Nearly 146,000 workers at US manufacturing companies have threatened to strike this week if General Motors, Ford and Stellantis reject their demands for sharp wage increases and the restoration of benefits they have given up. years ago, when companies had financial problems.
The talks were led by Shawn Fain, the embattled president of the UAW union, which stands for the United Auto Workers, who threatened to stop work at one or all three companies if the deadlines expire on Thursday at 11:59 pm (Eastern time). contract without new agreements.
Talks have been ongoing since last week and reports point to some progress. However, it is not guaranteed that these improvements will be enough to avoid work stoppages by labor unions in factories in many states. A strike, even at one or more plants, could cause massive disruptions to the country’s car production.
What are the workers’ demands focused on and at what point are the conversations going?
We explain it below:
46% pay rise and 32-hour work week: key points for the UAW
The union is asking for a wage increase of 46%, gradually over four years. That means higher-paid workers in manufacturing plants will earn $47 an hour, up from the current $32. In addition to that, the union wants to eliminate pay scales for jobs done in factories.
It also calls for a 32-hour work week instead of the usual 40 and for the restoration of traditional retirement benefits for new employees: companies currently offer 401(k) plans. retirement plan instead of defined pension plans. which he had previously given.
Another important point for the UAW union is to have representation in a dozen electric battery factories, most of which are in the hands of joint ventures between automakers and South Korean companies.
The union wants workers at those plants to receive the highest wages the UAW has achieved, in part because those currently working on combustion engines need a place to work as the industry moves toward in electric vehicles.
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What are the current wages and benefits for UAW workers?
Unionized UAW workers hired after 2007 are not part of defined pension plans and their health benefits are less generous.
For the past several years, the UAW has agreed that workers should not receive wage increases or cost-of-living adjustments to help companies control their costs.
A worker on the top pay scale in an assembly plant earns $32.32 an hour, and temporary workers start at just under $17. However, full-time workers received profit-sharing checks of $9,716 at Ford and $14,760 at Stellantis this year.
Fain himself acknowledged that the union’s demands were “bold,” but said the automakers would be able to afford the wage increases and take back concessions made to workers since the 2007-2009 financial crisis.
What companies are proposing UAW workers
Ford’s offer called for a gradual 10% salary increase over the four-year contract, along with several one-time payments, including one of $6,000 to cover inflation increases.
GM offers the same percentage and multiple one-time payments as Ford. Stellantis (formerly Fiat Chrysler) is offering a 14.5% increase over four years, but without the one-time payments that GM and Ford will provide. Stellantis proposed the payments to cover rising inflation.
All three companies also offer bonuses, but reject the 32-hour work week required by the UAW.
Where is the negotiation?
This Monday, Stellantis reported on the progress of the UAW talks. North American human resources chief Tobin Williams said in an email to employees that the union submitted a counter offer to the financial offer on Sunday. He did not give details, but added that the two sides have reached agreements on health and safety issues.
This after, on Friday, Fain, the head of the UAW, classified the proposals from Stellantis, GM and Ford as insufficient. This Monday, Fain said in a statement that the three companies waited until the last minute to make their financial offers. “When CEOs are ready to make serious offers, we’ll be here,” he wrote.
What is the effect of a strike on car prices?
The effect will be final.
All three automakers are continuing to operate their factories to accumulate inventories at dealerships. At the end of August they collectively have enough cars for 70 days. After that they will face problems with their supplies.
Auto inventories are at lower levels than before the pandemic, due to problems with chip supplies in the past.
Sam Fiorani, an analyst at consulting firm AutoForecast Solutions, said automakers had about 1.96 million vehicles available at the end of July. Before the pandemic, that number was up to 4 million.
“A strike of three weeks or more will quickly deplete supplies, raise prices and push sales to non-union brands,” he said.