DETROIT – General Motors secured a new $6 billion line of credit as the automaker braces for additional strikes by the United Auto Workers union.
“The facility that we announced today is a $6 billion line of credit that I think is prudent in light of some of the messages that we’ve seen from some of the UAW leadership that they intend to drag this on for months,” CFO Paul Jacobson told CNBC’s Phil LeBeau in an interview on “Halftime Report.”
The targeted strikes already cost the automaker $200 million during the third quarter, GM said Wednesday.
A GM spokesman said the $200 million strike cost is due to lost production on wholesale volume, largely due to the UAW’s initial Sept. 15 strike at GM’s midsize truck and full-size van plant in Wentzville, Missouri. The strike has since expanded to GM’s parts and distribution facilities nationwide and, as of last Friday, a crossover plant in mid-Michigan.
As a result of the strike in Missouri, GM also idled its Fairfax Assembly Plant in Kansas, where it builds the Cadillac XT4 SUV and the Chevrolet Malibu sedan, and laid off nearly 2,000 workers.
Both GM CEO Mary Barra as well as Ford Motor CEO Jim Farley have publicly criticized UAW President Shawn Fain and the union’s strike strategy, claiming Fain is not actually interested in reaching deals for 146,000 workers with GM, Ford and Chrysler parent Stellantis.
Members of the United Auto Workers (UAW) Local 230 and their supporters walk the picket line in front of the Chrysler Corporate Parts Division in Ontario, California, on September 26, 2023, to show solidarity for the “Big Three” autoworkers currently on strike.
Patrick T. Fallon | AFP | Getty Images
“It’s clear that there is no real intent to get to an agreement,” Barra said in an emailed statement Friday night. “It is clear Shawn Fain wants to make history for himself, but it can’t be to the detriment of our represented team members and the industry.”
Fain has consistently said the union is available to negotiate 24/7 and has in turn accused the automakers of slow-walking negotiations.
GM’s newly announced line of credit will require the automaker to maintain at least $4 billion in global liquidity and $2 billion in U.S. liquidity. The terms of the credit agreement also restrict GM from mergers or sales of assets and limits on other, new debt. As of June 30, GM’s total automotive liquidity was $38.9 billion.
The credit line comes more than a month after Ford obtained a $4 billion line of credit to help it manage through “uncertainties” in the market.
Members of the United Auto Workers union picket outside the Michigan Assembly Plant in Wayne, Michigan, on Sept. 26, 2023.
Matthew Hatcher | AFP | Getty Images
DETROIT — The United Auto Workers union is holding up negotiations with Ford Motor over future electric vehicle battery plants, Ford CEO Jim Farley said during a press briefing Friday.
“I believe we could have reached a compromise on pay and benefits, but so far the UAW is holding the deal hostage over battery plants,” he said after the UAW announced it would expand strikes to two additional assembly plants — one each for Ford and General Motors.
Farley criticized the union for its targeted strike strategy, saying he feels the actions were “premeditated” and insinuating the union was never interested in reaching a deal before a Sept. 14 deadline.
“We have felt from the very beginning, between all the lines of our comments, that the original strike was premeditated and that everything is taking way too long,” he said. “That actual events are predetermined before they happen. It’s been very frustrating.”
Farley’s public criticism of the union is uncharacteristic for Ford, which is historically viewed as the most union-friendly company of the Detroit automakers.
Farley said the company isn’t “at an impasse” with the union but warned that day “could come if this continues.”
GM CEO Mary Barra echoed much of Farley’s criticisms of Fain and the UAW’s strike strategy.
“It’s clear that there is no real intent to get to an agreement,” she said in an emailed statement Friday night. “It is clear Shawn Fain wants to make history for himself, but it can’t be to the detriment of our represented team members and the industry.”
UAW President Shawn Fain fired back at Farley, saying the CEO hasn’t been present at the bargaining table and that he’s “lying about the state of negotiations.”
“It could be because he failed to show up for bargaining this week, as he has for most of the past ten weeks. If he were there, he’d know we gave Ford a comprehensive proposal on Monday and still haven’t heard back,” Fain said in a statement Friday afternoon. “He would also know that we are far apart on core economic proposals like retirement security and post-retirement healthcare, as well as job security in this EV transition, which Farley himself says is going to cut 40 percent of our members’ jobs.”
Multibillion-dollar EV battery plants — and their thousands of expected workers — are crucial to the automotive industry’s future and uniquely positioned to have wide-ranging implications for the UAW, automakers and President Joe Biden’s push toward domestic manufacturing.
Current and former union leaders previously told CNBC that the battery plants will have to be a priority for the labor organization, regardless of whether they’re directly discussed in the national agreement, for the long-term viability of the union.
However, they’re considered a “wild card” issue in the contract negotiations. Many of the battery plants that have been announced cannot legally be included in the current talks, as they are joint venture facilities.
United Auto Workers President Shawn Fain addresses picketing UAW members at a General Motors Service Parts Operations plant in Belleville, Michigan, on Sept. 26, 2023, as U.S. President Joe Biden joined the workers.
Jim Watson | Afp | Getty Images
Ford has announced four future battery plants, including three joint ventures and a wholly owned subsidiary using battery technology licensed from Chinese auto supplier CATL. Ford earlier this week paused construction on the latter plant in Marshall, Michigan, due to the union negotiations, Farley said.
“We can make Marshall a lot bigger or a lot smaller,” Farley said Friday.
GM is the only Detroit automaker with a joint venture battery plant in operation and unionized — making it the first in the country to face this particular negotiating dynamic and a landmark plant to set standards for the industry.
Farley noted that some of the battery production won’t even be covered under the timeline of the deals that are currently being negotiated. He also defended the company’s prior offers, which include more than 20% hourly wage growth, reinstatement of cost-of-living adjustments, job protections and other benefits.
“If the UAW’s goal is a record contract, they have already achieved this,” Farley said. “It is grossly irresponsible to escalate these strikes and hurt thousands of families.”
DETROIT — The United Auto Workers is expanding strikes to 38 parts and distribution locations across 20 states, targeting General Motors and Stellantis, UAW President Shawn Fain said Friday morning.
The union will not initiate additional strikes at Ford Motor, as the company has proven it’s “serious about reaching a deal,” Fain said in a Facebook Live comment.
“We still have serious issues to work through, but we do want to recognize that Ford is showing that they’re serious about reaching a deal,” said the outspoken union leader. “At GM and Stellantis, it’s a different story.”
Fain said the union and Ford have made progress on issues including eliminating some wage tiers, reinstating cost-of-living adjustments and an improved profit-sharing formula.
He also said the union won the right to strike over plant closures during the term of the deal as well as an immediate conversion of temporary, or supplemental, workers — those with at least 90 days of employment — upon ratification.
Ford said the company is “working diligently with the UAW to reach a deal,” but “we still have significant gaps to close on the key economic issues.”
(L-R) Supporter Ryan Sullivan, and United Auto Workers 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
“In the end, the issues are interconnected and must work within an overall agreement that supports our mutual success,” Ford said in a statement Friday.
The strikes at the GM and Stellantis parts suppliers will add roughly 5,600 autoworkers, including roughly 3,500 employees at GM, to the UAW’s ongoing strikes at the Detroit automakers.
“Today’s strike escalation by the UAW’s top leadership is unnecessary,” GM said in a statement. “We have now presented five separate economic proposals that are historic, addressing areas that our team members have said matters most: wage increases and job security while allowing GM to succeed and thrive into the future.
“We will continue to bargain in good faith with the union to reach an agreement as quickly as possible,” the automaker said.
Stellantis said in a statement it questions “whether the union’s leadership has ever had an interest in reaching an agreement in a timely manner.”
Roughly 12,700 UAW workers went on strike a week ago at the following locations: GM’s midsize truck and full-size van plant in Wentzville, Missouri; Ford’s Ranger midsize pickup and Bronco SUV plant in Wayne, Michigan; and Stellantis’ Jeep Wrangler and Gladiator plant in Toledo, Ohio.
Parts distribution centers have been a major point of concern during these talks, especially at Stellantis. The automaker has proposed consolidating 10 “Mopar” parts and distribution centers, which are scattered across the country, into larger Amazon-like distribution centers.
GM has agreed to eliminate the wage differences at its parts and components plants, according to Fain. He commended the Detroit automaker for that action but condemned it for resisting further measures that Ford has agreed to with the union.
Targeting the parts and distribution centers is a unique strategy. It does not affect the production and assembly of vehicles but rather the distribution of parts to dealers.
The new work stoppages, if prolonged, could cause significant disruption for dealers, which could in turn delay fixes for customers. Repair wait times have already been problematic due to recent supply chain issues.
“This will impact these two companies repairs operations,” Fain said. “Our message to the consumer is simple: The way to fix the frustrating customer experience is for the companies to end price gauging. Invest these record profits into stable jobs and stable wages and benefits.”
Many, including Wall Street analysts, expected the union to expand work stoppages to full-size truck plants of the Detroit automakers, which are crucial to the profitability of the companies.
