The United Auto Workers and Detroit’s Big Three automakers remain far apart in contract talks and the union is preparing to strike as a Thursday midnight deadline approaches.
The union has demanded a 36% wage increase, and automakers including General Motors, Ford and Stellantis (formerly Fiat Chrysler) have fought back, offering about half that amount.
The disagreement between the two sides could trigger the first simultaneous strike against Detroit’s Big Three automakers in the UAW’s 80-year history, posing a potential shock to an economy already under pressure from rising inflation and a test for President Joe Biden. Biden’s valuable assertion: He is The most pro-union president in U.S. history.
In an online address to members Wednesday night, union president Shawn Fain said the automaker had increased its initial wage offer but rejected some of the union’s other demands.
“We have yet to make an offer that reflects the sacrifice and contribution our members make to these companies,” he said. “To win, we may have to take action. We’re preparing to hit these companies in ways they’ve never seen before.”
“It’s hard to negotiate a contract when you have no one to negotiate with,” Ford CEO Jim Farley said Wednesday night, wondering aloud whether Fein was too busy planning a strike or a campaign aimed at gaining public attention.
Farley said it would not be Ford’s fault if unions strike his company because the company has made four offers but received no “real counteroffer.”
He said the company had offered generous pay packages, eliminated pay grades, reinstated cost-of-living increases and increased vacation time. Unions disputed his contention that the hierarchy was over.
“It was fully competitive with all the settlements it negotiated with the UAW, sometimes with other industrial companies after strikes. We heard nothing,” Farley said.
But Farley and Fein said there was still time to reach a deal before the deadline.
Automakers believe they need to make huge investments to develop and build electric vehicles while still building and engineering internal combustion engine vehicles. They say expensive labor deals could impose costs on them, forcing them to raise prices above those of non-union foreign rivals. They said they had made fair recommendations to the union.
Fain said a final decision on which plants to strike would not be announced until 10 p.m. ET.
The union president said a strike by all 146,000 UAW members is still possible, but the union would start with a strike at a limited number of plants.
“If these companies continue to bargain in bad faith, or continue to delay, or continue to make us insulting offers, then our strikes will continue to intensify,” Fein said. He said targeted strikes and the threat of escalation “will Keeping companies guessing.”
If a deal isn’t reached by the end of Thursday, union officials will not bargain on Friday but will join workers on the picket line, he said.
The UAW initially asked for a 40 percent raise over the four-year contract, with a 46 percent raise compounded annually. The companies’ initial offers were far below those figures. The UAW subsequently reduced its demand to about 36%.
In addition to general wage increases, the union is seeking the restoration of cost-of-living raises, an end to varying pay levels for factory jobs, a 32-hour work week, a 40-hour wage, and a return to traditional defined benefits now only available through 401(k)-style retirement plans. Pensions for new employees, increases in pensions for retirees and other items.
On Wednesday, Fein said the companies had increased wages, but he still didn’t think they were enough. Ford is offering 20 percent interest over 4.5 years, while General Motors is offering 18 percent over four years and the Stellantis is 17.5 percent. Those raises barely make up for what he said were minimal raises in the past. In a 2019 agreement, the union provided 6% pay increases over four years and one-time salary payments in certain years along with profit-sharing checks.
The maximum wage for assembly plant workers is now $32 an hour.
Fein said the cost-of-living adjustment packages offered by all three companies were flawed and provided little protection against inflation.
Fein said the companies are refusing to give raises to retirees who have not received a raise in more than a decade, and they are seeking concessions on annual profit-sharing checks, which often exceed $10,000.
Stellantis said it has made a third wage and benefit offer to the union and is awaiting a response.
“Our focus remains on bargaining in good faith to reach a preliminary agreement before tomorrow’s deadline,” Tobin Williams, the company’s head of human resources for North America, said in a statement. “The employees we represent and their families deserve a future.”
GM said it would continue to bargain in good faith and make “additional strong offers.”
Ford CEO Farley said the company has made four “increasingly generous” offers since Aug. 29.
Farley said Ford has raised wages, eliminated pay grades and shortened the time it takes hourly workers to reach top scale from eight to four years and added more breaks.
Thomas Kochan, a professor of work and employment at MIT, said both sides must make major compromises quickly to resolve the dispute before Thursday’s deadline.
“This will continue until the very last moment, and no agreement will be possible until the very last moment,” he said.
He said the union knew its original proposal was unrealistic for any of the companies, but the companies knew they would have to make very expensive settlements, including addressing graduated wages for people doing the same work.
Biden faced criticism when he urged labor organizing last year Congress to approve legislation to prevent rail workers from striking, fearing disruption to supply chains still struggling to recover from the pandemic. But unlike railroad and airline workers, the president does not have the power to order auto workers to keep working.
Nowhere is the political impact of the auto workers’ strike felt more than in Michigan, which Biden won by nearly 3 percentage points in 2020.The state further transforms During last year’s midterm electionsthe governor’s office and the Legislature are controlled by Democrats for the first time in 40 years.
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AP Airline Writer David Koenig contributed to this report in Dallas.
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