WORKERS AT MACK TRUCKS JOIN UAW PICKETERS ON STRIKE
Employees vote down five-year contract agreement that was negotiated a week ago, adding to industry turmoil
Union workers at Mack Trucks went on strike Monday after voting down a five-year contract agreement that negotiators had reached with the company.
The United Auto Workers said 4,000 unionized workers walked out at 7 a.m., adding to labor turmoil in the industry that has ensnared all three big Detroit automakers.
With those workers joining picket lines, the total number of UAW members that are on strike now exceeds 30,000 across 22 states, the union said Monday.
Union President Shawn Fain said in a letter to Mack parent company Volvo Trucks that 73 percent of workers voted against the deal in results counted on Sunday.
The UAW represents Mack workers in Pennsylvania, Maryland and Florida. Union leaders had reached a tentative agreement on the deal on Oct. 1.
UAW Locals 171, 677, 1247, 2301 and 2420 in UAW Region 8 and Region 9 represent workers at Mack Trucks in Macungie and Middletown, Pa.; Hagerstown and Baltimore, Md.; and Jacksonville, Fla.
The deal negotiators had reached with Mack just over a week ago included a 19 percent pay raise over the life of the contract with 10 percent upon ratification. There also was a $3,500 ratification bonus, no increase in weekly health care contributions, increased annual lump sum payments for retirees and a $1,000 annual 401(k) lump sum to offset health care costs for employees who don’t get health insurance after retirement.
Fain said in his letter to Volvo Trucks’ head of labor relations that employees working early Monday would exit the factories after performing tasks needed to prevent damage to company equipment.
Fain wrote that UAW members and workers across the country are seeking their fair share in wages and benefits.
The company and union are still apart on work schedules, health and safety, pensions, health care, prescription drug coverage, overtime and other issues, he wrote.
The contract may have been sunk by high expectations Fain has set in bargaining with Detroit’s three automakers. In those talks, the UAW has asked for 36 percent raises over four years, while Ford has offered 23 percent and the other two companies are at 20 percent.
“I’m inspired to see UAW members at Mack Trucks holding out for a better deal, and ready to stand up and walk off the job to win it,” Fain said in a prepared statement. “The members have the final say, and it’s
especially if Iran becomes actively involved in the war.
“Market sentiment could react swiftly to the tragedy in the Middle East as far as oil prices are concerned,” said Kang Wu, an energy analyst at S&P Global Commodity Insights.
Israeli retaliation to the Hamas attacks, including an invasion of the Gaza Strip, could pull Iran and other Persian Gulf countries into the conflict. Oil traders were waiting to see if Israel would explicitly blame Iran for the weekend attacks, a sign that an escalation could be imminent. Traders are worried that Iran might then seek to interrupt oil tanker traffic in the Strait of Hormuz, the primary passage for Gulf oil to the rest of the world.
Energy prices had been slumping over the past week in part because of recent unexpectedly strong growth in the output of oil from several countries, including some in OPEC, the oil cartel. Two main reasons were that economic growth in China remained weak, keeping demand muted, and that high interest rates had spurred concerns over growth in Europe and the United States.
The average price for a gallon of regular gasoline in the United States on Monday was $3.70, 11 cents below a week ago, according to the AAA motor club. California prices average $5.80 a gallon.
But that relief for drivers is now in jeopardy following a stunning geopolitical event, much as Russia’s invasion of Ukraine sent oil and natural gas prices skyward last year.
Israel has become an increasingly important player in natural gas markets as an offshore producer. But it is not normally a factor on oil markets. The country is a net oil importer of about 300,000 barrels a day, according to S&P Commodities.
Its relations with its Arab neighbors have improved in
recent years, and the United Arab Emirates, the thirdlargest producer in OPEC, has negotiated a number of business deals with Israel since the two countries signed a peace agreement in 2020. A brutal war between Israel and Hamas could test that relationship.
“War in the Middle East can be generically bullish for crude,” said Clearview Energy Partners, an analytics firm, in a research note Sunday night, especially if the conflict is prolonged.
Global oil benchmarks rose a little over 5 percent when markets opened after the weekend, with the West Texas Intermediate oil price rising to $87 a barrel, a relatively modest jump when war is breaking out in the oilrich Middle East. By closing Monday, the U.S. price was just above $86 a barrel.
The increase followed several days when prices slumped, bottoming out near $82 a barrel, on the expectation that demand for oil was waning. The inventories of U.S. gasoline climbed last week to above the five-year average for this time of year. Only two weeks ago, many analysts were predicting a surge to $100 a barrel.
One reason oil prices had softened in recent days was growing speculation that Saudi Arabia, the United States and Israel were closing in on a political deal that could lead to an eventual
Saudi recognition of Israel. There were hopes that Saudi Arabia might increase oil output to cut gasoline prices to help the Biden administration sell any deal to the U.S. Congress.
Saudi Arabia has insisted that Israel make major concessions to the Palestinians, but the conflict is likely to complicate the chances of any deal between Israel and Saudi Arabia.
Even though American, Canadian, Brazil and Guyanese oil production has ramped up in recent years, the Persian Gulf remains a key source and transit point for nearly 1 in every 5 barrels of global oil supplies, especially to Asia. Iran is still one of the biggest oil producers in the Middle East, despite Western sanctions in recent years.
Any indications that Hamas attacked Israel following prodding, financing and planning by Iran could escalate the conflict beyond Israel’s borders.
The Biden administration has softened sanctions on Iran in recent months, in part to encourage Iran to slow its nuclear program, allowing the country to export more oil into tight global markets. But pressure is likely to grow now to tighten sanctions again, as the Biden administration provides more aid to Israel.