tended to have slightly larger inventories because their full-size pickups were offered in many different configurations.

Unlike the Stellantis strike, the UAW strike against Ford could be relatively short. Comments from UAW President Shawn Fain and Ford executives in recent days indicated that of the three automakers, Ford came closest to reaching an agreement with the union. The UAW may have recognized this when it decided to strike only a portion of the Ford assembly plant in Michigan, namely the areas where vehicles are painted and where final assembly takes place. All UAW-represented workers at the GM assembly plant in Wentzville, Missouri, and the Stellantis Jeep Wrangler plant in Toledo, Ohio resigned last night.

GM workers from the UAW Local 2250 Union strike outside the General Motors Wentzville Assembly Plant on September 15, 2023 in Wentzville, Missouri.

Michael B. Thomas | Getty Images News | Getty Images

General Motors could also be spared a longer strike. Details of GM’s latest offer released Thursday before the strike suggested that the offer was similar to Ford’s and included a 20% wage increase over the four-year contract period, more vacation days and two weeks of parental leave, among other concessions.

If Ford reaches an agreement with the UAW soon, GM could soon follow suit, using Ford’s deal as a template.

But on Friday morning, Stellantis appeared to be preparing for a long fight.

“We are extremely disappointed by the UAW leadership’s refusal to responsibly advocate for a fair settlement in the best interests of our employees, their families and our customers,” the company said in a statement following the strikes. “We are immediately placing the company in emergency mode and will make all appropriate structural decisions to protect our North American operations and the company.”

As has been usual in the past after a strike, the UAW and the automakers will take a break from negotiations on Friday. Meetings are expected to resume this weekend.

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