The affected facilities for GM include 18 plants in 13 states: Michigan, Ohio, Colorado, Wisconsin, Illinois, Nevada, California, Texas, West Virginia, Mississippi, North Carolina, Tennessee and Pennsylvania.
For Stellantis, the extended strikes affect 20 facilities in 14 states: Michigan, Ohio, Wisconsin, Minnesota, Colorado, Illinois, California, Oregon, Georgia, Virginia, Florida, Texas, New York and Massachusetts.
“This expansion will also take our fight nationwide,” Fain said. “We will keep going, keep organizing and keep expanding the stand-up strike as necessary.”
UAW began targeted strikes after the sides failed to reach tentative agreements by the expiration of the previous contracts at 11:59 p.m. Sept. 14.
The additional plant strikes come despite record contract offers from the automakers, including roughly 20% hourly wage increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.
Stellantis said on Friday it had made a “very competitive offer” that would see current full-time hourly employees earning between $80,000 and $96,000 a year by the end of the contract, constituting a 21.4% compounded increase; a long-term solution for an idled factory in Belvidere, Illinois; and, “significant product allocation that allows for workforce stability through the end of the contract.”
“We still have not received a response to that offer,” the company said.
The union has demanded 40% hourly pay increases, a shortened workweek, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments, among other improvements.
United Auto Workers members and supporters rally at the Stellantis North America headquarters on September 20, 2023 in Auburn Hills, Michigan.
Bill Pugliano | Getty Images News | Getty Images
The additional strikes come a day after The Detroit News Thursday night reported leaked messages involving UAW communications director Jonah Furman that raised questions about the union’s motives for the work stoppages.
In the undated private group messages, viewed by CNBC, Furman describes UAW’s strategy and targeted strikes as causing “recurring reputations damage and operational chaos.”
Furman, who did not respond for comment, said if the union “can keep them wounded for months they don’t know what to do.”
Fain did not address the messages on Facebook Live beyond discussing the union’s strategy of “doing things differently” to “win record contracts.”
— CNBC’s Gabriel Cortes and John Rosevear contributed to this report.
(L-R) Supporter Ryan Sullivan, and United Auto Workers 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 Workers 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 — as it’s warned.
While talks are ongoing, there has been little reported movement in proposals since the strikes were initiated on Sept. 15 at assembly plants in Michigan, Ohio and Missouri. Sources familiar with the talks describe a “big” gap in demands and the parties being “far apart.”
Headline economic issues and benefits such as hourly pay, retirement benefits, cost-of-living adjustments, wage progression and work-life balance remain central to the discussions. All issues play into one another and can change based on demand priorities.
Each automaker has its own unique issues, but overall the companies want to avoid fixed costs and what they’ve called “uncompetitive practices” such as traditional pensions. The union, in contrast, is attempting to regain benefits lost during past talks and secure significant increases to pay and other benefits, while retaining platinum health care for members.
In the end, it comes down to money, and how much a deal will cost the companies. Wall Street is currently expecting record costs to come from a settlement, though still below the $6 billion to $8 billion in demands the union would like, according to Wells Fargo.
Here’s a general overview of where the union and companies stand on key issues.
Union leaders have been highly transparent during collective bargaining this year with the automakers. However, they’ve largely been quiet on any potential for compromise around a demand of 40% wage increases over four 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 an offer 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 more than $39 per hour for a majority of workers.
Sources familiar with the talks say if the companies do increase hourly wages beyond that 20% level, they’re likely to lower other benefits or reduce jobs in the future to try to make up the difference.
A Ford source said the company’s current proposals would offer entry-level employees starting salaries of about $60,000, potentially increasing to $100,000 or more during the life of the deal. That includes base pay, expected overtime, profit-sharing and other cash 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 year. That’s compared with the average median household income of $51,821 in nine areas where GM has major assembly plants, he said.
Wage tiers — putting autoworkers into distinct pay ranges or classifications — is a tricky, moving target.
The companies and union have defined tiers differently during past negotiations as well as during the talks this year. Tiers can signify the following scenarios: workers doing the same job for different pay and benefits; similar but different job responsibilities; or differences between workers at assembly and components plants, depending on the talks.
The UAW has called broadly for “equal pay for equal work.” It’s a cornerstone of the group’s platform, while automakers have historically argued for pay to be based on seniority, job classification and responsibilities.
So-called tiers were established in 2007 as a concession by the union to allow lower wages and benefits for workers hired after the contracts were ratified that year — what became known as a second tier. The starting pay of these workers was roughly half that of the incumbent workers, and they would not be eligible for the same active health-care benefits, pensions or retiree health-care coverage.
The union has won some similar benefits back for newer workers compared to veteran, or “legacy” ones, but there remains different classifications of workers and pay tiers that amount to “in-progression” wages, in which a worker earns more the longer they’re employed.
For this year, the automakers have largely proposed cutting an existing eight-year pay progression in half and eliminating some pay discrepancies between workers who do similar jobs such as parts and components.
The union would like to eliminate the in-progression pay structure entirely and have workers across the contract earning the same wage (after a 90-day adjustment period) including temporary, or supplemental, workers.
One source familiar with the talks said there’s a “philosophical difference” between the sides. Ford, which utilizes the fewest temporary workers, has agreed to move all current temps with 90 days of work to full-time employees.
The UAW suspended cost-of-living adjustments in 2009, as the companies attempted to cut costs. COLA helps employees maintain the value of their compensation against inflation.
The union now wants to reinstate COLA, especially following a period of decades-high inflation. But the automakers, in general, have proposed either lump-sum payments or suggested utilizing calculations based on inflation levels that the union argues wouldn’t be sufficient to offset increased costs.
Automakers have further argued that profit-sharing payments that have traditionally been based on North American profits of the companies have assisted in offsetting inflation.
The companies are attempting to change or lower profit-sharing payments to offset other increased costs, while the union would like an enhanced formula.
The UAW previously outlined a calculation of providing $2 for every $1 million spent on share buybacks and increases to normal dividends.
The union has proposed better work-life balance, including a potential 32-hour workweek for the pay of 40 hours. It has argued that salaried workers are allowed remote or hybrid work, giving them more time at home with their families.
A shorter workweek has been a non-starter for the automakers, which have countered with additional vacation time, added holiday pay such as for Juneteenth and two-week paternal leave, in some cases.
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 familiar with the talks said GM has committed product to all of its facilities, following three closures four years ago.
The UAW has demanded a “significant” increase in pay for retired workers. The union last week said the companies had rejected all such increases. However, GM CEO Mary Barra said the automaker included in its offer a lump-sum cash payment of $500 for retirees.
A Ford source said the company’s current offer includes a health-care retirement bonus program with lump sums of either $50,000 or $35,000, upon retirement, based on seniority, for newer workers.
Automakers also 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 company and $1 per hour for every hour worked, with a previous cap removed, according to a company source.
GM also offered an unconditional 6.4% company 401(k) contribution for employees who are not eligible for pensions.
Employee disengagement is costing the global economy a whopping $8.8 trillion dollars, according to a recent Gallup report.
The reason only 23% of workers consider themselves to be thriving at work is that people are simply not in the right jobs, according to organizational psychologist Andre Martin.
“When you’re in a wrong fit, your energy has to go to other things, like modulating negative behavior or emotions,” the author of “Wrong Fit, Right Fit” told CNBC Make It.
“You have to figure out ways to be successful inside of a system. It’s not that you don’t have the energy [to be engaged at work], it’s just pointing to other things, which is sad.”
Ensuring a job is a great fit starts the interview process — and Martin found that employees often spotted red flags even before they started the job.
“In every case, when somebody told me about their wrong-fit experience … they said, ‘I knew in the interview, and I just didn’t pay attention to it’,” he added.
“What happens is we’re motivated to want this job … We tend to only pay attention to information that will confirm our choice of joining the company, confirmation bias plays in.”
Likening job hunting to dating, Martin said it’s hard to know if you and your potential employer would make a great pair on the first date — but there are questions you can ask to glean more than just positive first impressions.
“Interview processes aren’t set up for us to really get to know each other on a deep level,” he added.
“You have to be an expert question asker, your best investigative journalist skills should come out during a job interview.”
According to Martin, job satisfaction comes when your expectations for the following three areas are aligned with what a new job can offer.
For a job to be a good fit, the first thing that needs to be in alignment are expectations of how work gets done daily. That means asking yourself the fundamental question: “How do I like to work?”
Imagine when someone really gifted at creating beautiful decks on PowerPoint has to use memos in Amazon — it’s going to feel like “you’re writing with your non-dominant hand,” Martin explained.
He added, “This isn’t about values or big, aspirational statements. It’s about how the company strategizes and collaborates. How do they manage conflict? How do they develop people and socialize ideas? What’s their relationship with time?”
Asking overt questions about how work gets down and who succeeds can be a really nice way to gauge where you are.
Andre Martin
Organizational psychologist
“If you can answer those questions, you’re going to know a lot more about what it’s going to feel like to work there on a random Tuesday in October, as opposed to what the company is trying to be.”
One key thing to find out during the interview is the profile of a person who succeeds in that workplace. For example, what qualities they have, what skills they showcase and how much time they spend at work.
