‘Appalled’: GM, Stellantis Dismiss United Auto Workers Claims They’re Allowing Strike Violence [Update]

Good morning! It’s Friday, September 29, 2023, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

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1st Gear: Stellantis, GM Deny Strike Violence Claims

Updated Friday, September 29, 10:55 a.m. EST – The UAW will expand the strike further to other Ford and GM plants, President Shawn Fain said Friday, according to Reuters.

United Auto Workers President Shawn Fain has reportedly accused General Motors and Stellantis of “enabling” violence on picket lines across the U.S. by hiring “scab contractors.” As you may have imagined, the automakers have strongly denied the allegations and called them misleading. From Automotive News:

In a video posted Thursday morning, Fain recounted three reports of violence and intimidation directed at striking union workers in recent days, including a hit-and-run outside a GM parts depot in Flint, Mich., that injured five people.

“These attacks on our members exercising their constitutional rights to strike and picket will not be tolerated,” Fain said. “Shame on these companies for hiring violent scabs to try to break our strike.”

Fain also said the automakers were “standing idly by” as the people inciting these incidents “injure and threaten the lives of their own employees.”

Stellantis reportedly responded by saying it hasn’t brought in any scab replacement workers. In fact, it actually accused some UAW members of disorderly conduct, and the company called on Fain to stop making “misleading and inflammatory statements.”

“We are appalled by the UAW’s characterization of the incidents occurring on the picket lines,” Stellantis said in a statement. “Since the UAW expanded its strike to our parts distribution centers last Friday, we’ve witnessed an escalation of dangerous, and even violent, behavior by UAW picketers at several of those facilities, including slashing truck tires, jumping on vehicles, following people home and hurling racial slurs at dedicated Stellantis employees who are merely crossing the picket line to do their jobs. The fact is, Stellantis has not hired any outside replacement workers, who Shawn Fain calls ‘scabs.’ Only current employees who are protecting our business and third parties making pickups and deliveries as they normally would are entering our facilities.”

The Wall Street Journal on Wednesday reported that GM has planned to use salaried workers to handle parts shipments, while Stellantis has leased a nonunion warehouse and banked 30 days of inventory for 2,500 different types of parts. The newspaper said it was unclear whether Stellantis was using the warehouse or had deployed salaried staff to help move parts.

Stellantis said it was working to quickly reach a deal with the union, and it reportedly urged everyone involved to “de-escalate our words and action,” during the strike.

In the Flint incident, Fain blamed a “nonunion contractor” for injuring the five people. Local media reports said two of the five were taken by ambulance to a hospital.

GM said in a statement that the suspected driver works for an outside housekeeping company and that the person, along with two others who were allegedly in the car, has been barred from company property.

“The health and safety of all employees is General Motors’ overriding priority,” the company said. “On Tuesday, Sept. 26 a third-party housekeeping contractor, employed by Malace, is suspected of striking five picketing employees with his vehicle while attempting to exit the Flint Processing Center after working a shift performing normal sanitation responsibilities. GM is cooperating with local authorities in their investigation.”

AutoNews reports that the company said it was conducting safety talks on all sites with active pickets “to reinforce the expectation and requirement that any employees who experience picketers blockading entry or exit to our property contact site security to help them safely proceed past the picketing employees.”

2nd Gear: Tesla Sued For Harassment Of Black Employees

A U.S. civil rights agency is suing Tesla, claiming the Austin, Texas-based automaker has tolerated severe harassment against Black employees at its gigafatory in Fremont, California. These are similar allegations to the ones brought by the state and by Tesla employees in the past.

The U.S. Equal Employment Opportunity Commission reportedly said in the lawsuit filed in federal court in California that since 2015, Black workers at Tesla’s plant have repeatedly been the subject of racist slurs and graffiti, including swastikas and nooses. From Reuters:

Tesla has failed to investigate complaints of racist conduct and has fired or otherwise retaliated against workers who reported harassment, the EEOC said in the lawsuit.

