Auto workers reject Detroit Three contract offers, ready to strike

By David Shepardson

(Reuters) -United Auto Workers President Shawn Fain said on Friday the union representing 146,000 workers wants a deal to avoid walkouts at the Detroit Three automakers but expects to go on strike against all of them next week if they do not improve their contract offers.

With contracts set to expire next Thursday at 11:59 p.m. ET (0359 GMT next Friday), Fain said the union had rejected General Motors (NYSE:), Ford (NYSE:) and Chrysler parent company Stellantis (NYSE:) North America and remained far apart.

“We want a deal. We are ready for a deal. But it’s got to be a deal that honors our sacrifices and contributions,” Fain said on Facebook (NASDAQ:) Live. “If we hit 11:59 p.m. on Thursday … there will be a strike at all three, if need be.”

Talks are expected to continue through the weekend.

The union’s self-described “audacious” demands include a 46% pay hike over four years including a 20% immediate wage increase, defined-benefit pensions for all workers, 32-hour work weeks and additional cost-of-living hikes.

Contract talks between the UAW and the Detroit automakers have gone to the strike deadline and beyond in years past. The pace of the negotiations has picked up since Aug. 31 when the union filed unfair labor practice complaints with U.S. labor regulators accusing GM and Stellantis of refusing to make timely economic proposals.

With a trash can labeled “Big Three Proposals” behind him, Fain said the company offers were inadequate – although he noted movement on some points. The automakers started the talks rejecting restoration of cost-of-living adjustments (COLA) pegged to inflation. Now, Ford has proposed what Fain called a “deficient” cost-of-living adjustment formula.

“Suddenly COLA is back on the table,” Fain said.

Stellantis said on Friday it offered U.S. hourly workers a 14.5% wage hike over four years but no lump sum payments.

“This is movement,” Fain said. “We went from 9% at Ford to 14.5% at Stellantis.”

But the Stellantis proposal is still “deeply inadequate,” Fain added.

The UAW said the GM and Ford offers would change the formula for calculating profit-sharing, and if it had been in effect last year GM workers would have received 29% less and Ford workers 21%.

GM said on Thursday it had offered workers a 10% wage hike and two additional 3% annual lump sum payments over four years. Stellantis is not offering additional lump sum payments.

Last week, Ford said it had offered a 9% wage increase through 2027 and 6% lump sump payments. Company officials confirmed on Friday that Ford boosted its offer to 10% in wage hikes along with the lump sum payments.

The Stellantis offer is similar to those made by GM and Ford. It would hike minimum pay for temporary workers to $20 an hour – up $4.22 an hour – and reduce the time necessary to reach top wages for permanent autoworkers from eight years to six years.

“This is a responsible and strong offer that positions us to continue providing good jobs for our employees today and in the next generation here in the U.S.,” Stellantis North America Chief Operating Officer Mark Stewart said in a letter to employees. “It also protects the company’s future ability to continue to compete globally in an industry that is rapidly transitioning to electric vehicles.”

Stellantis is offering $10,500 in inflation protection payments over the four years, while GM is offering $11,000 and Ford $12,000.

A UAW strike that shuts the Detroit Three manufacturers could cost carmakers, suppliers and workers over $5 billion, the Michigan-based Anderson Economic Group estimated.

GM recorded a $3.6 billion pre-tax loss in 2019 after UAW members went on strike for six weeks, the longest walkout against a Detroit automaker since 1970.