“Asking overt questions about how work gets done and who succeeds can be a really nice way to gauge where you are,” Martin added.
Another Gallup survey from 2020 found that 70% of employee engagement in a company is influenced by managers. “This is why you need to ensure you are working for your ideal leader or manager,” Martin said.
In his book, Martin encouraged job seekers to construct an “ideal leader profile” that outlines
Values
Leadership style
Teaming approach
Approach to recognition and development
Personality and personal attributes
One question you could ask your potential manager in an interview would be: What is the most recent piece of positive feedback that you received from your team about your managerial style?
You can also ask other interviewers about your hiring manager — specifically, “What is the reputation of the team I would be joining? What makes him or her great?”
“Lastly, my advice would be to spend as much time as possible with this person both during the interview and before your start date,” added Martin.
“I made it a practice to have a couple of conversations with my manager before my start date so I could get more of a feel about who they are, what they value, and how they lead.”
Job descriptions on listings are typically a laundry list of all the things you could possibly do in the job.
But according to Martin, a realistic job preview should be about the two to three top deliverables for the next six months.
“And then you can ask yourself, are those near-term deliverables aligned to my superpowers or strengths?”
He added, “Because if they are, you have an easy road to first win. But if they’re not, then right off the bat, you’re struggling to show that you’re competent and that’s just a hard thing to recover from.”
Demonstrators during a United Auto Workers (UAW) practice picket outside the Stellantis Mack Assembly Plant in Detroit, Michigan, US, on Wednesday, Aug. 23, 2023.
Jeff Kowalsky | Bloomberg | Getty Images
Stellantis said Saturday that its most recent proposal to the United Auto Workers includes raises of nearly 21% over the course of the contract, including an immediate 10% pay increase, and the end of wage tiers for some workers, the latest development in a historic showdown between the big three Detroit automakers and the union.
The Jeep maker’s proposal, which is in line with proposals from Ford and General Motors, would also continue to offer profit sharing to workers, according to new details on the offer released by the company Saturday.
“The teams have been very, very careful to listen, very careful for us to come up with best offers that we can do that also protect … the company,” COO Mark Stewart said on a Saturday call with reporters.
The standoff between the UAW and major automakers Stellantis, Ford and General Motors reached a fever pitch Friday, with the union starting work stoppages after an agreement wasn’t met by a Thursday night deadline. The so-called stand-up strike started with walkouts at three key plants — one for each automaker — with the possibility that the UAW can call on more of its members to join the strike if needed.
The union has been seeking 40% hourly pay increases, a reduced 32-hour workweek, a move back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments, among other items. The UAW didn’t immediately respond to a request for comment about the proposal.
Meanwhile, Ford and GM resumed negotiations Saturday after no talks occurred between the union any of the automakers the previous day. Stellantis said it planned to pick up talks again Monday.
UAW President Shawn Fain said earlier this week that Stellantis had previously offered a 17.5% increase.
Under the new proposal, starting pay for supplemental employees would increase by $4.22, or nearly 27%, to $20 an hour.
The company also said it would cut the timeline for ascending the hourly wage scale in half to four years, meaning all full-time hourly employees would reach the top before the contract expires. Under the offer, the wage-tier system would be eliminated entirely for its Mopar division, which is known for service, parts and customer interfacing.
Stellantis also offered an inflation protection measure within compensation. The company said it has committed more than $1 billion for improvements in the pension and retirement savings plans for current employees and retirees.
Stellantis leadership also pushed back against the union’s descriptions of the automaker’s plans to close or sell 18 facilities. The company has said it aims to run parts distribution centers more efficiently and continue shifting resources toward electric vehicles. Jobs in these plants would be persevered, the company said.
The automaker also stressed its commitment to bargaining and reaching an agreement that is financially feasible, echoing concerns raised by Ford and GM leadership. Ford CEO Jim Farley said in a CNBC interview Friday that the UAW demands would force the company to “choose bankruptcy over supporting our workers.” Stellantis’ leadership noted that the company needs to stay competitive with automakers that don’t have unionized employees.
“It’s not about warfare, it’s about win-win,” Stewart said. “It’s about us finding something that is great for our folks today, able to keep a future for tomorrow … for our company to be able to continue the investment path we have for electrification, and for our U.S. operations to be strong so we can compete against the transplants and we can compete against the new entrants.”
President Joe Biden said Friday that the companies should improve their current offers to ensure a strong contract is agreed on amid a period of record profits.
— CNBC’s Michael Wayland contributed to this report.
DETROIT — The United Auto Workers strike is bringing a blue-collar versus billionaire battle to the Motor City, just as UAWPresident Shawn Fain wanted.
The outspoken union leader has weaponized striking — historically a last resort for the union — after less than 24 hours into a work stoppage arguably better than any UAW president has in modern times.
It wasn’t by accident.
Fain, a quirky yet emboldened leader, has meticulously brought the UAW back into the national spotlight after decades of near irrelevance. He wants to represent not just union members but also America’s embattled middle class, which UAW helped create.
United Auto Workers union President Shawn Fain joins UAW members who are on a strike, on the picket line at the Ford Michigan Assembly Plant in Wayne, Michigan, September 15, 2023.
Rebecca Cook | Reuters
To do so, he has leveraged a yearslong national labor movement and a growing disgust for wealthy individuals and corporations among many Americans — starting with his first time addressing the union’s more than 400,000 members during his inauguration speech in March.
“We’re here to come together to ready ourselves for the war against our only one and only true enemy, multibillion-dollar corporations and employers who refuse to give our members their fair share,” Fain said at the time. “It’s a new day in the UAW.”
Fain’s comments Friday morning as he joined UAW members and supporters picketing outside a Ford plant in Michigan — one of three facilities the company is currently striking — echoed everything he said during that first speech.
“We got to do what we got to do to get our share of economic and social justice in this strike,” Fain said outside the Ford Bronco SUV and Ranger pickup plant. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”
Fain’s upbringing plays into his strong unionism and religious beliefs, which he has growingly talked about with members as he emphasizes “faith” in the UAW’s cause.Two of his grandparents were UAW GM retirees, and one grandfather started at Chrysler in 1937, the year the workers joined the union. Fain, who joined the UAW in 1994, even keeps one of his grandfather’s pay stubs in his wallet as “a reminder” of where he came from.
National media and others really started paying attention to Fain when he said the union would withhold a reelection endorsement of President Joe Biden, who has called himself the “most pro-union president in history.” Fain and Biden have spoken and met, but the union leader has not shown much support for the president. In response to comments by the president Friday, Fain said: “Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”
While many past union leaders have talked such talk, Fain has thus far delivered on his promises to members without batting an eye — causing General Motors, Ford Motor and Stellantis to go into crisis mode this week as the UAW follows through on that promise to members.
“We’ve never seen anything like this; it’s frustrating,” Ford CEO Jim Farley told CNBC’s Phil LeBeau Thursday as he criticized Fain and the union for what he said was a lack of communication and counteroffers. “I don’t know what Shawn Fain is doing, but he’s not negotiating this contract with us, as it expires.”
In a statement Friday, Ford said that the UAW’s partial strike at its Michigan Assembly Plant has forced it to lay off about 600 workers.
“This is not a lockout,” Ford said. “This layoff is a consequence of the strike at Michigan Assembly Plant’s final assembly and paint departments, because the components built by these 600 employees use materials that must be e-coated for protection. E-coating is completed in the paint department, which is on strike.”
GM CEO Mary Barra echoed Farley’s feelings Friday morning on CNBC’s “Squawk Box.”
“I’m extremely frustrated and disappointed,” she said. “We don’t need to be on strike right now.”
Both CEOs said everything they could to indicatethey believe Fain may not be bargaining in good faith without using those exact words, which could justify a complaint with the National Labor Relations Board.
The UAW in late August filed unfair labor practice charges against GM and Stellantis with the NLRB, alleging they did not bargain with the union in good faith or a timely manner. It did not file a complaint against Ford. GM and Stellantis have denied those allegations.
Several past union leaders and company bargainers who spoke to CNBC hailed the way Fain has been able to propel the UAW into the national spotlight, including pausing bargaining for a Friday rally and march with Sen. Bernie Sanders, the progressive lawmaker from Vermont. Sanders, whose surprise 2016 Democratic presidential primary win in Michigan helped cement his national prominence, has lent support to numerous labor movements around the country as he rails against the billionaire class.
“I think they’re just doing an outstanding job,” said respected former UAW President Bob King, who cited growing support for the union among the public and the union’s own members. “Both those measurements say that UAW communications has been outstanding.”
UAW members have taken notice — especially after many of them disdained union leadership during and after a yearslong federal corruption investigation that landed two past UAW presidents and more than a dozen others in prison.
“For all the years that I’ve worked here, it’s never been this strong,” said Anthony Dobbins, a 27-year autoworker, early Friday morning while picketing the Ford plant in Michigan. “This is going to make history right here because we are trying to get what we deserve.”
Dobbins, a UAW Local 600 union representative, balked at current record offers by the automakers that have included roughly 20% pay increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.
