The United Auto Workers union on Friday rejected wage and benefit proposals from Detroit’s Big Three automakers, raising tensions just six days before a deadline for 146,000 workers to strike.
Union President Shawn Fain told workers on Facebook Live that he was throwing the proposals from Ford, General Motors and Stellantis into the wastebasket.
“Automakers have yet to provide our members with fair contracts,” he said.
Negotiations continued through the weekend, but Fein warned that if no agreement was reached by 11:59 p.m. Thursday, “strike action will be held at all three plants, if necessary.”
Stellantis, formerly Fiat Chrysler, made its first counteroffer to the union’s demands on Friday, with a higher wage increase than Ford and General Motors had offered. Stellantis proposed annual salary increases totaling 14.5% in the new four-year contract.
Ford is increasing pay increases from 9% to 10% over four years but also includes a one-time payment, while GM is offering 10% plus a one-time payment. All three companies offer additional one-time payments to account for inflation.
Stellantis North America Chief Operating Officer Mark Stewart said in a letter to employees that the wage increases will apply to most workers.
Stellantis’ proposal also includes a one-time inflation protection payment of $6,000 in the first year of the contract and $4,500 in the final three years of the contract.
In addition, the counteroffer would increase hourly wages for temporary workers from $15.78 to $20 and speed up the time it takes for employees to advance from starting salary to pay grade from eight to six years.
Stellantis is formed by the merger of Fiat Chrysler and France’s Peugeot Citroën in 2021. The proposal is closer to the union’s demand for an overall increase of 46% within four years, but there is still a large gap between the two sides.
“We remain committed to negotiating in good faith and reaching a fair agreement before the deadline,” Stewart said. “With this fair offer, we are seeking to resolve our discussions in a timely manner.”
A strike against the Big Three automakers could cause damage not only to the entire industry, but also to the Midwest and even the national economy, depending on how long the strike lasts. The automobile industry accounts for approximately 3% of the national economy. A prolonged strike could also ultimately lead to higher vehicle prices and shift sales primarily to Asian automakers with factories in the United States.
Automakers say they need to invest in developing and manufacturing electric vehicles while launching new internal combustion engine vehicles. They said the large settlement with the union would impose high costs on them and force them to charge more for their vehicles than rivals.
Fein said automakers can afford to raise wages to make up for inflation and previous concessions because they make billions in profits and pay their CEOs millions in compensation. He blamed rising car prices on corporate greed.
The union’s demands include a 46% across-the-board pay increase, a 32-hour work week, a 40-hour pay increase, the restoration of traditional pensions for new employees, union representation for workers at new battery plants and the restoration of traditional pensions. Top UAW assembly plant workers earn about $32 an hour, plus an annual profit-sharing check.
The union called Ford and GM’s proposals “shameful and insulting” while calling Strantis’s pay offer “woefully inadequate.”
Fein said the companies are refusing to give raises to retirees who haven’t had them in at least a decade. To combat inflation, Ford offered what he said were woefully inadequate cost-of-living wages, while GM and Stellantis offered one-time payments. All companies have retained pay scales for factory workers but lowered the number of years needed to earn full wages, he said.
“I want all of you to be ready,” he said of Thursday’s deadline. “Be prepared to stand up for yourself, your family and your community.”