(L-R) Supporter Ryan Sullivan, and United Auto Staff members Chris Sanders-Stone, Casey Miner, Kennedy R. Barbee Sr. and Stephen Brown picket outside the Jeep Plant on September 18, 2023 in Toledo, Ohio.
Sarah Rice | Getty Images
DETROIT – With a deadline for expanded strikes by the United Auto Staff against the Detroit automakers closing in, the “serious progress” called for by the union seems all too elusive.
The UAW and General Motors, Ford Motor and Stellantis are all holding their ground on demands, and it appears likely the union will strike additional plants at some, if not all, of the automakers at noon Friday — because it’s promised.
While talks are ongoing, there was little movement in proposals for the reason that strikes were initiated on Sept. 15 at assembly plants in Michigan, Ohio and Missouri. Sources aware of the talks describe a “big” gap between the perimeters and say the parties are “far apart.”
Headline economic issues and advantages akin to hourly pay, retirement advantages, cost-of-living adjustments, wage progression and work-life balance remain central to the discussions. All issues play into each other and can change based on demand priorities.
Each automaker has its own unique issues, but overall the businesses wish to avoid fixed costs and what they’ve called “uncompetitive practices” akin to traditional pensions. The union, in contrast, is attempting to regain advantages lost during past talks and secure significant increases to pay and other advantages, while retaining platinum healthcare for members.
Ultimately, it’s about how much a deal will cost the businesses in total. Wall Street is currently expecting record costs, though still below the $6 billion to $8 billion in demands the union would really like, in accordance with Wells Fargo.
Here’s a general overview of where the union and corporations stand on key issues.
Wages
Union leaders have been highly transparent during collective bargaining this 12 months with the automakers; nonetheless, they’ve largely been quiet on any potential for compromise around a requirement of 40% wage increases over 4 and a half years.
Media reports indicate the union has adjusted that demand to the mid-30% range. UAW President Shawn Fain last week said the union has not made a proposal below 30%.
The automakers have countered with wage increases of around 20% over the length of the contract — what would still be a record — to a top wage of greater than $39 per hour for a majority of employees.
Sources aware of the talks say if the businesses do increase hourly wages beyond that 20% level, they’re prone to lower other advantages or reduce jobs in the long run to attempt to make up the difference.
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A Ford source said the corporate’s current proposals would offer entry-level employees starting salaries of about $60,000, potentially increasing to $100,000 or more throughout the lifetime of the deal. That features base pay, expected time beyond regulation, profit-sharing and other money bonuses.
Under GM’s latest proposal, President Mark Reuss said about 85% of current represented employees would earn a base wage of about $82,000 a 12 months. That is compared with the typical median household income of $51,821 in nine areas where GM has major assembly plants, he said.
Tiers/In-progression/Temps
Wage tiers — slicing auto employees into distinct pay ranges or classifications — are tricky, moving targets.
The businesses and union have defined “tiers” in another way during past negotiations in addition to throughout the talks this 12 months. Tiers can signify employees doing the identical job for various pay and advantages; similar but different job responsibilities; or differences between employees at assembly and components plants — depending on the talks.
The UAW union has called broadly for “equal pay for equal work.” It is a cornerstone of the group’s platform. While the automakers have historically argued for various pay based on seniority, job classification and responsibilities.
So-called “tiers” were established in 2007 as a concession by UAW to permit lower wages and advantages for employees hired after the contracts were ratified that 12 months — what became often called a “second tier.” The starting pay of those employees was roughly half that of the incumbent employees, and they’d not be eligible for a similar energetic health care advantages, pensions or retiree health care coverage.
The union has won some similar advantages back for newer employees in comparison with veteran, or “legacy,” ones but there stays different classifications of employees and pay “tiers” that quantity to “in-progression” wages, through which a employee earns more the longer they’re employed.
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For this 12 months, the automakers have largely proposed cutting an existing eight-year pay progression in half and eliminating some pay discrepancies between employees who do similar jobs akin to parts and components.
The union would really like to eliminate the in-progression pay structure entirely and have employees across the contract earning the identical wage (after a 90-day adjustment period) including temporary, or supplemental, employees.
One source aware of the talks said there is a “philosophical difference” between the perimeters. Ford, which utilizes the fewest temporary employees, has agreed to maneuver all current temps with 90 days of labor under their belt to full-time employees.
COLA/Profit-sharing
UAW suspended cost-of-living adjustments in 2009, as the businesses attempted to chop costs. COLA helps employees maintain the worth of their compensation against inflation.
The union now desires to reinstate COLA, especially following a period of decades-high inflation. However the automakers, typically, have proposed either lump-sum payments or suggested utilizing calculations based on inflation levels that the union argues would not be sufficient to offset increased costs.
Automakers have further argued that profit-sharing payments which have traditionally been based on North American profits of the businesses have assisted in offsetting inflation.
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The businesses are trying to alter or lower profit-sharing payments to offset other increased costs, while the union would really like an enhanced formula.
UAW previously outlined a calculation of providing $2 for each $1 million spent on share buybacks and increases to normal dividends.
32-hour workweek
UAW has proposed higher work-life balance, including a possible 32-hour workweek for the pay of 40 hours. The union has argued that salaried employees are allowed distant or hybrid work, allowing them to spend more time away from work with their families.
A shorter workweek has been a non-starter for the automakers, which have countered with additional vacation time, added holiday pay akin to for Juneteenth and two-week paternal leave, in some cases.
Product
For the UAW, product commitments equal jobs, meaning more members for the union.
UAW leaders are specifically concerned with vehicle production commitments at Stellantis, which has proposed closing, selling or consolidating 18 facilities. The locations included its North American headquarters, 10 parts and distribution centers and three manufacturing components facilities (two of which have already been fully or partially decommissioned).
A source aware of the talks said GM has committed product to all of its facilities, following three closures 4 years ago.
Retirement advantages and savings
The UAW has demanded a “significant” increase to pay for retired employees. The union last week said the businesses had rejected all increases to retiree pay. Nevertheless, GM CEO Mary Barra said the automaker included in its offer a lump-sum money payment of $500 for retirees.
A Ford source said the corporate’s current offer features a health care retirement bonus program with lump sums of either $50,000 or $35,000, upon retirement, based on seniority, for newer employees.
Automakers even have pushed back on returning to traditional pensions in lieu of 401(k) plans.
A proposal last week by Ford included a 6.4% contribution from the corporate and $1 per hour for each hour worked, with a previous cap removed, in accordance with an organization source.
GM also offered an unconditional 6.4% company 401(k) contribution for workers who aren’t eligible for pensions.