General Motors CEO Mary Barra talks with reporters following a gathering with lawmakers from Michigan and Ohio on the U.S. Capitol June 05, 2019 in Washington, DC.
Chip Somodevilla | Getty Images
DETROIT – General Motors is attempting to avoid a looming strike by the United Auto Employees union through a recent offer Thursday that features significant pay increases, more vacation days and higher advantages for retirees, amongst other perks.
The proposal, which GM CEO Mary Barra called “compelling and unprecedented,” addresses lots of the union’s demands but continues to fall short on others, resembling a 40% pay increase over the 4 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 should not reached by 11:59 p.m. ET on Thursday.
“We’re at a crossroads on our path to constructing an organization that may sustain all of us for many years to come back,” Barra said in a public letter. “Today, we put a compelling and unprecedented economic package on the table that reflects the importance of this critical moment.”
GM’s latest offer matches several provisions in a Ford proposal that the UAW made public last night. However it still falls in need of the union’s public demands in several key respects.
The automakers were warning Thursday concerning the potential effects of meeting the UAW’s terms.
Ford sources said the automaker would have lost $14.4 billion over last 4 years if the present demands had been in effect, as a substitute of recording nearly $30 billion in profits. UAW President Shawn Fain seems determined to realize those terms.
The sources, who agreed to talk on the condition of anonymity on account of the continued discussions, also pushed back on the UAW’s argument that members aren’t making a living wage. They said the common compensation under Ford’s current proposal for first-year UAW employees can be $132,000, including $92,000 in money and $17,500 in health care coverage.
Listed below are the important thing pieces of the GM offer made Thursday:
- Wages: A 20% increase over the four-year term of the contract, with a ten% raise in the primary 12 months. That is up from 18% in GM’s last offer. The UAW has demanded increases of 40% over the term of the contract, which they are saying is in keeping with the pay increases seen by the Detroit automakers’ CEOs over the past several years.
- Faster path to top pay: Under the present contract, newly-hired employees receive incremental wage increases over time, reaching top-level wages in eight years. GM’s proposal cuts that to 4 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 max wage earners, meaning wages will increase to – in theory, not less than – keep pace with inflation. The union has demanded a return to a more generous system used previously.
- Job security: GM is promising to not shut down any of its U.S. manufacturing or warehousing facilities over the lifetime of the contract.
- Work-life balance: GM had previously proposed to acknowledge Juneteenth as a vacation. It’s now offering as much as five weeks of vacation and two weeks of parental leave. That matches Ford’s Wednesday offer, on the time the one proposal that included parental leave. The UAW has demanded more day without work, including a four-day work week.
“We’re working with urgency and have proposed one more increasingly strong offer with the goal of reaching an agreement tonight,” Barra said within the letter. “Remember: We had a strike in 2019 and no one 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, amongst other items.
Ford’s most up-to-date proposal features 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 achieve full pay for 4 years; and other advantages.
This can be a developing story. Please check back for extra details.
