With a deadline looming just before midnight Thursday, the United Auto Workers union and Detroit’s three automakers remain far apart in contract talks and the union is preparing to strike.
The union is demanding a 36 per cent boost in pay, and the automakers, General Motors, Ford and Stellantis (formerly Fiat Chrysler), have countered with offers that are roughly half of that increase.
The chasm between the two sides threatens to ignite the first simultaneous strike by the United Auto Workers (UAW) against all three Detroit companies in the union’s 80-year history, a potential shock to an economy already under strain from elevated inflation. It’s also a test of President Joe Biden’s treasured assertion that he’s the most pro-union president in U.S. history.
In an online address to members late Wednesday, union President Shawn Fain said the automakers have raised initial wage offers but have rejected some of the union’s other demands.
“We do not yet have offers on the table that reflect the sacrifices and contributions our members have made to these companies,” he said. “To win, we’re likely going to have to take action. We are preparing to strike these companies in a way they’ve never seen before.”
But Ford CEO Jim Farley said Wednesday night the company has made four offers to the union without getting a “genuine counteroffer.”
“It’s hard to negotiate a contract when there’s no one to negotiate with,” he said, wondering out loud whether Fain was too busy planning strikes or events aimed at getting publicity.
Little progress has been made
The company, Farley said, has made a generous wage offer, eliminated wage tiers, restored cost-of-living pay increases and increased vacation time. The union disputes his contention that tiers were ended.
While Farley and Fain both said there’s still time to reach an agreement, there didn’t appear to be a lot of movement. Ford said at midday Thursday that it still hasn’t received a counter to its fourth offer. GM, though, said it made another offer.
Automakers contend that they need to make huge investments to develop and build electric vehicles while still building and engineering internal combustion vehicles. They say an expensive labour agreement could saddle them with costs that would force them to raise prices above their non-union foreign competitors. And they say they have made fair proposals to the union.
Fain said the final decision on which plants to strike won’t be announced until 10 p.m. Eastern time.
The labour movement in Canada marked Labour Day with many union members emboldened to organize after a summer of job action.
The union president said it is still possible that all 146,000 UAW members could walk out, but the union will begin by striking at a limited number of plants.
“If the companies continue to bargain in bad faith or continue to stall or continue to give us insulting offers, then our strike is going to continue to grow,” Fain said. He said the targeted strikes, with the threat of escalation, “will keep the companies guessing.”
Deadline Thursday 10 p.m.
If there’s no deal by the end of Thursday, union officials will not bargain on Friday and instead will join workers on picket lines, he said.
The UAW started out demanding 40 per cent raises over the life of a four-year contract, or 46 per cent when compounded annually. Initial offers from the companies fell far short of those figures. The UAW later lowered its demand to around 36 per cent.
In addition to general wage increases, the union is seeking restoration of cost-of-living pay raises, an end to varying tiers of wages for factory jobs, a 32-hour week with 40 hours of pay, the restoration of traditional defined-benefit pensions for new hires who now receive only 401(k)-style retirement plans, pension increases for retirees and other items.
On Wednesday, Fain said the companies upped their wage offers, but he still called them inadequate. Ford offered 20 per cent over 4½ years, while GM was at 18 per cent for four years and Stellantis was at 17.5 per cent. The raises barely make up for what he described as minimal raises of the past. In a 2019 agreement, the union got six per cent pay raises over four years with lump sums in some years as well as profit-sharing cheques.
Top pay for an assembly plant worker is now $32 US per hour.
All three companies’ offers on cost-of-living adjustments were deficient, Fain said, providing little or no protection against inflation.
The companies rejected pay raises for retirees who haven’t received one in over a decade, Fain said, and they are seeking concessions in annual profit-sharing cheques, which often are more than $10,000 US.
Stellantis said it gave the union a third wage-and-benefit offer and is waiting for a response.
“Our focus remains on bargaining in good faith to have a tentative agreement on the table before tomorrow’s deadline,” Tobin Williams, the company’s head of human resources in North America, said in a statement. “The future for our represented employees and their families deserves nothing less.”
GM said that it continues to bargain in good faith, making “additional strong offers.”
Farley, the Ford CEO, said that his company has made four “increasingly generous” offers since Aug. 29.
Farley said Ford has raised its wage offer, eliminated wage tiers and shortened from eight years to four years the time it would take hourly workers to reach top scale, and added more time off.
Middle ground hard to find
Thomas Kochan, a professor of work and employment at the Massachusetts Institute of Technology, said both sides are going to have to make big compromises quickly in order to settle the disputes before the Thursday deadline.
“It’ll go down to the wire, and there won’t be an agreement until the final moment, if there is one at all,” he said.
The union, he said, knows its initial proposals weren’t realistic for any of the companies, but the companies know they’re going to have to make a very expensive settlement, including addressing tiered wages for people doing the same jobs.
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