UAW president Shawn Fain trashes Stellantis contract proposal

United Auto Workers President Shawn Fain threw a printed contract proposal from the maker of Jeep SUVs, Ram pickup trucks and other vehicles into the trash Tuesday, accusing the company of reneging on its commitment not to seek a "concessionary agreement" amid national contract talks.

Fain in a Facebook livestream discussed points of Stellantis NV's offer to the union that were outlined in a flier circulating on social media this week.

Fain writes:Autoworkers deserve to thrive, not just survive

The proposal, obtained by The Detroit News, is dated July 27 and includes adding a new employee classification with an alternate, flexible schedule; tying wage increases, profit sharing and supplemental unemployment benefits to absenteeism; increasing employee contribution to health-care and prescription coverage; eliminating the cap on supplemental workers and allowing the company to make bargaining changes in response to the move to electrification without rank-and-file ratification.

"Stellantis' proposals are a slap in the face," Fain said. "They're an insult to our members' hard work over the last four years. As I said earlier, our members have worked their a---- off in the best of times and the worst of times, to produce incredible value for this company. During COVID, UAW members were deemed essential. They risked their lives, and some gave up their lives to keep the lines running. So rather than honoring the sacrifices made by the employees, management chooses to spit in our faces."

Fain during the livestream picked up his office trash can and threw the proposal into the garbage.

"I'll tell you what I want to do with their proposal," he said. "I'm going to file it in its proper place, because that's where it belongs: the trash, because that's what it is."

The automaker's proposal as explained by Fain stands distinct from the "members' demands" from the UAW outlined last week. The union's proposals include eliminating wage tiers for full-time employees, expanding profit sharing to supplemental employees, providing pensions and retirement health-care coverage for all workers, reducing the work week to 32 hours while paying workers for 40, and granting a 46% wage hike over four years.

Estimates in total say the proposal could increase labor costs to more than $100 per hour per worker at the Detroit Three automakers, roughly double labor costs at foreign automakers assembling vehicles in the United States.

In response to the UAW's demands last week, Stellantis spokeswoman Jodi Tinson had said in a statement that the automaker was reviewing the numbers to understand what they would mean for the company and its 43,000 represented employees.

"We have been clear from the start that we are not seeking a concessionary agreement," she said in the statement. "As we have done for more than 70 years, we will work constructively and collaboratively with the UAW to find solutions that will result in a contract that is competitive in the global market, responsibly addresses employee concerns and meets the needs of our customers."

A request for comment was sent to Stellantis on Tuesday concerning the UAW's fliers, Fain's livestream and the written proposal obtained by The News.

The written proposal doesn't detail potential wage increase amounts or how much pay the new tier of flexible-schedule employees would receive, but it emphasizes the need to address high rates of unplanned absenteeism in U.S. plants. Planned and unplanned absenteeism, including tardiness, was approximately 23% in 2022, according to the written proposal, which suggests in 2021 and 2022, more than 16,700 vehicles weren't built because of absenteeism. The estimate included in the write-up states that was $217 million in lost revenue.

Stellantis also suggests increasing the number of pay periods required for vacation entitlements. It seeks to eliminate the cap on use of lower-paid supplemental workers and to allow the use of temporarily laid-off workers at other plants. It includes a new quarterly "reward" for 100% shift attendance, as well.

Stellantis seeks to expand its ability to use overtime on weekdays and weekends for emergencies, critical plant status, high rates of absenteeism and to make up volume. It also seeks to bank hours to balance the use of periods when overtime is used and during periods of decreased production levels.

Stellantis' health-care costs, according to the written proposal, are expected to increase by $613 million to $1.1 billion by 2027. To alleviate that, the automaker suggests employee cost sharing possibly through premiums, copays, deductibles and out-of-pocket maximums. It would incentivize participation in its wellness program and add a surcharge for spouses of employees who don't use their own employer's health insurance. Coverage of certain drugs, such as for erectile dysfunction, would be limited. The company also would enroll in the Blue Elect Plus network.

The company suggests some changes to how it contributes to retirement plans, including trading its contribution to a matching plan.

Additionally, lump sum payments for employees would be conditioned on the ratification of their local contract agreement.

The proposal doesn't mention the idled Jeep Cherokee plant in Belvidere, Illinois, but it requests that the moratorium on closing and selling a plant be deleted. It also would eliminate the relocation allowance plan.

Fain said Stellantis can handle the UAW's proposals, which he last week described as "audacious and ambitious." Stellantis posted a record $15.2 billion in adjusted operating income in North America in 2022 and $8.88 billion in the first half of 2023. For 2022, Stellantis workers received $14,760 in profit sharing, the most of the Detroit Three's UAW-represented employees, though supplemental workers aren't eligible to receive the checks.

Stellantis CEO Carlos Tavares, however, has emphasized the need for the company to stay competitive since electric vehicles represent 40% more in cost to produce than their internal combustion engine counterparts.

Fain criticized Tavares' compensation. His total remuneration package in 2022 was $24.8 million, a 22% increase year-over-year, though that includes stock grants not yet vested and that will depend on the automaker's continued performance. The total was 365 times mores than the average Stellantis employee's compensation. Tavares' "actual compensation" consisting of his salary, bonus, vested stock awards and pension contribution was $15.8 million, a 13% decrease from 2021.

Stellantis is the company created in 2021 from Fiat Chrysler Automobiles NV and French rival Groupe PSA. In 2019, FCA employees represented by the UAW ratified a four-year agreement that provided 3% wage increases in two of the years and 4% lump-sum bonuses in the other two, an improved profit-sharing formula and ratification bonuses of $9,000 for full-time employees and $3,500 for supplemental workers.

Fain's livestream is reflective of the "more militant" tone the union has taken since the new administration took over in March, said Marick Masters, a business professor at Wayne State University.

"The negotiations are taking place increasingly in the public domain," he said. "The union is of the mindset that they will call out the company when it believes it has misrepresented the situation.

"It doesn’t necessarily signal anything more than that. I wouldn’t say it means they are going to target Stellantis because of this."

This year's demands from the UAW call for an immediate 20% wage raise upon ratification and a 5% raise every September from 2024 through 2027. The UAW also is seeking the reintroduction of a cost-of-living adjustment.

"My message," Fain said, "to Stellantis is very simple: Quit with the games, stop with the lies and start bargaining an agreement that actually shows value to the sacrifices made by our members."

All three contracts with the Detroit automakers are set to expire on Sept. 14, and Fain said the strike fund is in "healthy" shape.

"If things don't pick up, the Big Three companies don't start getting serious and getting down to business and resolving the membership's demands, then, come September 14th, we're gonna have to see what happens, but I don't think they're gonna be happy with it."

bnoble@detroitnews.com

Twitter: @BreanaCNoble