DETROIT — Encouraging advancements have been made in negotiations between the United Auto Workers (UAW) union and Detroit’s three major auto companies, according to a reliable source familiar with the talks.
Union Update Expected
Union President Shawn Fain is scheduled to provide an update to the union members on Friday regarding the ongoing bargaining efforts to bring an end to the nearly three-week-long strikes against the auto companies.
While it remains uncertain what specifics Fain will announce as part of the union’s targeted strike strategy, there are indications that if progress is being made in the talks, additional job actions may be avoided at certain companies. Currently, the union has limited its strike activities to approximately 25,000 workers across five vehicle assembly plants and 38 parts warehouses. In the past two weeks, Fain has announced expansions of the strike each Friday.
Ford’s Offer and Exceptions
Ford disclosed on Tuesday that it had increased its offer to the UAW on Monday night. However, the provisions made public by the company closely align with previous offers. The company’s seventh offer includes a wage increase of over 20% spread across four years (without compounding). Moreover, Ford has raised its retirement contributions for 401(k) plans and extended profit-sharing opportunities to temporary workers. Additionally, those workers are expected to receive a pay raise from $16.67 per hour to $21.
Due to its early progress in negotiations, Ford was spared from the recent round of strikes. Consequently, its parts warehouses have continued their operations. Last week, Stellantis was also exempted from the strikes when the union expanded its actions to include assembly plants at Ford in Chicago and GM in Lansing, Michigan.
Union Strike Impacting Automakers’ Profits
The ongoing union strike in the automotive industry has been carefully targeted to avoid disruptions in the production of large pickup trucks and SUVs, which contribute significantly to the automakers’ profits.
The United Auto Workers (UAW) union, which represents approximately 146,000 members across three major companies, has implemented a strategic approach to preserve their strike fund, which amounted to $825 million prior to the commencement of the strikes on September 15th. While General Motors (GM) and Ford have suspended operations for over 3,500 UAW workers at plants outside the scope of the strikes, these affected employees will receive a weekly union strike pay of $500.
The UAW’s primary contention lies in the belief that these automotive companies have generated billions of dollars in profits over the past decade while elevating CEO compensation. Consequently, the union is advocating for a substantial increase in worker wages, specifically seeking a 36% general wage increase over four years. Additionally, they are demanding the reinstatement of cost-of-living increases, a reduction in work hours from 40 to 32 hours while maintaining full pay, the restoration of traditional defined-benefit pensions for new hires, and various other benefits.
Furthermore, the UAW aims to represent workers at ten proposed joint venture electric vehicle battery factories across the United States, which have been outlined by these automotive companies.
However, the companies involved express concerns that any rise in labor costs could result in higher prices for their vehicles compared to those manufactured by Tesla or foreign automakers with factories in the US where workers are compensated comparatively less.
To mitigate the consequences of the strike, GM has recently secured a credit line of up to $6 billion. This proactive measure is motivated by their commitment to handling current uncertainties effectively. Unsurprisingly, GM estimates that the strike has incurred approximately $200 million in lost production for the company during the third quarter.
In an attempt to establish goodwill, the union has withdrawn the unfair labor practice charges filed against GM and Stellantis, accusing these companies of negotiating in bad faith prior to the strikes.