UAW calls Stellantis contract offer ‘trash’

By David Shepardson

(Reuters) -United Auto Workers (UAW) union President Shawn Fain angrily tossed contract proposals from Stellantis in a trash can on Tuesday, citing numerous concessions that the Chrysler parent is seeking in labor talks.

“Stellantis proposals are a slap in the face,” Fain said during an online chat, disclosing the company is proposing cuts to health-care coverage, fewer vacation days for new hires, employer cuts to 401(k) contributions, and lifting a cap on the number of temporary employees. “Management has chosen to spit in our faces.”

During the chat Fain tossed a copy of the Stellantis proposal in a waste basket. “That’s where it belongs – in the trash – because that’s what it is,” he said.

The July 27 company document seen by Reuters makes many proposals aimed at reducing absenteeism, which the automaker said cost it more than 16,000 vehicles of lost production, or $217 million in lost revenue.

Stellantis also seeks to cut pension, health-care and other costs, saying that amid government electric vehicle rules, it “is imperative we find ways to reduce the overall fixed cost structure of our business.”

Stellantis said the cumulative increase in employee health-care costs over the next four years is expected to be $613 million.

The UAW also said the company opposes an end to two-tier wages, a practice of newer hires getting paid much less than veteran workers.

Fain cited an Aug. 1 statement Stellantis made to Reuters that the automaker is “not seeking a concessionary agreement.”

Stellantis did not comment.

The UAW is seeking pay raises of more than 40% over four years, significant additional time off, and a restoration of defined-benefit pensions previously eliminated for newer workers.

Stellantis’ proposal said it wants to “minimize pension costs,” which are approximately $1 billion annually.

The current four-year contracts with Stellantis, General Motors and Ford Motor expire on Sept. 14. Fain warned Tuesday: “The clock is ticking – time to get down to business.”

Two people briefed on the matter told Reuters that automakers have estimated the UAW’s contract demands could raise the current mid-$60-per-hour labor rate to more than $150 per hour.

The UAW is also seeking to make all temporary workers at U.S. automakers permanent, add a substantial increase in paid time off, and restore retiree health-care benefits and cost-of-living adjustments. The union also wants new limits on temporary workers.

(Reporting by David ShepardsonEditing by Bernadette Baum, Marguerita Choy and Leslie Adler)