Tag: Stellantis NV

DETROIT – The United Auto Workers union believes there is “more to be won” in ongoing contract negotiations with the Detroit automakers following five weeks of labor strikes against the companies, UAW President Shawn Fain said Friday.

His comments come despite record contract offers from General Motors, Ford Motor and Stellantis that now include 23% hourly pay increases and other significantly enhanced benefits during the terms of the four and a half-year deal.

“There is more to be won,” Fain said during an online broadcast. “These are already record contracts, but they come at the end of decades of record decline. So it’s not enough to be the best ever, when auto workers have gone backwards over the last two decades. That’s a very low bar.”

Despite Fain’s comments, the union did not announce additional strikes Friday against any of the companies. He said the “bottom line is we’ve got cards left to play, and they’ve got money left to spend.”

Fain did not address a Friday report by Bloomberg that the union has asked for a 25% increase in general wages.

The union has not announced any additional strikes since initiating an unexpected walkout on Oct. 11 at Ford’s Kentucky Truck Plant that produces highly profitable pickup trucks and SUVs. That’s despite Ford having the best proposal regarding economics, as outlined Friday by Fain.

Fain spent quite a notable amount of time during the online broadcast discussing how the union plans to use these talks to assist in organizing non-union plans. He also heavily criticized the Monday comments of Ford Chair Bill Ford to bring an end to the negotiations.

“Bill Ford said it shouldn’t be Ford versus the UAW. He said it should be the UAW and Ford against foreign automakers,” Fain said. “I want to be crystal clear on one thing: The days of the UAW and Ford being a team to fight other companies are over … Non-union autoworkers are not the enemy. Those are our future union family.”

Ford said it remains “eager to conclude these negotiations with a contract” that benefits its workers, citing it’s “good that Mr. Fain acknowledged Ford’s contract offer ‘already’ is a record and remains the best one on the table.”

Stellantis said the sides “continue to be productive, building on the momentum from the past several weeks,” but declined to discuss specific details. GM declined to comment regarding Fain’s comments, citing details it released of its most recent offer earlier Friday.

The UAW hasn’t expanded strikes at GM since Sept. 29 or at Stellantis since Sept. 22, despite offers made this week not meeting details of Ford’s proposal from last week and Fain last week saying the union was initiating a “new phase” of strikes and contract negotiations.

“Right before a deal is when there’s the most aggressive push for that last mile. They just want to wait us out,” Fain said. “They want division. They want fear. They want uncertainty. And what we have is our solidarity.”

The strike at Ford’s Kentucky plant — responsible for $25 billion in revenue annually — marked a major escalation in the UAW’s targeted, or “stand-up,” strikes. It also represents a shift in strategy, as Fain had previously publicly announced the targets before the work stoppages occurred.

The UAW has been gradually increasing the strikes since the work stoppages began after the sides failed to reach tentative agreements by Sept 14.

About 34,000 U.S. automakers with the companies, or roughly 23% of UAW members covered by the expired contracts with the Detroit automakers, were on strike.

Here are details of current proposals by the companies to UAW:

• Wages: All three automakers have offered a 23% pay increase over four and a half years.
• Wage tiers: All three automakers have agreed to eliminate wage tiers at parts facilities where workers have historically been paid less than production-line workers.
• Wage progression: Ford has offered a three-year progression to the top wage rate, a system that was in place from the mid-1990s until the aftermath of the 2008 economic crisis. GM has also offered a three-year progression, but only for current workers. GM wants a more gradual four-year progression for future hires. Stellantis has offered only a four-year progression.
• Cost of living adjustments (COLA): Ford has offered to restore its COLA formula to the level last used in 2009, meeting the UAW’s demand. Fain said that GM is “approaching restoration but not fully there,” while Stellantis wants to delay cost-of-living adjustments by a year.
• Job security: Ford and Stellantis have agreed to give the union the right to strike over plant closures, a key UAW demand. GM has so far rejected that demand.
• Temporary workers: Ford has offered to convert current temp workers with 90 days of service to full-time employees, with a raise to $21 per hour for remaining and future temps. Whether those future temps will be converted to full-time employees automatically is still being negotiated, Fain said. GM has proposed to convert current and future temps with one year of service to full time employees, and has matched Ford with a $21 per hour wage for remaining and future temps. Stellantis agreed to convert “thousands” of current temps to full-time status, with a wage increase to $20 per hour for remaining and future temps. As with Ford, the automatic conversion of future temps is “still being negotiated,” Fain said.
• Retirement plans: All three automakers have offered a $3 increase to pension benefits. Ford and Stellantis have offered to increase their 401(k) contributions to 9.5% plus $1 per hour. GM offered an increase to 8% plus $1.25 per hour.
• Payments to retired workers: Ford offered annual lump sum payments of $250 to retired workers, with surviving spouses eligible to continue to receive the payments. GM offered a one-time lump sump payment of $1,000, with surviving spouses not eligible. Stellantis rejected all increases to retiree pay. Fain said all three offers were “deeply inadequate.”
• Profit sharing: Ford offered to improve its existing profit-sharing formula by including profits from Ford Credit, its financing subsidiary, and to make temp workers eligible to receive profit-sharing payments. Stellantis and GM both want to maintain their current profit-sharing formulas, but GM has offered to make temp workers with 1,000 hours of service eligible to receive payments. Stellantis has not offered to make its temporary workers eligible to receive profit-sharing payments.
• Work-life balance: All three automakers have offered to make Juneteenth an official paid holiday and have offered two weeks of paid parental leave.