“That’s not working for us. Give us what we asked for,” Dobbins said. “That’s what we want. We have to work seven days, overtime, just to make ends meet.”
United Auto Workers President Shawn Fain, center, poses with Anthony Dobbins, right, a 27-year autoworker, and others as the union pickets a Ford plant in Wayne, Michigan, Sept. 15, 2023.
Michael Wayland / CNBC
Key demands from the union have included 40% hourly pay increases; a reduced, 32-hour, workweek; a shift back to traditional pensions; the elimination of compensation tiers; and a restoration of cost-of-living adjustments. Other items on the table include enhanced retiree benefits and better vacation and family leave benefits.
Automakers have argued such demands would cripple the companies. Farley even said the company would have “gone bankrupt by now” under the union’s current proposals and members would not have benefited from $75,000 in average profit-sharing over the last decade.
Ford sources said the automaker would have lost $14.4 billion over the last four years if the current demands had been in effect, instead of recording nearly $30 billion in profits.
Such profits are exactly what Fain has said UAW members deserve to share in. But his strategy to get workers a larger piece of the pie carries great risks.
“This is not going to be positive from an industry perspective or for GM,” Barra said Friday.
Many outside the unionbelieve if Fain pushes too hard, it could lead to long-term job losses for the union. A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed the companies cut union jobs through product allocation, plant closures or other means to offset increased labor costs.
“They’re going to have to pay up. The question is how much,” said the longtime bargainer, who agreed to speak on the condition of anonymity. “This ends up with fewer jobs. That’s how the automakers cut costs.”
Fain and other union leaders have argued that meeting the companies in the middle has led to dozens of plant closures, fewer union members and a growing divide between blue-collar workers and the wealthy.
So why not fight?
“This is about us doing what we got to do to take care of the working class,” Fain said Friday. “This isn’t just about the UAW. This is about working people everywhere in this country. No matter what you do for a living, you deserve your fair share of equity.”
Members of the United Auto Workers union hold a rally and practice picket near a Stellantis plant in Detroit, Aug. 23, 2023.
Michael Wayland / CNBC
DETROIT – Thousands of members of the United Auto Workers went on strike at three U.S. assembly plants of General Motors, Ford Motor and Stellantis, after the union and the automakers failed to reach a deal on a new labor contract Thursday night.
“The UAW Stand Up Strike begins at all three of the Big Three,” the union said in a post on X, the site formerly known as Twitter, just after midnight Friday.
The facilities are GM’s midsize truck and full-size van plant in Wentzville, Missouri; Ford’s Ranger midsize pickup and Bronco SUV plant in Wayne, Michigan; and Stellantis’ Jeep Wrangler and Gladiator plant in Toledo, Ohio. For Ford, UAW President Shawn Fain said only workers in paint and final assembly will be on strike.
“We got to do what we got to do to get our share of economic and social justice in this this strike,” Fain said outside the Ford facility in Wayne, minutes after the strike began. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”
The selected plants produce highly profitable vehicles for the automakers that largely continue to be in high-demand. About 12,700 workers – 5,800 at Stellantis, 3,600 at GM and 3,300 at Ford – will be on strike at the plants in total, the union said. The UAW represents about 146,000 workers across Ford, GM and Stellantis.
UAW President Shawn Fain, center, talks to reporters as union members strike outside a Ford plant in Wayne, Michigan, Sept. 15, 2023.
CNBC | Michael Wayland
“If they come to the pump and they take care of their workers, we’ll be back to work,” Fain said early Friday, referring to the automakers. “But if they don’t, we’ll keep amping it up.”
The union selected the plants as part of targeted strike plans initially announced Wednesday night by Fain, who has unconventionally been negotiating with all three automakers at once and has been reluctant to compromise much on the union’s demands.
“For the first time in our history, we will strike all three of the ‘Big Three’ at once,” Fain said just after 10 p.m. Thursday in live remarks streamed on Facebook and YouTube. “We are using a new strategy, the ‘stand-up’ strike. We will call on select facilities, locals or units to stand up and go on strike.”
Fain has referred to the union’s plans as a “stand-up strike,” a nod to historic “sit-down” strikes by the UAW in the 1930s.
Key proposals from the union have included 40% hourly pay increases, a reduced 32-hour work week, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments (COLA), among other items on the table including enhanced retiree benefits and enhanced vacation and family leave benefits.
By late Thursday, it was clear there wouldn’t be a deal, even as President Joe Biden got involved. The White House said Biden, who boasts of his blue collar background and support for organized labor, talked with Fain and the leaders of the Detroit automakers.
Ford, in a statement Thursday night, said the UAW presented its “first substantive counterproposal” to four of the company’s offers, but it “showed little movement from the union’s initial demands.”
“If implemented, the proposal would more than double Ford’s current UAW-related labor costs, which are already significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor,” Ford said. “The union made clear that unless we agreed to its unsustainable terms, it plans a work stoppage at 11:59 p.m. eastern.”
The automakers have made record proposals that address some of the UAW’s ambitious demands but not all of them. Specifically, the companies have offered wage increases of roughly 20%, COLA, altered profit-sharing bonuses; and enhanced vacation and family leave enhancements that the union has found inadequate.
Targeted strikes typically focus on key plants that can then cause other plants to cease production due to a lack of parts. They are not unprecedented, but the way Fain plans to conduct the work stoppages is not typical. They include initiating targeted strikes at select plants and then potentially increasing the number of strikes based on the status of the negotiations. Selecting assembly plants for such strikes is also unique.
A hiring sign is pictured at a McDonald’s restaurant in Garden Grove, California on July 8, 2022.
Robyn Beck | Afp | Getty Images
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
More jobs but higher unemployment U.S. nonfarm payrolls for August increased by 187,000, above the 170,000 estimate. However, the unemployment rate jumped from 3.5% last month to 3.8%, the highest since February 2022. Average hourly earnings increased 4.3% year on year, below the forecast of 4.4%. Combined with the downwardly revised figures for June and July, those are clear signs the U.S. jobs market is slowing.
Electric vehicle moves Tesla shares slid 5% Friday after the company cut prices on its electric vehicles in both the U.S. and China. Meanwhile in Germany, BMW and Mercedes revealed EV concepts, representing their biggest push yet into the EV market. But that might not be enough to stop China’s dominance. Chinese EV companies all delivered enough vehicles in August to keep pace with their third-quarter guidance.
JPMorgan Chase and Jeffrey Epstein JPMorgan Chase notified the U.S. Treasury Department of more than $1 billion in transactions related to “human trafficking” by Jeffrey Epstein, a lawyer for the U.S. Virgin Islands told a federal judge. Those transactions dated back 16 years and were only reported after Epstein was arrested and killed himself in jail in 2019, said Mimi Liu, an attorney for the Virgin Islands.
[PRO]Slow start to September U.S. markets are closed Monday for Labor Day and economic data coming out this week is on the light side. The heavy hitters, like the consumer and producer price indexes, will only be released later in the month. So keep an eye out for these signs that will indicate whether stocks will fall prey to the September seasonality — the month’s historically been the weakest for stocks.
The U.S. economy added more jobs than expected in August, but the overall unemployment rate rose. This may sound counterintuitive since it’s natural to assume an increase in the number of jobs will lead unemployment going down. But there’s a simple explanation for that.
By definition, the unemployment rate is the number of unemployed people (people without a job but are actively looking for one), divided by the labor force (the sum of people both employed and unemployed), expressed as a percentage.
If the unemployment rate goes up, that means the proportion of people looking for a job compared with the total labor force has grown. That’s straightforward enough. For the unemployment rate to go up even as there were 187,000 more jobs in August means there were more people who started looking for a job than people who secured one. The implication: The total labor force grew in August. Indeed, 597,000 people without work experience sought employment last month, according to the report.
A growing labor force is a looser jobs market. That probably contributed to the lower-than-expected wage growth last month. As Bank of America U.S. economist Stephen Juneau wrote, “The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance.”
That will come as a relief to Federal Reserve officials worried about a hot jobs market contributing to inflation. Investors, too, cheered the jobs report. They think there’s a 93% chance the Fed will keep rates unchanged at its September meeting and a 65.3% chance at its November meeting, according to the CME FedWatch Tool. That’s up from 80% and 44.5% a week ago, respectively.
Major indexes rose in response to the jobs report as well. The S&P 500 climbed 0.18% Friday, giving it a 2.5% increase for the week — its best weekly performance since June. The Dow Jones Industrial Average added 0.33% to close 1.4% higher for the week. The Nasdaq Composite was essentially flat, but ended the week up 3.3%. That was both indexes’ best showing since July.
U.S. markets are closed today, so we’ll have to wait to see if they can sustain this momentum and defy September’s reputation as the worst month for stocks.
A Chipotle restaurant advertises it is hiring in Cambridge, Massachusetts, August 28, 2023.
Brian Snyder | Reuters
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
More jobs but higher unemployment U.S. nonfarm payrolls for August increased by 187,000, above the 170,000 estimate. However, the unemployment rate jumped from 3.5% last month to 3.8%, the highest since February 2022. Average hourly earnings increased 4.3% year on year, below the forecast of 4.4%. Combined with the downwardly revised figures for June and July, those are clear signs the U.S. jobs market is slowing.
