Auto union rejects wage offers from Detroit companies with strike deadline 6 days away

By MICHELLE CHAPMAN and TOM KRISHER
AP Business Writers

DETROIT (AP) — The United Auto Workers union on Friday rejected wage and benefit offers from all three Detroit automakers, raising tensions just six days before a strike deadline for 146,000 employees.

Union President Shawn Fain told workers in a Facebook Live appearance that he filed proposals from Ford, General Motors and Stellantis in a wastebasket.

“The automakers have yet to offer our members a fair contract,” he said.

Negotiations are continuing through the weekend, but Fain warned that if there aren’t agreements by 11:59 p.m. Thursday “there will be a strike at all three if need be.”

On Friday, Stellantis, formerly Fiat Chrysler, made its first counteroffer to the union’s demands with a bigger pay raise than offers from Ford and General Motors. Stellantis offered wage increases in each year of a new four-year contract totaling 14.5%.

Ford increased its offer from 9% to 10% raises over four years, but it also included lump sum payments, while GM’s offered 10% plus lump sums. All three companies offered additional lump sum payments to cover inflation.

The wage increases would be for most workers, said Mark Stewart, chief operating officer of Stellantis North America, said in a letter to employees.

The proposal by Stellantis also includes a $6,000 one-time inflation protection payment in the first year of the contract and $4,500 in inflation protection payments over the final three years of the contract.

In addition, the counteroffer includes boosting hourly wages from $15.78 to $20 for temporary workers and speeding up the progression timeline from eight years to six years for employees who are moving through the pay scale from starting wages.

The proposal from Stellantis, which was formed in a 2021 merger of Fiat Chrysler and France’s PSA Peugeot, is closer to the union’s demands of 46% across-the-board increases over four years, but both sides still are far apart.

“We remain committed to bargaining in good faith and reaching a fair agreement by the deadline,” Stewart said. “With this equitable offer, we are seeking a timely resolution to our discussions.”

A strike against all three major automakers could cause damage not only to the industry as a whole but also to the Midwest and even national economy, depending on how long it lasts. The auto industry accounts for about 3% of the nation’s economic output. A prolonged strike could also lead eventually to higher vehicle prices, and shift sales largely to Asian automakers with U.S. factories.

Automakers say they need to make investments to develop and build electric vehicles, while at the same time putting out new internal combustion vehicles. They say that a big settlement with the union would saddle them with high costs and force them to charge more for vehicles than competitors.

Fain says automakers can afford raises to make up for inflation and previous concessions because they’re making billions in profits and paying millions to CEOs. He blames auto price increases on corporate greed.

The union’s demands include 46% across-the-board pay raises, a 32-hour week with 40 hours of pay, restoration of traditional pensions for new hires, union representation of workers at new battery plants and a restoration of traditional pensions. Top-scale UAW assembly plant workers make about $32 an hour, plus annual profit sharing checks.

The union called proposals from Ford and GM “shameful and insulting,” while it labeled Stellantis’ pay offer “deeply inadequate.”

Fain said the companies rejected raises for retirees who have gone without them for at least a decade. To handle inflation, Ford offered cost of living pay that he called severely deficient, while GM and Stellantis offered lump sums. All companies kept tiers of wages for factory workers but lowered the number of years needed to reach full pay, he said.

“I want all of you to be ready,” he said of Thursday’s deadline. “Be ready to stand up for yourselves, your families and for your communities.”