News/Economy/GM sweetens UAW offer to include 20% wage increase, other benefits as it tries to avoid strike


Ankur Shukla| 2023-09-15 13:53:53

KEY POINTS

  • GM offered the United Auto Workers a sweetened deal that includes 20% wage increases.
  • The union plans targeted strikes if it cannot reach labor deals with the major Detroit automakers by 11:59 p.m. ET on Thursday.

DETROIT – General Motors is attempting to avoid a looming strike by the United Auto Workers union through a new offer Thursday that includes significant pay increases, more vacation days and better benefits for retirees, among other perks.

The proposal, which GM CEO Mary Barra called “compelling and unprecedented,” addresses many of the union’s demands but continues to fall short on others, such as a 40% pay increase over the four years of the deal that UAW sought.

GM released details of the deal roughly nine hours before the UAW could initiate targeted strikes against GM, Ford Motor and Stellantis if deals are not reached by 11:59 p.m. ET on Thursday.

“We’re at a crossroads on our path to building a company that can sustain all of us for decades to come,” Barra said in a public letter. “Today, we put a compelling and unprecedented economic package on the table that reflects the significance of this critical moment.”

GM’s latest offer matches several provisions in a Ford proposal that the UAW made public last night. But it still falls short of the union’s public demands in several key respects.

The automakers were warning Thursday about the potential effects of meeting the UAW’s terms.

Ford sources said the automaker would have lost $14.4 billion over last four years if the current demands had been in effect, instead of recording nearly $30 billion in profits. UAW President Shawn Fain seems determined to achieve those terms.

The sources, who agreed to speak on the condition of anonymity due to the ongoing discussions, also pushed back on the UAW’s argument that members aren’t making a living wage. They said the average compensation under Ford’s current proposal for first-year UAW employees would be $132,000, including $92,000 in cash and $17,500 in health care coverage.

Here are the key pieces of the GM offer made Thursday:

  • Wages: A 20% increase over the four-year term of the contract, with a 10% raise in the first year. That’s up from 18% in GM’s last offer. The UAW has demanded increases of 40% over the term of the contract, which they say is in line with the pay increases seen by the Detroit automakers’ CEOs over the last several years.
  • Faster path to top pay: Under the current contract, newly-hired workers receive incremental wage increases over time, reaching top-level wages in eight years. GM’s proposal cuts that to four years. The UAW has demanded an end to the tier system.
  • Inflation protection: GM’s offer includes an unspecified level of cost-of-living protection for maximum wage earners, meaning wages will increase to – in theory, at least – keep pace with inflation. The union has demanded a return to a more generous system used in the past.
  • Job security: GM is promising not to shut down any of its U.S. manufacturing or warehousing facilities over the life of the contract.
  • Work-life balance: GM had previously proposed to recognize Juneteenth as a holiday. It’s now offering up to five weeks of vacation and two weeks of parental leave. That matches Ford’s Wednesday offer, at the time the only proposal that included parental leave. The UAW has demanded more time off, including a four-day work week.

“We are working with urgency and have proposed yet another increasingly strong offer with the goal of reaching an agreement tonight,” Barra said in the letter. “Remember: We had a strike in 2019 and nobody won.”

Key demands from the union have included 40% hourly pay increases, a reduced 32-hour workweek, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments, among other items.

Ford’s most recent proposal includes a 20% wage increase over the four-year deal; $6,500 ratification bonuses; elimination of wage tiers at two components and parts plants; a cost-of-living adjustment; halving the time to reach full pay for four years; and other benefits.

The standoff also has the attention of Washington. President Joe Biden, who has cultivated a pro-union, blue collar reputation, spoke with UAW chief Fain and leaders of the automakers, the White House told NBC News.