Winning week for markets U.S. stocks cheered the moderate jobs report and mostly inched up Friday, giving major indexes their best week in months. European markets traded mixed. The regional Stoxx 600 closed flat, the U.K.’s FTSE 100 added 0.34% but other major bourses ended the day in the red. For August, the Stoxx 600 lost 2.8%.
Tesla’s price cut hits shares Tesla shares slid 5% after the company cut prices on its electric vehicles in both the U.S. and China. Additionally, the price of Tesla’s Full Self-Driving software, its premium driver assistance option, was reduced by $3,000. CEO Elon Musk previously said the price would only ever go up. Despite the fall, Tesla shares are still up almost 100% this year.
JPMorgan Chase and Jeffrey Epstein JPMorgan Chase notified the U.S. Treasury Department of more than $1 billion in transactions related to “human trafficking” by Jeffrey Epstein, a lawyer for the U.S. Virgin Islands told a federal judge. Those transactions dated back 16 years and were only reported after Epstein was arrested and killed himself in jail in 2019, said Mimi Liu, an attorney for the Virgin Islands.
[PRO]Slow start to September U.S. markets are closed Monday for Labor Day and economic data coming out this week is on the light side. The heavy hitters, like the consumer and producer price indexes, will only be released later in the month. So keep an eye out for these signs that will indicate whether stocks will fall prey to the September seasonality — the month’s historically been the weakest for stocks.
The U.S. economy added more jobs than expected in August, but the overall unemployment rate rose. This may sound counterintuitive since it’s natural to assume an increase in the number of jobs will lead unemployment going down. But there’s a simple explanation for that.
By definition, the unemployment rate is the number of unemployed people (people without a job but are actively looking for one), divided by the labor force (the sum of people both employed and unemployed), expressed as a percentage.
If the unemployment rate goes up, that means the proportion of people looking for a job compared with the total labor force has grown. That’s straightforward enough. For the unemployment rate to go up even as there were 187,000 more jobs in August means there were more people who started looking for a job than people who secured one. The implication: The total labor force grew in August.
A growing labor force is a looser jobs market. That probably contributed to the lower-than-expected wage growth last month. As Bank of America U.S. economist Stephen Juneau wrote, “The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance.”
That will come as a relief to Federal Reserve officials worried about a hot jobs market contributing to inflation. Investors, too, cheered the jobs report. They think there’s a 93% chance the Fed will keep rates unchanged at its September meeting and a 65.3% chance at its November meeting, according to the CME FedWatch Tool. That’s up from 80% and 44.5% a week ago, respectively.
Major indexes rose in response to the jobs report as well. The S&P 500 climbed 0.18% Friday, giving it a 2.5% increase for the week — its best weekly performance since June. The Dow Jones Industrial Average added 0.33% to close 1.4% higher for the week. The Nasdaq Composite was essentially flat, but ended the week up 3.3%. That was both indexes’ best showing since July.
U.S. markets are closed today, so we’ll have to wait to see if they can sustain this momentum and defy September’s reputation as the worst month for stocks.
— CNBC’s Jeff Cox contributed to this report
Correction: This article has been updated to reflect the correct month of the jobs report.
Actor Karen Brown walks the picket line with fellow SAG-AFRA actors and Writers Guild of America (WGA) writers in front of Paramount Studios in Los Angeles, California, July 17, 2023.
Mike Blake | Reuters
Hollywood’s labor pool is taking a hit as the dual strikes by actors and writers drag on.
The film, TV and music sectors shed a combined 17,000 jobs in August, “reflecting strike activity,” the U.S. Bureau of Labor Statistics said Friday morning.
In contrast, the U.S. economy added 187,000 jobs during the month, spurred by growth in the health care, leisure and construction industries. It topped the 170,000 jobs forecast, according to Dow Jones.
The job losses for the motion picture and sound recording industries underscore one effect of the Writers Guild of America and SAG-AFTRA strikes, which began in May and in mid-July, respectively. In the months since, several notable films and shows halted or wrapped production early.
Hollywood’s massive work stoppage has also had a widespread impact on other sectors such as hospitality and real estate, costing California’s overall economy an estimated $3 billion so far. Hollywood’s striking writers and actors are negotiating with legacy studios for better pay as streaming and the threat of artificial intelligence affect their compensation.
Last month, writers’ union WGA said it received a new proposal from the Alliance of Motion Picture and Television Producers, the body representing major studios like Netflix, Disney and Amazon, to resume talks.
It came after weeks of stalemate and slow progress.
UAW President Shawn Fain addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.
Michael Wayland / CNBC
DETROIT – The United Auto Workers has filed unfair labor practice charges against automakers General Motors and Stellantis to the National Labor Relations Board for not bargaining with the union in good faith or a timely manner, UAW President Shawn Fain said Thursday night.
The Thursday filings followed the companies not responding to the union’s demands in a timely matter, Fain said. The union did not file a complaint against Ford Motor, as Fain said the company responded to the UAW’s demands with a counterproposal.
However, Fain heavily criticized Ford’s proposal that he said included a 9% wage increase over the four-year term of the deal; one-time lump-sum bonuses; and unlimited use of temporary workers who are paid less and don’t have the same benefits. The company also rejected “all of the” union’s job security proposals and “quality of life proposals” such as additional paid holidays and a shorter work week, Fain said.
Spokespeople with the automakers did not immediately respond for comment. The union and NLRB also did not immediately respond for additional details of the filings.
This is breaking news. Please check back for additional updates.
But worries about the future of the program loom large in Americans’ minds, a recent survey from Nationwide Retirement Institute shows.
To that point, 75% of individuals ages 50 and up worry Social Security will run out of funding in their lifetimes, according to the survey of 1,806 individuals taken between May and June.
That is up from 66% of adults who said the same in 2014.
Those concerns have increased as the depletion dates for the program’s funds come closer. The program’s combined funds are due to run out in 2034, at which point 80% of benefits will be payable, Social Security’s trustees have said.
Meanwhile, the fund the program relies on to pay retirement benefits is projected to last until 2033 — just a decade away — with 77% of benefits payable at that time.
“You’ve got people on this stage that won’t even talk about Social Security and Medicare,” former vice president Mike Pence said during Wednesday’s Republican primary debate.
In a February interview with CNBC, Pence said it was necessary to “get everybody at the table” to discuss the future of the programs.
“There’s lots of good ideas to solve this that are common sense that don’t impact people at the point of the need, that don’t affect anybody that is going to retire in the next 25 years,” Pence said, pointing to legislation passed 50 years ago that raised the retirement age and ushered in long-time solvency.
While the other candidates didn’t take Pence’s bait to debate the future of the programs on Wednesday, they have addressed them in separate interviews.
Florida Governor Ron DeSantis told Fox News in July that he would “protect people’s Social Security,” though he is open to reform.
“Talking about making changes for people in their 30s or 40s so that the program’s viable, you know, that’s a much different thing, and that’s something that I think that there’s going to need to be discussions on,” he said.
Uncertainty about the future of Social Security comes as more Americans rely on the program for their sole source of income, with 21% doing so according to Nationwide’s latest retirement survey, versus 13% in 2014.
Meanwhile, just 31% said they currently have income from pensions, versus 48% who said the same 10 years ago.
While the fate of Social Security remains uncertain, experts say there are a couple of things people can do to position themselves for the most benefits available to them.
“This is one of the largest decisions you’ll make in your life” — and one people are least informed about when going into it, said Tina Ambrozy, senior vice president of strategic customer solutions at Nationwide.
Uncertainty around the future of Social Security is the No. 1 reason many retirees are claiming before age 70 – the maximum age it pays to wait to before getting benefits – and full retirement age, when they stand to receive 100% of the benefits they earned, a Schroders survey recently found. (Find out your full retirement age by using this calculator.)
But experts say it’s still best to base your retirement claiming strategy on your personal situation, rather than fears about the program’s outlook.
Even if lawmakers fail to enact changes to Social Security before the depletion dates, the average retiree will still receive around 77 cents on the dollar, Joe Elsasser, a certified financial planner and founder and president of Covisum, a Social Security claiming software company, recently told CNBC.com.
Targeting the claiming strategy that will get you the most benefits will put you in a strong position, even if there are changes down the road.
To be sure, waiting to claim is not the best strategy for everyone, and the decision shouldn’t be based exclusively on age, Ambrozy said.
Social Security comes with many complex rules, and almost half of adults — 49% — said they know how to maximize their benefits, Nationwide’s survey found.
Yet just 13% of adults can correctly guess their full retirement age, which is when they are eligible for 100% of the benefits they earned.
Notably, almost half of respondents — 49% — erroneously believe their benefits will go up at full retirement age even if they claim early.
“Once you elect to start receiving benefits, it locks in,” Ambrozy said. “You’re not just going to just step up based on age.”
To avoid costly mistakes, experts say it’s best to study up on the program’s rules, including information provided by the Social Security Administration.
We just are big believers that you should ask for help and don’t wait until it’s too late.
