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A 72-hour strike by 75,000 healthcare workers against Kaiser Permanente drew to a close on Friday as both sides in the labor dispute agreed to resume stalled contract talks next week while union officials warned of possible further walkouts to come.
Acting U.S. Labor Secretary Julie Su, who played a role as mediator during an all-night negotiating session last week, will return to California to "assist the parties in advancing talks" when they return to the bargaining table next week, the Labor Department announced.
Nurses, medical technicians, and support staff at hundreds of Kaiser hospitals and clinics in California, Oregon, Washington state, Colorado, Virginia, and the District of Columbia walked off the job on Wednesday morning in the largest strike ever to hit the U.S. healthcare sector.
The labor clash has centered on workers' demands for better pay and measures to alleviate chronic staffing shortages and high turnover of personnel that union officials say has undermined patient care at Kaiser, one of the largest medical employers in the United States.
The union coalition bargaining with Kaiser said on Friday that "outsourcing of critical healthcare duties" has become another key point of contention in the dispute.
Kaiser has said its hospitals and emergency departments have remained open during the walkout, staffed by doctors, managers and "contingency workers."
The strike has pushed Kaiser to the forefront of growing labor unrest in the healthcare industry - and across the U.S. economy - driven by the erosion of workers' earning power due to inflation and pandemic-related disruptions in the labor force.
A last-ditch, marathon bargaining session in which Su sought to broker a deal on the eve of the strike failed to yield a settlement, and the talks broke off on Wednesday.
Kaiser, a leading nonprofit hospital network and managed-care organization, said then that progress had been made on some unspecified issues. But union officials countered that they were left waiting for a "meaningful response" from company executives to all their biggest demands.
After a day of little apparent communication between them, the two parties announced on Friday they had agreed to resume negotiations on Oct. 12.
The current strike was set to conclude at 6 a.m. local time on Saturday, as healthcare workers are barred by law from extending the duration of a walkout unless 10 days' advance notice is given.
UNION WARNING
However, the union coalition warned on Friday of that labor peace would be short-lived if "Kaiser executives continue to commit unfair labor practices and bargain in bad faith."
"It is possible that the coalition will issue a 10-day strike notice after Saturday, which could lead to further striking by Kaiser employees after those ten days," it said.
Kaiser's previous four-year labor contract expired on Sept. 30, after nearly six months of labor negotiations.
The union coalition has accused the company of failing to address a prolonged staffing crunch that has left employees feeling overworked and underpaid while compromising patient care.
The company has acknowledged staffing shortages plaguing the entire sector, a consequence of occupational "burnout" from the COVID-19 pandemic, leading to more than 5 million medical workers leaving their jobs.
Short staffing and high turnover were among the final sticking points left to be settled, as were union demands to limit outsourcing of jobs to vendors and third-party subcontractors.
Union officials have said pay increases were another major point of contention, while the company argued that it already led competitors in total compensation packages in every market where Kaiser operates.
Unions across the United States have grown bolder in their demands in the past two years, pressing for higher wages and better benefits in a tighter post-pandemic labor market.
Government data shows that 2023 is already the busiest year for strikes overall since 2019, with nearly 309,700 workers involved in work stoppages through August this year.
The largest number of workers previously involved in a major walkout in the healthcare sector was 53,000 in 2018, according to the U.S. Bureau of Labor Statistics,
The coalition of eight unions representing medical professionals and support staff at Kaiser insisted the company commit to hiring at least 10,000 new workers, in addition to filling some 4,000 recent vacancies.
Kaiser nationwide serves some 13 million patients and employs 68,000 nurses and 213,000 technicians, clerical workers, and administrative staff, alongside its 24,000 doctors.
The United Auto Workers held off on additional strikes against Detroit Three auto plants on Friday, citing General Motors (GM.N) unexpected willingness to allow workers at joint-venture battery plants to be covered by union contracts.
