Demonstrators during a United Auto Staff (UAW) practice picket outside the Stellantis Mack Assembly Plant in Detroit, Michigan, US, on Wednesday, Aug. 23, 2023.
Jeff Kowalsky | Bloomberg | Getty Images
Stellantis on Friday offered significant four-year wage increases to its hourly employees represented by the United Auto Staff, because it scrambles to avoid a costly strike.
The automaker’s offer would offer a 14.5% wage increase over the four-year term of the proposed deal for many of Stellantis’s roughly 43,000 UAW-represented hourly employees. Newer, or in-progression, employees would get a 27% boost to their starting wages and a shorter time period — six years, versus eight years under the present deal — to advance to the utmost wage rate.
The present contracts between the UAW and the three Detroit automakers will expire at 11:59 p.m. on Thursday. Union leaders have threatened strikes if no deal is in place by that point. The UAW has never in its history called major strikes concurrently against all three firms.
Stellantis’s offer also provides its UAW-represented employees with a $6,000 one-time “inflation protection payment” in the primary 12 months of the deal, and a complete of $4,500 in additional payments over the next three years.
As well as, the proposal would make Juneteenth a paid holiday for employees covered by the deal.
“It is a responsible and powerful offer that positions us to proceed providing good jobs for our employees today and in the subsequent generation here within the U.S.,” said Mark Stewart, chief operating officer of Stellantis’s North America unit. “It also protects the Company’s future ability to proceed to compete globally in an industry that’s rapidly transitioning to electric vehicles.”
UAW Vice President Wealthy Boyer told CNBC that negotiations are ongoing and can proceed in hopes of getting a deal before the deadline. If no agreement is reached, the union will take appropriate motion, he said.
The proposed wage increase is larger than those offered to the union by rivals General Motors and Ford Motor, which offered raises of 10% and 9%, respectively. The 2 firms also recommend additional ratification bonuses that Stellantis didn’t offer.
However the proposed deal still falls well in need of the union’s demands, which include a 40% hourly pay increase, a 32-hour workweek, and restoration of traditional-style pension plans, amongst other items. Only about 30% of Stellantis’s UAW-represented employees — those hired before October 2007 — currently have pension plans.
UAW President Shawn Fain dismissed the offers from each GM and Ford as insufficient. He called GM’s offer, presented on Thursday, “an insulting proposal that does not come near an equitable agreement for America’s autoworkers.”
UAW members voted overwhelmingly last month to grant union leaders the authority to call strikes if warranted.
— CNBC’s Michael Wayland contributed to this story.