Tina Ambrozy
senior vice president of strategic customer solutions at Nationwide
To gauge how much money you may be eligible for in retirement, it helps to set up an online Social Security account, where you can also make sure your earnings history and other crucial information is correct.
But prospective beneficiaries should avoid asking workers in their Social Security office for advice, Ambrozy said, as they may not be experts in claiming strategies.
Instead, consulting a financial advisor who is well versed in Social Security can help you identify the most optimal claiming strategy for your personal situation.
“We just are big believers that you should ask for help and don’t wait until it’s too late,” Ambrozy said. “Don’t wait until you’ve already filed and you’re starting to collect and then suddenly you realize you’ve made an incorrect choice.”
Amazon workers hold signs during a walkout event at the company’s headquarters on May 31, 2023 in Seattle, Washington.
David Ryder | Getty Images News | Getty Images
As part of Amazon’s aggressive effort to get employees back to the office, the company is going a step further and demanding that some staffers move to a central hub to be with their team. Those who are unwilling or unable to comply are being forced to find work elsewhere, and some are choosing to quit, CNBC has learned.
Several employees spoke to CNBC about the new relocation requirement. An employee in Texas, who was hired in a remote role, said managers assured his team in March that nothing would change despite the return-to-office (RTO) mandate issued the prior month. But in July, the team was informed by management that they’d have to choose between working out of Seattle, New York, Austin, Texas, or Arlington, Virginia, according to internal correspondence.
Under the guidelines, remote workers are expected to have completed their move to a main hub by the first half of 2024, the document states. The employee, who doesn’t live near any of the designated cities, chose to leave Amazon after securing another position, in part due to uncertainty about future job security and the potential of higher living costs associated with the relocation with no guarantee of an increase in salary.
The person asked not to be named to avoid retaliation. CNBC spoke with three other employees in similar situations who all asked to remain anonymous.
Amazon spokesperson Rob Munoz confirmed the relocation policy, and said it affects a small percentage of the company’s workforce. The e-commerce giant said hub locations vary by team, and each team determines which locations are their hub. The company does provide relocation benefits to employees asked to move.
“It’s not a one-size-fits-all approach, so we decided that the best thing to do was to communicate directly with teams and individuals who are affected to ensure they’re getting accurate information that’s relevant to them,” Munoz said in a statement. “If an individual feels like they don’t have the information they need, we encourage them to talk with their HR business partner or their manager.”
The relocation requirement is escalating tensions between Amazon and some of its roughly 350,000 corporate employees over RTO plans after many employees moved away from their in-person office location during the Covid pandemic.
In May, Amazon began requiring that staffers work out of physical offices at least three days a week, shifting from a policy that left it up to individual managers to decide how often team members should be in the office. CEO Andy Jassy has extolled the benefits of in-person work, saying it leads to a stronger company culture and collaboration between employees.
Following the mandate, a group of employees walked out in protest at the company’s Seattle headquarters. Staffers also criticized how Amazon handled the decision to lay off 27,000 people as part of job cuts that began last year.
The company is slashing costs elsewhere as well. Amazon said it will end a perk next year that allows staffers to get one free drink at in-office coffee shops. The company also reduced the amount it reimburses for parking, and stopped providing free Uber rides to and from work, employees said.
Amazon said it still reimburses employees’ public transportation costs in all major metro areas, and provides free commuter shuttles and campus shuttles.
The return-to-office mandate has been a particularly thorny subject, and enforcement has been a challenge. Amazon sent out a notification earlier this month to some staffers informing them that they weren’t “meeting our expectation of joining your colleagues in the office at least three days a week,” according to a copy of the memo viewed by CNBC. “We expect you to start coming into the office three or more days a week now.”
Some staffers who received that notice had been in compliance with the mandate, while others had taken vacation or sick leave that was approved by their manager, one staffer said. Employees expressed their frustration over the notice in comments on an internal support ticket, said the person, who asked to remain anonymous because he wasn’t authorized to speak on the matter.
Amazon responded to the ticket, explaining internally the notice was sent to employees who it determined had badged in fewer than three days a week for at least five of the past eight weeks or at least three of the past four weeks.
“If you believe that you received this email in error, please reach out to your manager to discuss your situation and ensure it is accurately reflected in the system,” the company said on the support site.
Amazon confirmed the authenticity of the internal correspondence. The company stressed it had called employees back to the office three days a week because it felt it would be beneficial for company culture.
“We knew that there would be some adjustment period, so we’ve worked to support people as they’ve figured out their routines,” Munoz said in a statement. “With three months under our belt, and a lot more people back in the office, we’re reiterating our expectation that people join their teammates at least three days in the office.”
Andy Jassy, chief executive officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, U.S., on Tuesday, Oct. 5, 2021.
David Ryder | Bloomberg | Getty Images
For employees affected by the relocation policy, Amazon is asking that they move to a designated hub, which could be Seattle, Arlington, New York, Chicago, San Francisco or another main office. Some employees see it as a stark reversal from the company’s approach during the pandemic, when Amazon ramped up its recruiting outside of Seattle and Silicon Valley, and pledged to expand its presence in markets like Phoenix, Dallas and San Diego.
The employees who spoke to CNBC said they view the relocation requirement as onerous and significantly disruptive to their personal lives. In some cases, staffers are being asked to move out of state, which would require them to break their housing lease, or transition their children to new schools.
Amazon has informed the employees individually about the change, but the company hasn’t put out any official communication to the broader workforce. In late July, managers began informing employees that they’d soon be expected to work from a main hub location, and they could choose between relocating, finding another job internally or resigning. Some were told they had 30 to 60 days to make a decision, the staffers said.
Three employees based in different locations — Colorado, Utah and California — were each asked to relocate to Seattle. They told CNBC they’ve chosen to leave Amazon because moving would burden them financially or put too much strain on their family.
The employees said the relocation requirement made little sense to them, noting they already live within walking or commuting distance of an Amazon office where they’ve been working the mandated three days a week.
The prospect of transferring to a new role within the company isn’t seen as much of an option. Amazon paused corporate hiring last November as part of wider cost-cutting efforts, which translates into fewer job openings than normal. The staffers told CNBC they weren’t able to find much, if anything, in their current office that’s relevant to their expertise.
Still, it’s a difficult decision to quit, as companies, particularly in the tech industry, have been reducing headcount over the past year to reckon with rising inflation and economic uncertainty.
The crackdown at Amazon is leading to some bending of the rules. In a story last week about some of the RTO changes, Insider reported that some employees have considered using a family member’s address near an Amazon office, or agreed to relocate and then used the time they were given to move to look for another job.
The Colorado-based employee who was asked to move said that, adding it all up, the relocation requirement and Amazon’s broader effort to get people into the office make it feel as if leadership is “trying to make it less enjoyable to work there.”
UAW Vice President Rich Boyer addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.
Michael Wayland / CNBC
WARREN, Mich. – Automaker Stellantis has threatened to move production of the current Ram 1500 pickup truck from a factory in suburban Detroit to Mexico, a union leader said Sunday.
United Auto Workers Vice President Rich Boyer, who heads the union’s Stellantis unit, said the automaker has discussed the move during ongoing contract negotiations that are occurring simultaneously but separately between the UAW and General Motors, Stellantis and Ford Motor.
Boyer said the company’s plans would include producing a new all-electric Ram pickup truck at the Sterling Heights Assembly Plant, which currently produces most of the Ram light-duty pickups.
Such a move would likely receive some political pushback. It also would potentially impact the union’s membership, as EVs require fewer workers to produce them. There’s also no guarantee that an all-electric pickup would be as successful as the current internal combustion engine (ICE) model, meaning less job security for members.
Boyer, speaking to hundreds of union members during a “Sunday Solidarity” rally, didn’t hold back his displeasure about the potential plans, calling out Stellantis CEO Carlos Tavares for not caring about U.S. auto workers.
“He don’t give a s*** about the American auto worker,” Boyer said wearing a red UAW shirt with “UNITED WE STAND DIVIDED WE FALL.” “They have said they want to take the Ram 1500 ICE and send it to Mexico.”
Workers build 2019 Ram pickup trucks on ‘Vertical Adjusting Carriers’ at the Fiat Chrysler Automobiles (FCA) Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.
Rebecca Cook | Reuters
Stellantis, which already produces some Ram pickups in Mexico, did not confirm nor deny the potential move, saying in a statement: “Product allocation for our U.S. plants will depend on the outcome of these negotiations as well as a plant’s ability to meet specific performance metrics including improving quality, reducing absenteeism and addressing overall cost.
“As these decisions are fluid and part of the discussions at the bargaining table, we will not comment further.”
UAW President Shawn Fain said he believes relocating the truck production would “be a huge mistake on the part of Stellantis to try it.”
“Those are our jobs and that’s our vehicle. We expect to keep that work,” he said.
Speaking with CNBC after the event, UAW’s Boyer described the ongoing negotiations with Stellantis as “slow and confrontational.”
Fain, who began leading the union earlier this year and has taken a more confrontational tone with the negotiations, said he would like to reach tentative agreements with the companies in the coming weeks ahead of the deals expiring at 11:59 p.m. ET, Sept. 14.