GM's concession could be critical if rivals Ford Motor (F.N) and Chrysler parent Stellantis (STLAM.MI) follow suit, potentially clearing the way for final agreements that would shore up the union's position as the industry switches to making electric vehicles.
"Our strike is working, but we’re not there yet," UAW President Shawn Fain said in a livestreamed update on negotiations with the three automakers.
Automakers have more than doubled initial wage hike offers, agreed to raise wages along with inflation, and improved pay for temps, but the union wants higher wages still, the abolishment of a two-tier wage system, and the expansion of unions to battery shops at all three companies.
Until Friday, the UAW had ratcheted up action against different automakers weekly to try to get its demands met. Threatening to strike against GM's Arlington, Texas, plant that makes cash-cow SUVs like the Cadillac Escalade spurred GM to agree that EV battery factories would become union plants with UAW contracts, Fain said.
Sales of electric vehicles are growing thanks in part to federal subsidies meant to support a U.S. transition to lower carbon emissions, and the union wants those workers to obtain the same pay and job protections granted other members.
"This is absolutely a big step for all the vehicle manufacturers to get a contract done," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. "This was the last major hurdle."
Fain did not say, however, whether workers at GM's battery plants would earn the same pay as union members at other plants.
GM is building three Ultium joint-venture battery plants with South Korea's LG Energy Solution (373220. KS). In August, Ultium said it did not see any path for workers at its Ohio plant to be covered under a national labor agreement, rejecting a push by Democratic U.S. senators.
GM is building a fourth U.S. battery plant with Samsung SDI (006400. KS) in Indiana.
"This defines the transition to EVs," said Harley Shaiken, a labor professor at the University of California, Berkeley. "Clearly, GM's concession on the master agreement will positively be matched by Ford and Stellantis."
The fate of battery plant workers was seen as a major sticking point, with Ford CEO Jim Farley on Sept. 29 saying that Fain was holding the deal "hostage" because of that aspect of the talks.
Separately, Ford said on Friday it will lay off another 495 workers in Ohio and Michigan because of the strike's impact on two of its assembly plants.
The companies up to now have resisted including the battery plants they are building under the master agreement, arguing most were joint-venture factories with other majority owners that have to sign off on such an agreement.
"GM has agreed to lay the foundation for a just transition," Fain said in his live broadcast, adding the Detroit company had "leapfrogged" the pack in negotiations with the UAW.
GM declined to confirm Fain's news, saying only that negotiations continue. "We will continue to work towards finding solutions to address outstanding issues," the company said in a statement.
LG Energy Solution declined to comment. A spokesperson for Samsung SDI said the company did not have a comment.
Stellantis' North American chief operating officer, Mark Stewart, said in a letter to employees that the automaker is making progress in the talks, "but there are gaps that still need to be closed." Ford declined to comment.
The pressure is only rising on the three automakers as EV market leader Tesla (TSLA.O) cut U.S. prices of its Model 3 sedan and Model Y SUV, intensifying its price war and further pressuring profit on all EV models that are forced to match CEO Elon Musk's aggressiveness.
Fain also said on Friday that the UAW could still strike against highly profitable pickup truck plants if progress stalls. So far, the union has avoided walking off the job at those plants.
"We know their pain points, we know their moneymakers and we know the plants they really don't want to be struck," Fain said. "And they know we've got more cards left to play."
Fain has kept automakers in suspense as to whether he would order additional plants shut down, or give an automaker a pass because they had offered concessions. So far, the union has ordered walkouts at five assembly plants at the three companies and 38 parts depots operated by GM and Stellantis.
Fain said on Friday that Ford had upped its proposed wage hike to 23% through early 2028. Combined with proposed cost-of-living adjustments, workers could receive pay increases of close to 30%, people familiar with the proposal said.
Fain's Friday video addresses have become must-see events since he launched coordinated strikes at GM, Ford, and Stellantis plants shortly after midnight on Sept. 15.
GM shares ended nearly 2% higher on Friday and Ford shares gained 0.8%. Stellantis shares in Milan ended up 1%.