General Motors said Thursday that it has given American automakers a 20% pay increase, including 10% in the first year, to avert a strike scheduled to begin at 11:59 p.m. if no deal is reached. .
The strike by the United Auto Workers union, which represents about 150,000 workers at Ford, General Motors and Stellar, will target specific automotive plants across the country. It’s the first time the union has hit Detroit’s three automakers at once, which could disrupt the economy for weeks or more. according to Anderson Economic GroupA 10-day shutdown could cause economic losses of more than $5 billion.
The battle between OEMs and automakers is taking its toll as OEMs work to transition to electric vehicles. As such, they are looking for ways to compete with the likes of Tesla, if not all together.
Auto workers worry about future job security as EVs catch on — workers say EVs require fewer people to assemble them.
Ford also He confirmed to Reuters It already offered 20% hike and other benefits. Ford told the publication he believed a strike would be more likely after receiving no objections to a request from Tuesday.
The union is demanding not just higher wages, but shorter workdays and stronger pensions — benefits that contribute billions of dollars in profits to their employers.
“I know our demands are ambitious, but I’ve told the companies over and over again, I’m not what members expect. It’s the profits of the Big Three that drive member expectations,” UAW President Sean Fain said in a statement. press release. “You can’t have a $21 billion profit in half a year and expect members to take mediocre contracts. You can’t have a quarter of a trillion dollars in profits in North America over the last decade and expect us to keep our lows and lows. The campaign slogan is simple: Record profits mean contracts.” is it.
President Joe Biden has called on both sides of the aisle to reach a deal after his administration last year passed an inflation-reduction bill that would provide a healthy boost to automakers. He predicted there would be no strike on Labor Day.
An armistice seems unlikely at this point, though.
Analysts at Evercore ISI Say there is a 90% chance of a shutdown at all three companies.
This is possible because there is still a disconnect between what the workers demand and what the automakers are willing to provide. The union’s latest proposal is a 36 percent wage increase, down from 40 percent.
Those wage increases are necessary to help workers meet a living wage, the union says. The union says many of its members work 60 to 80 hours just to make ends meet.
The union is calling for a return to traditional pensions, elimination of compensation tiers (which the unions eliminated at UPS) and reinstatement of cost-of-living adjustments.
Ford and GM Both published a list of their latest offers, but Stellantis did not.
In addition to the 20% wage increase, Ford and GM both offered some cost-of-living adjustments, increased pension contributions, more paid time off and protected health care benefits.
Fein called the offers from both automakers “insulting.”
“We’re working with urgency and we’ve made another strong offer tonight with plans to reach an agreement,” GM CEO Mary Barra told employees.
In the year In 2019, GM workers staged a national walkout at all factories. The strike lasted 42 days and GM reported a pretax loss of $3.6 billion.
The UAW points to a strike during the Great Recession of 2008, when union workers agreed to compromise on their contracts to help auto companies avoid bankruptcy. Since then, a new strike has been raging.
The strikers would hit select factories first, a tactic that Fay described as “creating confusion” that would have a domino effect, depriving other factories of parts they needed to produce vehicles. The UAW may choose to strike first at profitable truck or SUV assembly plants. Fein also did not rule out the possibility of a nationwide walkout.
The Biden administration is discussing emergency aid to protect small companies that make U.S. autos, he said. Reuters.
