Protesters during a United Auto Workers (UAW) picket outside the Stellantis Mack assembly plant in Detroit, Michigan, United States, Wednesday, August 23, 2023.
Jeff Kowalsky | Bloomberg | Getty Images
Stellantis said Saturday that its most recent proposal to the United Auto Workers included increases of nearly 21 percent over the life of the contract, including an immediate 10 percent pay increase, and ending pay levels for some workers , the latest development in a historical confrontation between Detroit’s Big Three automakers and the union.
The proposal from the manufacturer Jeep, which is in line with the proposals of Ford And General engineswould also continue to offer profit sharing to workers, according to new offer details released by the company on Saturday.
“The teams have been very, very careful to listen to us, very careful to come up with the best possible deals that also protect … the business,” COO Mark Stewart said on a Saturday call with reporters.
The standoff between the UAW and major automakers Stellantis, Ford and General Motors came to a head Friday, with the union start of work stoppages after an agreement was not met by a Thursday evening deadline. The so-called mobilization strike began with walkouts at three key factories – one for each automaker – with the possibility that the UAW could call on more of its members to join the strike if necessary.
The union is demanding, among other things, hourly wage increases of 40%, a work week reduced to 32 hours, a return to traditional pensions, the elimination of pay levels and the reinstatement of cost-of-living adjustments. The UAW did not immediately respond to a request for comment on the proposal.
Meanwhile, Ford and GM resumed negotiations on Saturday after no discussions took place between the union and any of the automakers the day before. Stellantis said it plans to resume negotiations on Monday.
UAW President Shawn Fain said earlier this week that Stellantis had previously proposed a 17.5% increase.
Under the new proposal, starting pay for additional employees would increase by $4.22, or nearly 27 percent, to $20 an hour.
The company also announced it would cut the timeline for progression up the hourly wage scale in half to four years, meaning all full-time hourly employees would reach the top before the contract expires. Under the offer, the wage system would be eliminated entirely for its Mopar division, known for its service, parts and customer interface.
Stellantis also proposed an inflation protection measure as part of the compensation. The company said it has committed more than $1 billion to improve pension and retirement savings plans for current employees and retirees.
Stellantis management also objected to the union’s descriptions of the automaker’s plans to close or sell 18 facilities. The company said it aims to manage its parts distribution centers more efficiently and continue to shift its resources toward electric vehicles. Jobs in these factories will be maintained, the company said.
The automaker also emphasized its commitment to negotiating and reaching a financially feasible agreement, echoing concerns raised by Ford and GM executives. Ford CEO Jim Farley said in a Interview with CNBC On Friday, the UAW’s demands would force the company to “choose bankruptcy over supporting our workers.” Stellantis management has stressed that the company must remain competitive with automakers that do not have unionized employees.
“It’s not about war, it’s about win-win,” Stewart said. “It’s about us finding something that is great for our citizens today, capable of keeping a future for tomorrow… so that our company is able to continue the investment path that we have for the “electrification, and that our operations in the United States are strong so that we can be competitive against the transplants and we can compete with the new entrants.”
President Joe Biden said Friday that businesses should improve their current offerings to ensure a strong contract is concluded in the midst of a period of record profits.
— CNBC’s Michael Wayland contributed to this report.
