Negotiations Between Automakers and U.A.W. Show Little Progress as Contract Expiration Looms

The United Auto Workers (U.A.W.) union and the three major automakers in the U.S. – General Motors (GM), Ford Motor, and Stellantis (parent company of Chrysler) – are facing a potential strike as their contract expiration date approaches. The companies have offered pay raises of 14 to 16 percent over four years, along with lump sum payments and policy changes to benefit recent hires and temporary workers. However, the new U.A.W. president, Shawn Fain, has deemed these offers as “insulting,” demanding pay increases of about 40 percent. Fain has repeatedly warned of a strike if a satisfactory agreement is not reached.

The negotiations come at a time of significant transformation in the auto industry, with a shift towards electric vehicles (EVs). There are concerns among U.A.W. members about job loss and potential wage reductions due to the adoption of EVs, while the automakers are also grappling with the costs of transitioning to this new technology. The outcome of these negotiations will have far-reaching implications for both the auto industry and the economy.

The Anderson Economic Group estimates that a 10-day strike against GM, Ford, and Stellantis could result in a $1 billion reduction in profits for the companies and $900 million in lost wages for U.A.W. members and workers in related industries. Apart from wages, the union and the automakers are also divided on issues such as job preservation, retirement benefits, and cost-of-living adjustments.

While Ford has made some progress in its discussions with the U.A.W., offering a wage increase of about 15 percent, talks with GM and Stellantis have been slower. The U.A.W. has accused the two manufacturers of refusing to offer proposals and negotiate in good faith. GM has countered with a wage increase and lump sum payments that would raise worker pay by approximately 16 percent. Stellantis has offered a 14.5 percent increase in base wages with no lump sum payments. However, Fain believes that the offers are insufficient given the companies’ profits and has expressed dissatisfaction with their responses to other union demands.