GM sweetens UAW offer to include 20% wage increase, other benefits as it tries to avoid strike

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General Motors CEO Mary Barra talks with reporters following a meeting with lawmakers from Michigan and Ohio at the U.S. Capitol June 05, 2019 in Washington, DC.

Chip Somodevilla | Getty Images

DETROIT – General Motors is attempting to avoid a looming strike by the United Auto Workers union through a new offer Thursday that includes significant pay increases, more vacation days and better benefits for retirees, among other perks.

The proposal, which GM CEO Mary Barra called “compelling and unprecedented,” addresses many of the union’s demands but continues to fall short on others, such as a 40% pay increase over the four years of the deal that UAW sought.

GM released details of the deal roughly nine hours before the UAW could initiate targeted strikes against GM, Ford Motor and Stellantis if deals are not reached by 11:59 p.m. ET on Thursday.

“We’re at a crossroads on our path to building a company that can sustain all of us for decades to come,” Barra said in a public letter. “Today we have put on the table a compelling, unprecedented economic package that reflects this important moment. Ford sources said that the automaker would not have made nearly $30 billion profits over the last four years had the UAW’s demands been met. Instead, they say the automaker lost $14.4 billion. UAW President Shawn Fain appears determined to reach those terms.

The Ford sources who spoke on condition of anonymity because the discussions are ongoing, also refuted the UAW’s claim that its members don’t make a living wage. They said the average compensation under Ford’s current proposal for first-year UAW employees would be $132,000, including $92,000 in cash and $17,500 in health care coverage. Here are the key pieces of the GM offer made Thursday: Wages: A 20% increase over the four-year term of the contract, with a 10% raise in the first year. This is up from GM’s previous offer of 18%. The UAW wants to see increases of 40% in the duration of the contract. This is in line, they claim, with the increases in pay seen by Detroit automakers CEOs in the past few years. GM’s plan reduces that time to just four years. The UAW has demanded an end to the tier system.

Inflation protection: GM’s offer includes an unspecified level of cost-of-living protection for maximum wage earners, meaning wages will increase to – in theory, at least – keep pace with inflation. The union has demanded a return to a more generous system used in the past.

Job security: GM is promising not to shut down any of its U.S. manufacturing or warehousing facilities over the life of the contract. Work-life balance: GM had previously proposed to recognize Juneteenth as a holiday. The union is now demanding a return to a more generous system used in the past. Ford’s offer on Wednesday, which was the only one at the time that included parental leave, is now being matched. The UAW demanded additional time off including a four day work week. Remember: we had a strike last year and no one won. “

Key demands from the union have included 40% hourly pay increases, a reduced 32-hour workweek, a shift back to traditional pensions, the elimination of compensation tiers and a restoration of cost-of-living adjustments, among other items.

Ford’s most recent proposal includes a 20% wage increase over the four-year deal; $6,500 ratification bonuses; elimination of wage tiers at two components and parts plants; a cost-of-living adjustment; halving the time to reach full pay for four years; and other benefits.

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