UAW President Shawn Fain addresses union members during a “Solidarity Sunday” rally on Aug. 20, 2023 in Warren, Mich.
Michael Wayland / CNBC
‘When Labor Day hits, we better have agreements. If we don’t, there’s going to be problems,” Fain said, declining to predict the likelihood of a strike against one or all three of the automakers. “We’re not married to anything right now.”
Fain earlier this month publicly threw a recent proposal from Stellantis into a trash bin during a Facebook Live event with members.
Contract talks between the union and automakers usually begin in earnest in July ahead of mid-September expirations of the previous four-year agreements. Typically, one of the three automakers is the lead, or target, company that the union selects to negotiate with first and the others extend their deadlines. However, Fain has said this year may be different, without going into specific details.
“In most recessions, unemployment rises more for lower-income groups,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers.
“Although we are not in an overall recession yet, the demand for and wages of lower-income groups are outpacing higher-income groups.”
Maskot | Digitalvision | Getty Images
The start of the year was plagued by waves of layoffs: Employers announced plans to cut 481,906 jobs in the first seven months, up 203% from the 159,021 cuts for the year-earlier period, according to Challenger, Gray & Christmas, a global outplacement and business and executive coaching firm.
Some sectors, such as banking and tech, have been particularly hard hit, and a series of Wall Street layoffs earlier this summer fueled fears that a recession still looms driven by those professional job losses.
But there still aren’t enough workers to fill open positions in the service industry and the unemployment rate remains near a 50-year low at just 3.5%.
“Recession is a loaded term,” said Jacob Channel, senior economist at LendingTree. “White-collar jobs might not be as plentiful as they were last year, but they’re still around.”
And “at the end of the day, even if white-collar hiring does appear to be on the decline, that doesn’t mean that the entire economy as a whole is struggling,” Channel said.
“On the contrary, most current data indicates that despite numerous headwinds, the broader economy is doing remarkably well, all things considered,” he added.
But regardless of the country’s economic standing, many Americans are feeling the pain of higher prices and most have exhausted their savings and are now leaning on credit cards to make ends meet.
Several reports show financial well-being is deteriorating. Rather than a “richcession,” this more closely resembles a so-called K-shaped recovery, said Greg McBride, Bankrate.com’s chief financial analyst.
Wealthy Americans aren’t exactly suffering, but credit card debt is at an all-time high and 61% of adults are living paycheck to paycheck. “Those are signs of financial strain,” he said.
However this economic period is ultimately defined, it will only be in hindsight, McBride said. “Typically, by the time a recession is declared, the recovery is underway.”
Shipping containers are loaded onto rail cars at the Global Container Terminals Vanterm container terminal on Vancouver Harbour in Vancouver, British Columbia, Canada.
Bloomberg | Bloomberg | Getty Images
Members of the International Longshore and Warehouse Union (ILWU) of Canada voted to ratify the second tentative agreement with West Coast port ownership, meaning an end to the uncertainty and trade congestion that has gripped the supply chain for weeks since dock workers first decided to strike.
Rob Ashton, president of the ILWU, said 74.66% of members voted in favor of accepting the terms of the tentative agreement.
The ILWU Canada and the British Columbia Maritime Employers Association (BCMEA) announced a revised second tentative deal last Sunday, with the agreement brokered by the Canada Industrial Relations Board, after union members rejected an original deal proposal. The country’s industrial relations board directed the union to vote no later than Friday.
The new deal includes increases in wages, benefits, and training, according to an overnight statement by the BCMEA. No additional specifics were given.
The original deal proposal which was rejected increased the compounded wage over four years by 19.2%, according to disclosures from the BCMEA, as well as a signing bonus of $1.48 an hour per employee, which tallied to approximately $3,000 per full-time worker. There was also an 18.5% increase in the retirement payout.
The union argued that worker salaries were unsustainable against rising inflation, but the BCMEA countered that over the past 13 years, longshore wages have risen by 40%, ahead of inflation at 30%. The union said that the use of contract labor for maintenance work was another sticking point in the deal.
The BCMEA said the ratification would provide “certainty and stability for the future of Canada’s West Coast ports.”
“The BCMEA recognizes and regrets the profound repercussions this labor disruption has had on the national economy, workers, businesses and ultimately, all Canadians that depend on an efficient and reliable supply chain. All supply chain stakeholders must collaborate now to ensure we do not see disruptions like this ever again.”
But, after a week of traveling and meeting shipping clients, Paul Brashier, vice president of drayage at ITS Logistics, told CNBC the reliability and reputation of the Canadian ports have created lasting damage.
“We are happy that the ILWU has finally come to terms and agreed to a new contract,” said Brashier. “Unfortunately, this lack of government intervention and direction has forced cargo owners and shippers in our network to make the decision and permanently move their imports back to the U.S. port of entry on the West Coast.”
Over the course of the 14-day strike, ocean carriers either pulled up anchor to divert the Canadian ports to stay on schedule and unload at U.S. ports. Some U.S. shippers reconsigned the destination of their containers to the U.S during that time. Other ocean carriers eventually went back to the Canadian ports and waited to unload both Canadian and U.S. freight.
Canadian Labor Minister Seamus O’Regan tweeted acknowledgment of the supply chain damage the strikes caused and is now calling on federal officials to review how the disruption of this magnitude unfolded so it can be avoided in the future.
It will take at least two months for the railroads to clear out the pileup of containers as a result of the 14 days of striking by dock workers. At the height of the strike, $12 billion in freight was stranded on the water. Some of that trade was diverted on vessels that called on ports on the U.S. West Coast.
The Railway Association of Canada originally estimated that it would take three to five days, for every day the strike lasted, for networks and supply chains to recover. When the first strike ended on its 13th day, delays for rail containers were estimated at 39 to 66 days. After an additional day of work stoppage in the on-again, off-again strike, the congestion tally moved up to a range of 42 to 70 days.
“Delays appear to be bearing out toward the mid-to-upper end of that range,” a Railway Association of Canada spokesperson recently told CNBC via email.
Changes to vessel routes impact the profitability of railroads, including Canadian Pacific Kansas City and Canadian National Railway, since fewer containers can be unloaded at U.S. ports. This decrease in containers also impacts trucking companies. On the flip side, the extra containers coming into U.S. ports will add to the profitability of U.S. trucking companies and railroads BNSF, a subsidiary of Berkshire Hathaway, and Union Pacific. Over the long term, if Canadian trade is rerouted to the East Coast as a result of West Coast labor strife, that would also benefit Norfolk Southern and CSX.
In the first two weeks of the strike, the flow of railroad trade from Canada to the U.S. was cut by 82%. Train trade has slowly recovered, with a 6.2% decrease being tabulated for the week ending July 29.
The supply chain issues have already hit the bottom lines of railroad companies. Canadian Pacific Kansas City railroad’s chief marketing officer John Brooks told analysts on the company’s conference call last week the labor unrest will negatively impact the railroad’s revenue by $80 million. Brooks said the company is working to claw back those losses over the third and fourth quarters.
Canadian National Railway announced it was running additional trains to help expedite the clearing out of the container congestion.
The timing of this strike occurred during the peak shipping season, when back-to-school and holiday items are arriving for retailers.
According to OECD data, only Mexico ranks worse than the U.S. in terms of old-age “poverty depth,” which means that among those who are poor, their average income is low relative to the poverty line. And just three countries have worse income inequality among seniors.
There are many contributing factors to these poverty dynamics, said Andrew Reilly, pension analyst in the OECD’s Directorate for Employment, Labour and Social Affairs.
For one, the overall U.S. poverty rate is high relative to other developed nations — a dynamic that carries over into old age, Reilly said. The U.S. retirement system therefore “exacerbates” a poverty problem that already exists, he said.
Further, the base U.S. Social Security benefit is lower than the minimum government benefit in most OECD member nations, Reilly said.
There’s very little security relative to other countries.
Andrew Reilly
pension analyst in the OECD’s Directorate for Employment, Labour and Social Affairs
The U.S. is also the only developed country to not offer a mandatory work credit — an important factor in determining retirement benefit amount — to mothers during maternity leave, for example. Most other nations also give mandatory credits to parents who leave the workforce for a few years to take care of their young kids.
“There’s very little security relative to other countries,” Reilly said of U.S public benefits.
That said, the U.S. benefit formula is, in some ways, more generous than other nations. For example, nonworking spouses can collect partial Social Security benefits based on their spouse’s work history, which isn’t typical in other countries, Mitchell said.
Here’s where it gets a little trickier: Some researchers think the OECD statistics overstate the severity of old-age poverty, due to the way in which the OECD measures poverty compared with U.S. statisticians’ methods.
For example, according to U.S. Census Bureau data, 10.3% of Americans age 65 and older live in poverty — a much lower rate than OECD data suggests. That old-age income poverty rate has declined by over two-thirds in the past five decades, according to the Congressional Research Service.
Historically, poverty among elderly Americans was higher than it was for the young. However, that’s no longer true — seniors have had lower poverty rates than those ages 18-64 since the early 1990s, CRS found.
