GM's counteroffer to UAW, Fain's response show sides far apart

An initial economic proposal from General Motors Co. to the United Auto Workers showed Thursday a deal is distant, leading UAW President Shawn Fain to remind GM "the clock is ticking" closer to the Sept. 14 contract expiration.

GM's counteroffer provided Thursday to the union includes bonuses on top of 10% wage increases over the life of the deal for most employees — the highest increase offered since 1999, the company said. The automaker sent its offer to the union and in direct communication to its employees internally at its manufacturing plants and through its GM Negotiations website. GM employs about 46,000 UAW-represented workers in the United States.

GM's counter proposal on economic issues came after the UAW last week filed unfair labor practice charges with the National Labor Relations Board against the Detroit automaker as well as Stellantis NV. Ford Motor Co., which avoided an NLRB filing, made a proposal last week that calls for 9% in wage hikes over four years.

The UAW is seeking a 46% wage hike over four years. Union President Shawn Fain on Friday called GM's offer "insulting."

"Clearly, they're going to have to move on wages more than they have," said Marick Masters, a professor at Wayne State University's Mike Ilitch School of Business. "And they're going to have to move on the cost of living issue more than they have ... it's just going to be a very, very rocky few days before the 14th. And unless there's some sort of unexpected breakthrough, I don't think strike is avoidable at this time."

GM workers in 2019 went on strike for 40 days, costing the automaker nearly $3 billion.

GM's offer includes for all employees:

• Recognizing Juneteenth as a paid holiday; new total of 16-18 paid holidays per year
• $5,500 ratification bonus

For temporary and in-progression employees:

• Current entry-level in-progression employees earn a 56% wage rate increase over the contract
• Current temporary employees will receive a 20% increase to $20 per hour
• Eliminate two steps to get to the top wage rate, which provides double-digit wage increases for all in-progression employees from the beginning of the contract, according to GM

For most employees (at max wage rate):

• 10% increase in wages
• Two additional 3% lump sum payments resulting in a total increase of 16%
• $6,000 one-time inflation-recognition payment
• $5,000 in inflation-protection bonuses over the life of the agreement (in-progression employees are eligible.)

In a Thursday statement, the automaker said: “Our offer has been developed considering everything in our environment including competitor offers and what is important to our team members. It includes well-deserved wage improvements that far exceed the 2019 agreement. We still have work to do, but we will continue to bargain in good faith with the UAW and work towards an outcome that recognizes the vital role of our team members in GM’s success.”

An offer letter to employees was signed by GM President Mark Reuss and Gerald Johnson, GM executive vice president of global manufacturing and sustainability. 

In a Thursday video posted on the GM Negotiations website, Johnson said the offer also includes "no change to our healthcare premiums."

Reuss added the company has "an incredibly promising future" with "opportunities for everyone."

"Our competition is fierce, but I'm confident that we have what it takes to win and win together," Reuss said. "And that's why we need a fair contract that both rewards our employees and protects the long-term health of our business."

But Fain slammed the company's offer in a statement: “After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers."

Jeremy Ladd, who works at GM's Fort Wayne, Indiana, truck plant and belongs to Local 2209, feels the initial offer is "not good enough."

"This is not an equitable agreement that they're offering to us," he said. "We're the people that actually turn the screws and tighten down the bolts to make these products for them so they can make that money and we're not not out of line asking for a more equitable share of the money that is actually being made by the company."

In 2022, GM, Stellantis and Ford reported adjusted operating income in North America, respectively, of $13 billion, $15.2 billion and $9.2 billion. Hourly employees are eligible to receive profit sharing. For the year 2022, Stellantis hourly employees saw as much as $14,760, GM employees up to $12,750 and Ford employees up to $9,176.

Stephanie Riley, a member of Local 598 working at GM's Flint Assembly heavy-duty truck plant, like Fain called the contract offer a "huge insult." Her biggest issue is that the proposal has different offers for temporary, in-progression and legacy seniority employees.

"Everyone should be made whole," she said. "If we are not all made whole, we have different interests at contract time and we have different interests at the ballot box. I feel like the No. 1 priority is to get everybody the same and then we can start from there."

Fain last week said unfair labor practice charges were filed against GM and Stellantis in response to the companies' "willful refusal to bargain in good faith" because they had not yet responded to the UAW's economic proposals. Both companies objected to the charges and insisted they were bargaining in good faith. A regional office of the NLRB will investigate the claims.

Stellantis is expected to present a counteroffer to the union this week.

Workers at the translatlantic automaker's engine plant in Trenton rallied Thursday at the Local 372 hall and called for demanding wage increases more so than lump sums that don't compound over time. They also conducted a practice picket outside the factory.