The lawsuit adds federal charges to discrimination claims by the state of California and lawsuits by Tesla employees.

It follows the breakdown of settlement talks with the EEOC after Tesla announced that the agency had formally raised its concerns last year. The EEOC routinely settles lawsuits with employers, and it is relatively rare for the agency’s cases to go to trial.

Tesla faces several other race discrimination lawsuits that make similar claims, including a class action by workers at the Fremont plant and a lawsuit by a California civil rights agency. The company in those cases has said it does not tolerate discrimination and takes workers complaints seriously.

[…]

“If the federal government gets involved, it certainly adds credibility to the claims,” said Stephen Diamond, a law professor at Santa Clara University, who noted that he has advised investors on social responsibility at Tesla.

“Major institutional investors like pension funds will be very concerned about this type of behavior,” he said.

The outlet reports that the EEOC said in the lawsuit that it began investigating Tesla after the five-member commission’s chair filed an internal complaint known as a charge against the automaker.

After finding last year that there was “reasonable cause” to believe Tesla had violated the federal law banning workplace race discrimination, the agency tried and failed to enter into a settlement agreement with the company, according to the lawsuit.

The lawsuit from the EEOC is seeking compensatory and punitive damages for an unspecified number of black workers, according to Reuters. That comes along with an order requiring Tesla to overhaul its policies and more strongly prohibit discrimination and retaliation.

3rd Gear: Tesla’s Deliveries Are Falling

It’s more bad news for Tesla! The automaker may miss estimates for its third-quarter deliveries because of planned factory shutdowns and soft demand that has led the EV maker to boost discounts.

All that being said, factory retooling could help power a stronger fourth quarter backed by refreshes to its aging lineup of vehicles, especially the Model 3. From Reuters:

They estimate Tesla will hand over between 439,200 and 455,000 vehicles in the September quarter. That is below the overall Wall Street expectation of 458,713 vehicles, according to an average of 11 analysts’ estimates compiled by LSEG.

The LSEG figure implies a 1.6% decline in deliveries from the previous quarter. That would mark the first sequential decline in Tesla’s deliveries since the second quarter of 2022.

Some analysts said a disappointing report could spark the need for more price cuts to drive sales in the face of rising competition and a broader slowdown in electric-vehicle demand.

“It’s not just supply issues, demand signals remain weak,” brokerage Guggenheim said in a note this week. “We would expect price cuts to be needed in future quarters.”

That would come at the cost of Tesla’s industry-leading margins, which already plumbed a four-year low in the second quarter due to the price war the company started in January.

In the third quarter of this year, Tesla cut prices of the Model S and X by 14 percent and 21 percent respectively. It also upped discounts on its Model 3 and Model Y by over $5,000 in the U.S.

Tesla has already reportedly cut production goals at its German plant because of soft demand.

4th Gear: GM, Unifor Contract Deadline Set

The Canadian autoworkers union Unifor said it has set a deadline to reach a tentative agreement with General Motors: October 9 at 11:59 p.m. The announcement comes just four days after Unifor members ratified a contract with Ford. From The Detroit News:

Union officials said Thursday that “bargaining committees are now focused on locking in the pattern agreement at General Motors.”

“All of the significant increases to pensions, wages, health benefits, and more must now be bargained with the company,” the statement said. “The gains negotiated in the pattern include the best wage package ever negotiated in the union’s history, as well as reducing the grow-in from 8 years to 4 years, a $10,000 productivity and quality bonus for full-time employees and a $4,000 bonus for ‘temporary part-time employees.’

[…]

Unifor’s negotiations with GM cover approximately 4,300 workers at the St. Catharines Powertrain Plant building engines for the Chevrolet Equinox and Corvette, Oshawa Assembly Complex making light- and heavy-duty Chevrolet Silverado pickup trucks and parts for other vehicles, and the Woodstock Parts Distribution Centre in Ontario.

The union reportedly said there is still “a lot of work to do,” but it has confidence that its “bargaining team is up to the challenge.”

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