“The story of poverty in the U.S. is not one of older folks getting worse off,” Mitchell said. “They’re improving.”
Regardless of the baseline — OECD, Census Bureau or other data — there’s a question as to what poverty rate is, or should be, acceptable in a country like the U.S., experts said.
“We are arguably the most developed country in the world,” said David Blanchett, managing director and head of retirement research at PGIM, the investment management arm of Prudential Financial.
“The fact anyone lives in poverty, one can argue, isn’t necessarily how we should be doing it,” he added.
Despite improvements, certain groups of the elderly population — such as widows, divorced women and never-married men and women — are “still vulnerable” to poverty, wrote Zhe Li and Joseph Dalaker, CRS social policy analysts.
Longer lifespans and baby boomers hurtling into their retirement years are pressuring the solvency of the Old-Age and Survivors Insurance Trust Fund; it’s slated to run out of money in 2033. At that point, payroll taxes would fund an estimated 77% of promised retirement benefits, absent congressional action.
“You could argue pending insolvency of Social Security is threatening older people’s financial wellbeing,” Mitchell said. “It is the whole foundation upon which the American retirement system is based.”
About 40 years ago, half of workers were covered by an employer-sponsored plan. The same is true now.
Olivia Mitchell
University of Pennsylvania economics professor and executive director of the Pension Research Council
Raising Social Security payouts at the low end of the income spectrum would help combat old-age poverty but would also cost more money at a time when the program’s finances are shaky, experts said.
“The easiest way to combat poverty in retirement is to have a safety-net benefit at a higher level,” Reilly said. It would be “extremely expensive,” especially in a country as large as the U.S., he added.
Blanchett favors that approach. Such a tweak could be accompanied by a reduction in benefits for higher earners, making the system even more progressive than it is now, he said.
Currently, for example, Social Security replaces about 75% of income for someone with “very low” earnings (about $15,000), and 27% for someone with “maximum” earnings (about $148,000), according to the Social Security Administration.
Reducing benefits for some would put a greater onus on such households to fund retirement with personal savings.
However, the relative lack of access to a savings plan at work — known as the “coverage gap” — is another obstacle to amassing more retirement wealth, experts said.
Research shows that Americans are much more likely to save when their employer sponsors a retirement plan. But coverage hasn’t budged much in recent decades, even as employers have shifted from pensions to 401(k)-type plans.
“About 40 years ago, half of workers were covered by an employer-sponsored plan,” Mitchell said. “The same is true now.”
Of course, workplace plans aren’t a panacea. Contributing money is ultimately voluntary, unlike in other nations, such as the U.K. And it requires financial sacrifice, which may be difficult amid other household needs such as housing, food, child care and health care, experts said.
Miami Beach, Florida, Normandy Isle, 7ty One Venezuelan restaurant, interior with customers dining and wait staff cleaning up.
Jeff Greenberg | Universal Images Group | Getty Images
Friday’s jobs report could provide a crucial piece to the increasingly complicated puzzle that is the U.S. economy and its long-anticipated slide into recession.
Wall Street prognosticators expect that nonfarm payrolls increased by 200,000 in July, a number that would be the smallest gain since December 2020, while unemployment is projected to hold steady at 3.6%. June saw a gain of 209,000, and the year-to-date total is around 1.7 million.
While slower job growth might fit the narrative that the U.S. is headed for a contraction, other data, such as GDP, productivity and consumer spending, lately have been surprisingly strong.
That could leave the payrolls number as a key arbiter for whether the economy is headed for a downturn, and if the Federal Reserve needs to keep raising interest rates to control inflation that is still running well above the central bank’s desired target.
“This will most likely be a report that has a little bit for everybody, whether your view is skirting recession altogether, a soft landing, or an outright recession by the end of the year,” said Jeffrey Roach, chief economist for LPL Financial. “The challenge is, not every metric is telling you the same story.”
For economists such as Roach, the clues to what the generally backwards-looking report tells about the future lie in some under-the-hood numbers: prime-age labor force participation, hours worked and average hourly earnings, and the sectors where job growth was highest.
The prime-age participation rate, for one, focuses on the 25-to-54 age group cohort. While the overall rate has been stuck at 62.6% for the past four months and is still below its pre-pandemic level, the prime-age group has been moving up steadily, if incrementally, and is currently at 83.5%, half a percentage point above where it was in February 2020 — just before Covid hit.
Rising participation means more people are coming into the labor force and easing the wage pressures that have been contributing to inflation. However, the lower participation rate also has been a factor in payroll gains that continue to defy expectations, particularly amid a series of Fed rate hikes specifically aimed at bringing back in line outsized demand over supply in the labor market.
“The durability of this labor market largely comes because we simply don’t have the people,” said Rachel Sederberg, senior economist for job analytics firm Lightcast. “We’ve got an aging population that we have to support with much smaller groups of people — the millennials, Gen X. They don’t even come close to the Baby Boomers who have left the labor market.”
The jobs report also will provide a breakdown of what industries are adding the most. For much of the recovery, that has been leisure and hospitality, along with a variety of other sectors such as health care and professional and business services.
Wages also will be a big deal. Average hourly earnings are expected to increase 0.3% for the month and 4.2% from a year ago, which would be the lowest annual rise since June 2021.
Together, the data will be looked at to confirm that the economy is slowing enough so that the Fed can start to ease up on its monetary policy tightening due to a slowing labor market, but not because the economy is in trouble.
Payrolls will provide “a litmus test for markets amid a stretch of economic data that continues to show not just a resilient U.S. economy, but one that may be facing renewed risks of overheating,” said Tom Garretson, senior portfolio strategist at RBC Wealth Management.
RBC is expecting below-consensus payroll growth of 185,000 as “cooling labor demand [is] ultimately likely to reinforce growing economic soft-landing scenarios,” Garretson said.
However, Goldman Sachs is looking for a hot number.
The firm, which is perhaps the most optimistic on Wall Street regarding the economy, is expecting 250,000 due to expected strength in summer hiring.
“Job growth tends to remain strong in July when the labor market is tight — reflecting strong hiring of youth summer workers — and three of the alternative measures of employment growth we track indicate a strong pace of job growth,” Goldman economist Spencer Hill said in a client note.
Those measures include job data from alternative sources, the job openings count from the Labor Department, and the firm’s own employer surveys. Hill said labor demand has “fallen meaningfully” from its peak a year ago but is still “elevated” by historical norms.
Indeed, Homebase data shows that small businesses are still hiring but at a decreased pace. The firm’s Main Street Health Report indicates that employees working dropped 1.2% in July while hours worked fell 0.9%. Wage growth, though, rose 0.6%, indicating that the Fed still could feel the heat even if the top-line payrolls number is softer.
The trick, said Lightcast economist Sederberg, is for the labor market to be cooling but not crashing.
“We want to see a slow drawdown from the upheaval that we’ve seen in the past few months and years. We don’t want to see a crash and jump back to that 5% unemployment rate that we knew a decade ago or so,” she said. “So slow and steady wins the race here.”
UAW President Shawn Fain chairs the 2023 Special Elections Collective Bargaining Convention in Detroit, March 27, 2023.
Rebecca Cook | Reuters
United Auto Workers (UAW) President Shawn Fain said on Tuesday the union was seeking ambitious benefit increases in contract talks with the Detroit Three automakers, including double-digit pay rises and defined-benefit pensions for all workers.
The UAW presented its economic demands to Chrysler-parent Stellantis on Tuesday and will make presentations to General Motors (GM) Wednesday and Ford Thursday ahead of the Sept. 14 expiration of the current four-year contracts, Fain said.
They include proposing to make all temporary workers at the U.S. automakers permanent, placing new strict limits on the use of temporary workers and increasing paid time off.
Fain also wants increases in pension benefits for current retirees and to ensure all workers get defined-benefit pensions.
The union leader, in Facebook Live remarks, called the demands “the most audacious and ambitious list of proposals they’ve seen in decades.”
Fain said the CEOs of the Detroit Three saw their pay rise by 40% on average over the last four years.
He singled out GM CEO Mary Barra, who received $29 million of compensation in 2022, and said it would take an entry level worker at a GM joint venture battery plant 16 years to earn as much as she made in a week.
Fain listed numerous demands, including restoring retiree health care benefits and cost of living adjustments. He also said the UAW was proposing to have the right to strike over plant closures and to eliminate the two-tier wage system under which new hires earn 25% or more less than veteran employees.
He noted the Teamsters recently won an end to two-tiered wages in a new contract with UPS. “It’s wrong to make any worker a second class-worker. We can’t allow it any longer,” Fain said of the demand for the same at the Detroit Three.
Stellantis said it had a “very productive meeting” with Fain and the bargaining committee and would review the union requests to understand how they aligned with company proposals and where common ground could be found.
“We are not seeking a concessionary agreement,” Stellantis said.
GM said it would review the demands once they were received from the UAW on Wednesday.
Ford said it looked “forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.”
Fain also said the Detroit Three need to pay better wages for workers at battery joint venture plants and praised Democratic senators last week for urging the companies to include those workers under the master agreements.
