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Auto workers demand 40 percent raise as contract talks heat up [1]

['Jeanne Whalen']

Date: 2023-08-04

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Autoworker contract talks with Detroit’s biggest car companies are off to a tense start this week after the workers’ union demanded a 40 percent pay increase and other improvements that one automaker said Thursday would “threaten” the company’s future. Get a curated selection of 10 of our best stories in your inbox every weekend. ArrowRight The United Auto Workers, representing 150,000 employees of General Motors, Ford and Stellantis, entered the negotiations under new leadership that says it is determined to win historic compensation upgrades after losing ground to inflation and substandard contracts signed since the Great Recession of 2008.

The stakes for the U.S. economy are high. The UAW’s combative new president, Shawn Fain, has all but said that some or all of the union’s autoworkers will strike in mid-September if they don’t make progress at the bargaining table with the automakers, known as the Big Three.

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The automotive sector is vital to U.S. manufacturing, making up about 3 percent of gross domestic product. UAW workers produce nearly half of the light vehicles manufactured in the United States, according to GlobalData.

The pay increase the union demanded with all three automakers would be spread out over the multiyear contract. It would increase wages by 20 percent immediately and by an additional 5 percent in each year of the contract, according to people familiar with the talks. Details of the wage increase demand were first reported by the Wall Street Journal on Thursday.

Fain this week said big raises were only fair given jumps in executive compensation.

“Big Three CEOS saw their pay spike 40% on average over the last four years. We know our members are worth the same and more,” Fain said in a Facebook Live presentation this week.

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Inflation and poor wage growth in recent years for UAW members, he added, have caused autoworkers to fall “further and further behind.” Their wages at the Big Three currently range from roughly $18 an hour to $32 an hour, depending on seniority, according to the union. Starting wages are about $10 lower than what they would be had they kept up with inflation since 2007, the UAW said.

The union is also calling for a new “working family protection program” that would require automakers that close a factory to continue paying workers to do community service or other local jobs, Fain said this week.

In a statement Thursday evening, General Motors criticized the “breadth and scope” of the UAW’s demands, saying they “would threaten our ability to do what’s right for the long-term benefit of the team.”

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“We think it’s important to protect U.S. manufacturing and jobs in an industry that is dominated by non-unionized competition,” the company added.

Ford on Friday said it is “proud to build more vehicles in America and employ more UAW-represented hourly workers in America than any other automaker” and will work with the union “on creative solutions.”

Stellantis said it intends “to fairly reward” employees but added that “it will be critical to find common ground” that doesn’t jeopardize the company’s ability to serve customers and“continue providing good jobs here at home.”

Fain, elected in March with a remit to reinvigorate the UAW, has barnstormed the negotiations with an ambitious list of demands — and a communications strategy designed to increase worker and public attention to the talks, including through regular updates on Facebook Live.

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Among the union’s other demands: reinstating regular cost-of-living adjustments to wages; ending a tiered employment structure that offers lower compensation to many new workers; restoring pensions and retiree health-care benefits to all workers; and ensuring that EV battery and vehicle plants offer the same compensation and job security as those in the gasoline era.

The talks come after several years of tumult in the auto sector, including global shortages of computer chips that forced many automakers to idle factories for weeks on end, and a sweeping retooling as carmakers begin churning out electric vehicles.

Automakers have repeatedly cautioned that the transition to EVs will require tens of billions of dollars of investment in new factories, suggesting that the expense makes it hard for them to hike pay as much as workers would like.

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“Success in this new world will require us to adapt. Some jobs will be disrupted, and some will be created. Navigating that disruption means collaborating on what it will take for Ford to compete and win — striking the right balance between investing in our collective future and sharing the value we create together,” Ford chief executive Jim Farley wrote in the Detroit Free Press last month.

Farley also stressed that hourly wages aren’t workers’ only form of compensation. Including health-care coverage and other benefits, the average hourly UAW employee at Ford earns $64 per hour, he said. He added that “eligible UAW-represented employees earned a total of $42,000 in bonuses and profit-sharing during the past four years.”

Fain has countered that the industry’s profit levels in recent years leave plenty of money to invest in EVs and to give workers big raises. He has also criticized automakers for spending billions on share buybacks aimed at inflating company valuations.

“That’s billions of dollars that have been robbed from the workers who made these profits possible. That’s billions of dollars that weren’t spent on the EV transition,” Fain said this week.

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[1] Url: https://www.washingtonpost.com/business/2023/08/04/uaw-double-digit-pay-increase/

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