Talks between the United Auto Workers and the Detroit Three automakers resumed on Saturday, following the union’s initiation of simultaneous strikes at three auto plants, marking the most ambitious U.S. industrial labor action in decades.
The four-year labor deal between the union and General Motors (GM.N), Ford Motor (F.N), and Chrysler-parent Stellantis expired on Thursday. Stellantis has increased its offer, proposing raises of 20% over a four-and-a-half-year contract term, including an immediate 10% hike, matching proposals from GM and Ford.
Although the automakers claim that the proposals amount to a cumulative 21% increase over the period, they fall significantly short of the UAW’s demand for a 40% wage hike through 2027, which includes an immediate 20% increase.
Mark Stewart, the North American chief operating officer for Stellantis, emphasized the company’s concern and described their latest offer as “very compelling.” He stated that the offer is not driven by greed but rather by a desire to share success.
Stellantis also announced that it is offering over $1 billion in retirement security improvements and other benefit increases. However, the UAW rejected a proposal to keep an Illinois assembly plant open, which was contingent on reaching an agreement before the contract expiration. Stewart expressed the company’s willingness to discuss the future of the facility.
The strikes have resulted in the suspension of production at three plants in Michigan, Ohio, and Missouri, which manufacture popular models such as the Ford Bronco, Jeep Wrangler, and Chevrolet Colorado.
Automakers argue that they require cost-competitive contracts due to the need for significant investments in transitioning to electric vehicles (EV). However, workers point out that U.S. automakers have enjoyed substantial profits over the past decade and have increased CEO salaries by an average of 40% since 2019.
As a consequence of the strike’s impact on the facility, Ford announced the indefinite layoff of 600 workers at a Michigan plant that produces the Bronco SUV. GM informed approximately 2,000 workers at a Kansas car plant that their factory is likely to be shut down next week due to a lack of parts resulting from the strike at a Missouri plant.
Stellantis stated that it does not anticipate any other plants being disrupted by the strike at its Jeep plant in Toledo, Ohio.
UAW President Shawn Fain dismissed reports of planned layoffs as an attempt by automakers to pressure union members into accepting a weaker settlement. Fain asserted that the union will continue to organize and go the distance to achieve economic and social justice at the Big Three.
In addition to higher wages, the UAW is demanding shorter work weeks, the restoration of defined benefit pensions, stronger job security during the EV transition, and an end to “two-tier” wages. Automakers have proposed reducing the number of years required to reach top pay levels from eight to four years. The UAW claims that many key demands have been rejected by the automakers.
U.S. automakers have warned that the UAW’s demands could increase the current labor cost of around $60 per hour to over $150 per hour. GM estimated that the UAW’s wage and benefits proposals would cost the company $100 billion, while Ford CEO Jim Farley stated that a 40% wage hike would jeopardize their business.
U.S. President Joe Biden, facing re-election next year, called on the auto companies to reward workers in line with the rise in executive salaries. He urged the companies to go further in ensuring that record corporate profits translate into record contracts for workers.
Reporting by David Shepardson; Editing by Paul Simao
