GM increases wage offer ahead of UAW strike deadline

General Motors (GM) has increased its contract offer to a 20% wage hike for US autoworkers in a bid to avoid a strike. Ford Motor has also confirmed it offered a 20% hike and other benefits. The United Auto Workers (UAW) is demanding 40% raises and major improvements in benefits. The UAW has outlined plans for a series of strikes targeting individual auto plants if agreements are not reached. The UAW is asking for 40% raises and major improvements in benefits. A full strike would hit earnings at each affected automaker by about $400 million to $500 million per week.

In an online event on Thursday, UAW organizing director Brian O. Shepherd discussed the strike strategy, which aims to provide negotiators with maximum flexibility to secure a contract that autoworkers deserve. He also mentioned that a full walkout is still a possibility. UAW President Shawn Fain criticized the Detroit Three's offer of pay raises up to 20%, deeming it inadequate. However, automakers argued that the union had not yet formally responded to their more generous offers.

General Motors (GM) announced on Thursday that it had increased its contract offer to include a 20% wage hike for U.S. autoworkers, with 10% in the first year, in an effort to avoid a strike. The strike is scheduled to begin at 11:59 p.m. if no agreement is reached. Both Ford Motor and GM have confirmed that they had previously offered a 20% wage increase and additional benefits.

GM CEO Mary Barra emphasized the urgency of reaching an agreement and proposed a 4 1/2 year labor deal with a 20% wage hike. Barra reminded employees of the negative consequences of the 2019 strike, which resulted in a $3.6 billion pre-tax loss for GM. Coordinated strikes against selected auto plants would be a significant labor action and could potentially impact U.S. economic growth.

Ford expressed concerns about the high likelihood of a strike as it had not received a counterproposal to its offer from Tuesday. The UAW's demands include the restoration of defined benefit pensions, shorter work weeks, increased cost-of-living adjustments, job security guarantees, and an end to the use of temporary workers. Fain stated that automakers had rejected the pension and work week improvements, as well as changes to profit sharing that would reduce payments to workers. Automakers argue that the UAW's demands are unaffordable and unrealistic.

Ford revealed that if the UAW's demands had been in effect, it would have incurred a loss of $14.4 billion over the past four years instead of the nearly $30 billion in profits it recorded. The UAW has plans for a series of strikes targeting individual auto plants if agreements are not reached by late Thursday. Aid for suppliers impacted by the strike has been discussed, but these talks are still in the preliminary stages.

Ford CEO Jim Farley urged the UAW to continue negotiations and avoid a strike. Fain outlined a strategy to create confusion by initiating work stoppages at individual plants if an agreement is not reached. Stopping work at key engine or transmission plants could disrupt production at other factories that rely on these parts. A full strike would have significant financial implications for each automaker, potentially costing them $400 million to $500 million per week.

A UAW strike would not affect transplant carmakers like Toyota, Honda, and Mercedes, as their U.S. plant workers are not represented by the union. President Joe Biden has encouraged both parties to reach a win-win agreement to preserve the future of UAW workers in the auto industry. A prolonged strike could pose political challenges for Biden. Senator John Fetterman argued that automakers can afford to pay more, citing the combined $74 million earnings of the Detroit Three CEOs last year.

Ford Motor has proposed a 20% pay increase over the contract term, while GM previously offered an 18% hike and Stellantis, the parent company of Chrysler, offered 17.5%. These figures fall short of the union's demands but are higher than the initial offers. The details of the new GM offer are not yet known. Ford is still awaiting a counteroffer from the UAW. The UAW plans to hold a rally in Detroit on Friday, which will be attended by Fain, Senator Bernie Sanders, and other members of Congress, coinciding with the expected walkouts.

In conclusion, the negotiations between the UAW and automakers continue as the threat of a strike looms. The outcomes of these negotiations will have significant implications for autoworkers, the auto industry, and the U.S. economy as a whole.