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  • Writer's pictureThe San Juan Daily Star

Automakers and UAW remain far apart as contract deadline nears

United Auto Workers members marching in a Labor Day Parade in Detroit. The theme of this year’s parade was “Labor United Stronger Than Ever!”

By Neal E. Boudette

The United Auto Workers union and the three established U.S. automakers remain far apart on wages and other issues with just a few days to go before contracts covering 150,000 union workers expire.

So far, the companies — General Motors, Ford Motor and Stellantis, the parent of Chrysler — have offered to raise pay by 14% to 16% over four years. Their offers include lump-sum payments to help ease the effect of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about one-third less than veteran union members.

But the union’s combative new president, Shawn Fain, has dismissed the offers as “insulting,” noting that the three manufacturers have been making near-record profits for almost a decade and that pay packages of top executives have increased substantially. He has been seeking pay increases of about 40% and repeatedly warned that workers were ready to leave assembly lines when the current collective bargaining agreements with the automakers expire Thursday.

Fain has said the union is willing to strike at all three automakers simultaneously, a step it has never taken before. An across-the-board stoppage would deal a big blow to the economies of Michigan and other states.

“We aren’t going to stand by and allow them to drag out the negotiations like they’ve done in the past,” Fain said Friday in a video on Facebook. “If we hit 11:59 on Thursday without a deal at any of the Big Three automakers, there will be a strike — at all three if need be.”

The talks are taking place during a sweeping shift from combustion engine cars and trucks to electric vehicles, which require fewer parts and less labor to produce. UAW leaders and members are increasingly worried that the transition will eliminate jobs and, over time, reduce wages and benefits.

The automakers are also worried about the transition. GM, Ford and Stellantis are spending tens of billions of dollars to build new factories and scour the world for battery raw materials like lithium. Company executives have argued that offering the UAW members big raises could leave them at a significant cost disadvantage to Tesla, which dominates the U.S. electric car market and employs nonunion workers.

The auto industry is the largest U.S. manufacturing sector and accounts for about 3% of the nation’s economic output. The three Detroit automakers operate dozens of plants that make about 500,000 cars a month.

The Anderson Economic Group, a research firm in East Lansing, Michigan, estimated that a 10-day strike against the three companies would reduce the companies’ profits by $1 billion and wages by $900 million for UAW members and workers employed by other companies that depend on the automakers.

Aside from wages, the union and the companies remain far apart on several other matters, including measures to preserve jobs and discourage the closing of U.S. plants, increases in retirement benefits and cost-of-living adjustments, which were once standard in UAW contracts.

The union has made some progress in its discussions with Ford. In response to Fain’s demands, the automaker offered to increase wages by about 15%, through a 9% increase in base wages and one-time lump-sum payments of $11,000 per worker. While Fain rejected that, the two sides have continued bargaining. He was scheduled to update UAW members later Friday about Ford’s latest offer.

Talks with GM and Stellantis have proceeded more slowly. The UAW filed a complaint last week with the National Labor Relations Board, saying the two manufacturers had refused to offer proposals in response to the union’s demands and were not negotiating in good faith.

GM responded by offering a combination of base wage increases and lump-sum payments that would lift worker pay by about 16%. “We have already said we want to reward and recognize our employees with wage increases,” Gerald Johnson, GM’s executive vice president for global manufacturing, said last week.

Agreeing to all of the union’s demands would threaten GM’s ability to compete, he added.

Fain said the wage offer didn’t go far enough to make up for the effect of inflation on workers’ take-home pay over the last decade and was too little in light of the profits GM was making. The automaker reported profits of $7 billion in the first half of the year. Fain also complained that GM had rejected the union’s proposals on job security, retiree pay, cost-of-living adjustments and other issues.

Stellantis submitted its proposal to the union Friday morning, offering a 14.5% rise in base wages with no lump-sum payments.

“This is a responsible and strong offer that positions us to continue providing good jobs to our employees,” Mark Stewart, chief operating officer of Stellantis’ North American operations, said in a statement. “With this offer, we are seeking a timely resolution to our discussions.”

Stellantis, which is based in Amsterdam and was created by the merger of Fiat Chrysler and Peugeot in 2021, earned 11 billion euros ($12 billion) in the first half of the year, a record.

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