DETROIT – A shift in strategy by the United Auto Workers union this week has some analysts wondering if the parties are — perhaps, counterintuitively — getting closer to a deal.

On Wednesday the union initiated a surprise work stoppage at Ford Motor’s Kentucky Truck Plant. The strike involves 8,700 workers and affects the most crucial plant, by far – responsible for $25 billion in revenue annually – that the union has walked out on since the strikes began Sept. 15. It’s expected to quickly have a ripple effect on other Ford plants and suppliers.

It also ushered in what UAW President Shawn Fain characterized as a “new phase” of strikes and contract negotiations with Ford, General Motors and Chrysler-parent Stellantis, giving the union the element of surprise to keep the automakers on edge during the ongoing negotiations, Fain told members in a Friday presentation.

“We’re entering a new phase of this fight and it demands a new approach,” Fain said Friday. “We’re done waiting until Fridays to escalate our strike.

“We are prepared at any time to call on more locals to stand up and walk out,” he said.

Until this week, Fain had announced all of the union’s new strikes on Fridays, during what has become a weekly livestreamed update for union members.

Some Wall Street analysts and industry experts think this week’s shift in strategy could be a sign that UAW leaders feel a deal with Ford is close, and that they’re increasing pressure as a tactic to get the deal over the finish line — and to help sell a potential tentative deal to their members.

“We continue to believe the escalation at [Ford] this week is a sign the talks may be coming to an end. KY Truck is likely Ford’s most profitable plant, and therefore the strike is the highest level of escalation, aside from a national strike,” Wells Fargo analyst Colin Langan wrote in a Friday note. “This escalation would likely be done to push for final terms.”

But the UAW’s leaders may be looking one more step ahead, to the process of selling a tentative deal with Ford to their members. The thinking is that to convince members to ratify a potential new contract, UAW President Shawn Fain and the union’s leadership will need to convince autoworkers that the union has fought as hard as possible to have their demands met. Striking Ford’s most profitable factory might be one way to do that.

Wolfe Research’s Rod Lache argued the Kentucky strike may allow UAW leadership to claim that they did all that could be done, especially if it leads to one or two more concessions from Ford.

“In another week or two, Fain should be able to credibly announce that he has forced Ford into one last capitulation (battery plants?), and that UAW members have secured the last few ounces of wage, benefits, and job protection concessions that they can get,” Lache wrote Thursday to investors.

GM avoided a strike at its most profitable SUV plant in Texas last week with a last-minute offer to include battery cell plant workers under the company’s national agreement, however details regarding how that will be done are believed to be still being negotiated.

While Fain declined to expand strikes against GM and Stellantis Friday, Wells Fargo’s Langan thinks that doesn’t necessarily mean they’re spared.

“The lack of GM & STLA strike today, even though both have not matched F’s offer, would be consistent with the UAW holding out the most profitable plants for a final push,” he wrote in a Friday note.

Ford may be close to that point. An executive said Thursday the automaker was “at the limit” of what it can offer UAW in terms of economic concessions.

The Detroit automakers have largely given into many of the union’s demands, but not all of them.

The companies haven’t waved the white flag on demands for a 32-hour workweek — which was always a nonstarter for the companies and which has largely fallen out of union talking points — and a 40% wage increase.

Ford was up to a record 23% wage increase in its recent contract proposal, with the others not far behind.

Then there’s the outstanding issues of benefits for retirees as well as a return to traditional pension plans and future battery plant jobs and workers.

Industry experts and sources familiar with the talks believe regardless of the outcome, the contracts will have ripple effects on the companies potentially in the way of reorganizations, cost cuts and future investments and jobs.

A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed that the companies will cut union jobs through product allocation, plant closures or other means to offset increased labor costs once the contracts are set.

“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.”

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.

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.

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.