United Auto Workers VP Says Stellantis Proposal ‘Wasn’t Adequate’

The president of the United Auto Workers called economic proposals from the Big Three Detroit automakers “insulting,” a sign the union and car companies are still far apart with a strike deadline six days away.

(Bloomberg) — The president of the United Auto Workers called economic proposals from the Big Three Detroit automakers “insulting,” a sign the union and car companies are still far apart with a strike deadline six days away.

Ford Motor Co., General Motors Co. and Stellantis NV offered terms that fell far short of the union’s demands for higher compensation and better benefits, UAW President Shawn Fain said in an online address Friday, in front of a trash can labeled: “Big Three Proposals.” He exhorted the union’s 150,000 hourly workers to prepare for a walkout if a pact isn’t reached by a Sept. 14 deadline.

“We want a deal, we’re ready for a deal, but it’s got to be a deal that honors our members’ sacrifices and contributions,” Fain said. “It’s time, long past time, that we stand up.”

Fain positioned the negotiations as part of a broader stand against “rising inequality,” in which company managers and shareholders see ever-higher payouts while hourly workers struggle to keep up with inflation and benefit cuts.

While the UAW has rejected the opening economic proposals from each automaker, Fain noted negotiators are now passing offers back and forth at a rapid pace, a sign of progress after a stalemate prompted the union to file unfair labor practice charges against GM and Stellantis last month. But they have a lot of ground to cover before reaching a deal. 

The auto companies have all defended their proposals as competitive, and said they’re working in good faith to reach an agreement.

Read More: UAW Boss Seeks 46% Raise, 32-Hour Work Week in Carmaker ‘War’

Carmaker Proposals

Stellantis NV released its first economic proposal in a letter to employees Friday from Mark Stewart, the head of North American operations. 

The maker of Jeep SUVs and Ram pickups is offering a 14.5% pay raise to “most” union employees, according to the letter. It’s also offering lower-paid temporary employees a $4.22 an hour wage increase to $20 an hour, from the current starting wage of $15.78, he said. 

Hours later, Rich Boyer, vice president and head of the UAW’s Stellantis department, said the offer “wasn’t adequate.”

The UAW is a seeking a 46% wage increase, a return to traditional pensions and a 32-hour work week, all of which were rejected by the three car companies. The union also turned down Ford’s initial counter proposal, which offered a 15% raise, including bonuses. 

“We continue to negotiate with the UAW and build on our strong track record of creative solutions as our dramatically changing industry needs a skilled and competitive workforce more than ever,” Ford said in an emailed comment after Fain’s speech.

Read More: Stellantis Offers Workers a 14.5% Raise as Strike Deadline Nears

GM has proposed a total 16% pay raise for the top wage earners in its plants and a 56% hike for newer employees who make less. GM also included $11,000 in inflation protection payments, a shortened period to the top wage and better pay for temporary staff.

“Our offer has been developed considering everything in our environment including competitor offers and what is important to our team members,” a GM spokesperson said by email after Fain spoke. “We still have work to do, but we will continue to bargain in good faith.”

American depositary receipts of Stellantis rose less than 1% to $18.23 in New York Friday. GM shares jumped 1.2% and Ford rallied 2.8%. 

Boyer, the head of the UAW Stellantis department, is awaiting a second proposal from Stellantis and is still “hopeful” that the two parties can reach an agreement before the strike deadline, he said in a phone interview Friday. 

Stellantis Plant

Stellantis’ chief executive officer, Carlos Tavares, who’s transformed the historic underdog of the Detroit Three automakers into the most profitable, has provoked the union’s ire by idling an assembly plant in Illinois this spring that employed more than 1,300 people.

Boyer said he remains “optimistic” he can hammer out an agreement with Stellantis to place new product in Belvidere, Illinois. The company offered to transfer the 1,300 workers who lost their jobs as a result.

“It’s coming soon,” he said of a deal for the Illinois plant. “The minute I lock that in, which I think I will know soon, I’ll scream from the top of the heavens,” Boyer said.

Stellantis has the biggest proportion of temporary workers among the Detroit Three, a labor-cost advantage over its crosstown rivals. So-called temps account for about 12% of US hourly workers, according to people familiar with the matter, who asked not to be identified discussing non-public information. The temp rate at GM is about 10%, and about 3% at Ford Motor Co., two of the people said.

Read More: What’s at Stake as US Auto Workers Threaten to Strike: QuickTake

Boyer said UAW negotiators are pushing for a defined path for temps to be converted to full-time workers. Both Ford and GM are contractually obligated to convert employees to permanent status after a certain time period, but Stellantis is not, he said.

“We look forward to continuing our discussion with the UAW and remain committed to reaching a fair agreement by the deadline” a Stellantis spokesperson said in an emailed response to Boyer’s comments.

–With assistance from Robert Iafolla and David Welch.

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