Michigan: The United Auto Workers union wants to emerge from its strike against Detroit’s three major automakers with at least a 30 per cent pay raise, according to people familiar with the matter.
That’s the level - which is lower than the around 40 per cent hike it initially proposed to Ford Motor, General Motors and Stellantis - that the union believes will allow it to satisfy existing members and organize non-union plants. It takes into account a cost-of-living allowance, or COLA, and a general wage increase, according to the people, who asked not to be named because the talks are private.
Automaker stocks were buoyed by the news. GM and Stellantis’ US shares each gained 2.5 per cent on Thursday, while Ford rose 1.4 per cent. GM and Ford have seen steep declines since July amid uncertainty about the negotiations. Stellantis is the outlier, up 36 per cent so far this year.
A wage bump of at least 30 per cent is expected to generate interest from non-unionized auto workers and help grow the union’s membership, according to the people.
The union’s president, Shawn Fain, is on a mission to expand the UAW by organizing future electric-vehicle battery plants and by targeting workers at Tesla and the US plants of Asian and European automakers, two people said. Its membership has fallen to 400,000 from more than 1 million in the 1970s.
A UAW spokesperson declined to comment. GM, Ford and Stellantis also declined to comment.
Ford has already offered a 20 per cent pay increase, plus COLA payments on top of it. The UAW also had lowered its demand for pay raises to 36 per cent. If the COLA formula gives workers additional raises, it represents a smaller gap between the two sides on pay. A UAW source said the union submitted a counterproposal to Stellantis on Thursday.
The wage increase is part of a complex puzzle that also includes how much the automakers will invest in their factories to secure jobs for the UAW. Other issues include compensation for workers at future battery plants and retiree benefits, including the union’s demand for a return to traditional pensions. Each piece has to be agreeable to all parties or the deal will fall apart.
The UAW has been striking the automakers since September 15, the first time it has targeted all three simultaneously. Fain is threatening to widen the strike on Friday if the companies don’t show progress at the bargaining table.
Fain already had workers walk out at 38 GM and Stellantis parts distribution facilities last week, saying that there was too little progress in talks.
