BusinessUkraine War

General Motors and Stellantis Offer 25% Wage Increase to United Auto Workers to End Strike

In ongoing contract negotiations, General Motors (GM) and Stellantis have agreed to provide United Auto Workers (UAW) members with a 25% wage increase, matching the same offer previously made by Ford to bring an end to the six-week strike. This development comes as a positive step toward resolving the labor dispute, according to sources familiar with the discussions.

The GM proposal goes beyond the wage increase and includes provisions for cost-of-living adjustments over the course of a more than four-year contract. These details have emerged from individuals who, though knowledgeable about the negotiations, were not authorized to speak about them. A tentative agreement could be finalized late on Friday or early Saturday as the two sides continue to work on finalizing various aspects, including the treatment of temporary workers.

The offer from GM was presented around 4 a.m. on Friday, after which negotiations briefly halted at 5 a.m. and resumed at 11 a.m. GM is reportedly eager to finalize the agreement on Friday, although an official announcement may not come until Sunday when UAW President Shawn Fain plans to brief members on the specifics of the Ford deal.

Following the news, Stellantis and GM shares experienced modest increases in after-hours trading, while Ford shares, which had dropped more than 12% on Friday, showed a slight recovery in late trading. This drop was attributed to Ford’s recent decision to withdraw its profit forecast for the year due to the strike’s impact. GM shares had fallen by 4.7% on the same day, with the company having suspended its full-year guidance on October 24.

It’s important to note that any final agreements reached between the automakers and the UAW must be approved by union leadership and subsequently voted on by the company’s union members. This process may take several weeks to complete.

As negotiations continued late on Friday to finalize the remaining portions of the agreements, it was reported that UAW President Fain had left the GM meeting to attend the Stellantis negotiations.

One of the central issues in the Stellantis talks has been job security, particularly in light of the automaker’s transition to electric vehicles. Earlier this year, Stellantis had faced backlash from the union for idling an assembly plant in Belvidere, Illinois, which had previously employed 5,000 people, and for advocating the use of more lower-paid temporary workers. Stellantis has proposed reopening the Belvidere plant to manufacture a new vehicle and adding an additional battery plant. The company has also suggested the creation of a parts distribution hub similar to Amazon.com, which would absorb workers from consolidated parts facilities. However, these offers are contingent on various conditions and are not guaranteed.

Ford had previously agreed, as part of its tentative deal with the UAW, to convert temporary hires into full-time employees. Given Ford’s smaller number of temporary workers compared to GM and Stellantis, it is more feasible for Ford to provide this concession. Should GM and Stellantis decide to offer the same, it would bring their costs more in line with Ford’s, which are relatively higher.

Read More: Federal Gulf of Mexico Oil and Gas Lease Sale Delayed Amid Whale Protections Dispute

The UAW strike, which commenced on September 15, eventually encompassed more than 45,000 workers from GM, Ford, and Stellantis at eight assembly plants and 38 parts-distribution facilities across 22 states. Ford’s recent agreement with the UAW added pressure on its Detroit rivals to expedite their negotiations and return to work. Ford announced on October 26 that the work stoppage had cost the company $1.3 billion, while GM disclosed earlier in the week that its strike-related expenses had reached $800 million.

Leave a Reply

Your email address will not be published. Required fields are marked *