"I want to see it on a weekly basis" in a paystub, said Wayne Barracks, 53, of Trenton, a team leader at the engine plant and an 11-year UAW member. "Ten percent is not bad. That makes a difference in pay, 10%."

If 10% is Stellantis' offer, however, "we'll be out," said Caesar Seay, 67, of Southgate, a 12-year UAW member who also works at the Trenton plant. "We deserve more than that. Especially since I don't get a pension, I have to put a lot in my 401 to retire."

Attending the practice picket, U.S. Rep. Rashida Tlaib criticized the GM and Ford counterproposals for not including cost-of-living wage adjustments.

"I told Ford Motor Company already when they contacted me about their proposal — they didn't tell me specifics — I said it's very telling you didn't think about putting COLA in," the Detroit Democrat told The Detroit News. "That's been part of the contract since 1948. This lump sum stuff? No, have some sustainability, so they don't have to guess, 'Is (paying for) this going to be an issue?'"

Rep. Debbie Dingell, D-Ann Arbor, added that a lot still can happen in the next week, but that the automakers "really need to hear what the UAW is looking for."

"Trenton Engine is the heart and the soul of the Downriver," Dingell said at the UAW Local 372 hall to roughly 200 UAW members. "We are going to fight to make sure it has product."

Trenton's north building went idle in 2019, and with the move to electric vehicles, workers say they're nervous about the shift.

"We've given up to save their future," said Mike Byers, 57, of Monroe, a pipefitter and six-year UAW member. "It's time for the company to save us."

A 10% wage increase would be "getting there," he added.

Local 372 President David Gerbi says Trenton produces the best quality engines.

"Downriver has lost too many plants already," he said. "That affects the city, mom and pops, the gas stations, the grocery store workers, and housing. We need product."

UAW Vice President Rich Boyer said Thursday he hasn't seen anything on a Stellantis offer yet, but he struck an optimistic tone.

"We're starting to see a little bit of movement," he said. "It's starting to come together. There is some good conversation going on, and I'm hopeful."

In addition to proposing a 46% wage increase over four years, the UAW is seeking a 32-hour work week for 40 hours' pay, rolling over all current supplemental employees to full-time, cost-of-living adjustments, defined benefit pensions and retiree health care for all, increases to retiree benefits, the right to strike over plant closures, and more paid time off. All told, the demands could increase total labor costs, including wages and benefits, to more than $100 per hour per worker. The Detroit automakers' current all-in labor costs are around $65 per hour compared to $55 at foreign automakers and $45 at Tesla Inc.

Ford Motor Co. last week unveiled some of its counter proposals to the union.

They include a reduction of the time it takes workers to reach the top of the wage scale from eight years to six years, elimination of wage tiers, a 20% starting wage increase for temporary workers to $20 per hour, $5,500 ratification bonuses, and $12,000 over four years in what the company calls a "cost-of-living adjustment bonus." That is different than the cost-of-living adjustment the union is seeking, which ties wages to the federal inflation index.

"After extensive negotiations, Ford has presented a generous offer on the upcoming contract that would provide our hourly employees with 15% guaranteed combined wage increases and lump sums, and improved benefits over the life of the contract," Ford CEO Jim Farley said in a statement at the time. "Overall, this offer is significantly better than what we estimate workers earn at Tesla and foreign automakers operating in the U.S."

Fain has criticized Ford's offer, saying it "insults our very worth." The UAW and Ford continue to bargain on economic issues.

The contracts expire at 11:59 p.m. Sept. 14. UAW members have authorized their leaders to call a strike is necessary, something Fain has indicated he is willing to do if agreements aren't reached by the deadline.

Meanwhile, politicians have been weighing in on the likelihood of a strike with President Joe Biden earlier this week telling reporters: “No, I’m not worried about a strike until it happens. I don’t think it’s going to happen.”

Fain was shocked by Biden's comments, telling reporters at Detroit's Labor Day parade: “He must know something we don’t know. Maybe the companies plan on walking in and giving us our demands on the night before."

More:Fain 'shocked' at Biden's opinion that an auto strike is unlikely

Michigan Gov. Gretchen Whitmer is talking to the UAW and the automakers to avoid a strike, Bloomberg reported Thursday.

Whitmer told the news service in an interview during her trip to Tokyo: “I’m talking with the leadership of the Big Three as well as the leadership of the UAW, hoping that they stay at the table and come up with an agreement that supports workers and averts a strike."

khall@detroitnews.com

jgrzelewski@detroitnews.com