UAW begins negotiations for auto offers with GM, Ford and Stellantis

UAW President Shawn Fain chairs the collective bargaining convention for the 2023 special election in Detroit, March 27, 2023.

Rebecca Cook | Reuters

DETROIT — United Auto Workers President Shawn Fain promised union members he would do things differently in collective bargaining with Detroit automakers this year. So far he has delivered.

With politically astute strategies, resonant social media messages, and confidence that the ailing union can ride a nationwide wave of support for organized workers, Fain has rallied the UAW to win a “war” against “corporate greed” and billionaire corporations. into the national limelight General Motors, Ford engine And Stellar.

“This is our defining moment, as a union as a worker. And we take a different approach at every step,” Fain said Tuesday night during a Facebook Live event with members.

There is a consensus among previous negotiators and several people involved in previous negotiations that this year’s negotiations, which officially begin on Wednesday, will be “different”.

It will also be “confrontational,” “expensive,” “critical,” “unprecedented,” and an “S—Show,” some said.

The negotiations have new top negotiators trying to prove themselves on almost every side, union members’ belief that concessions are not an option, and significant concerns about the industry’s transition to electric vehicles, which is killing jobs and worsening wages .

The talks also come at the same time as contract negotiations with Canada’s Unifor union, which represents 18,000 Detroit-based automaker workers whose contracts expire in September. While US and Canadian unions have expressed their unity, it is expected that this will lead to even more complexity and competition for investment and jobs.

Instead of a standard handshake between the two sides, signaling the start of negotiations, the union opted for a “membership handshake” between international UAW leaders and factory workers on Wednesday. Company representatives are not expected to attend the events. However, the union will begin private meetings with company officials next week.

Former UAW President Gary Jones (left) and Bill Ford, chief executive officer of Ford Motor, shake hands July 15, 2019 at Ford’s world headquarters to begin negotiations for a new contract.


Fain acknowledged Tuesday that the start of negotiations represented a “break with tradition,” saying, “I won’t shake hands with a CEO until they do the right thing for our members and we fix the broken status quo with the Big Three.” .”

Public disagreements between the UAW and the automakers have already begun — unexpectedly early, in the past two weeks — with editorials in the local Detroit newspaper by Ford CEO Jim Farley and UAW Vice President Chuck Browning, who heads the union’s Ford division.

play hard ball

“We are in the process of changing the culture of this union from being a reactionary, defensive union to an aggressive and offensive-minded union,” Fain said during a Facebook livestream last month. “We have also made big changes in the way we do politics. … We will organize elected officials instead of being organized by them.”

Most notably, Fain decided to withhold the organization’s re-election of President Joe Biden, a longtime union ally, until he addresses the UAW’s concerns surrounding the industry’s transition to electric vehicles. Fain has also consistently spoken of doing “whatever it takes” to get members their “fair share,” including using work stoppages or strikes if necessary.

“Mr. Fain’s powertrain roots and comments since his swearing-in suggest the risk of tough negotiations is high, and we anticipate a strike could occur when the current UAW master agreement expires in mid-September.” , said John Murphy, an analyst at Bank of America Securities, in a June 22 note to investors.

BofA estimates that such a work stoppage would cost companies hundreds of millions of dollars a week in earnings before interest and taxes, potentially resulting in billions of dollars in losses for automakers.

Estimated weekly impact of a union strike per automaker

  • General Motors: $770 million, or 46 cents of adjusted earnings per share
  • Ford engine: $620 million, or 11 cents of adjusted earnings per share
  • Stellar: $470 million, or 12 cents of adjusted earnings per share

According to BofA Securities estimates.

During the last round of negotiations in 2019, a breakdown in negotiations between the Detroit automakers and the UAW led to a 40-day nationwide strike against GM. The automaker said the strike cost it about $3.6 billion this year.

Negotiations with Stellantis will officially start on Thursday, with Ford on Friday and with GM on July 18th. The current contracts expire on September 14th. The contracts apply to approximately 150,000 UAW members who work for the automakers.

In previous negotiations, after such initial meetings, the union would select one of the three target companies on which to focus its initial efforts by bringing the other negotiations to the table and renewing their contracts. However, Fain has not committed to such a process.

Many believe that Jeep parent company Stellantis, formerly Fiat Chrysler, will lead the talks after an indefinitely shut down an Illinois assembly plant in February over a possible closure. Fain and several newly elected UAW leaders also rose in the union ranks through Stellantis.

The union members who work for Stellantis are also some of the most outspoken and unhappy. Stellantis was the focus of a multi-year federal investigation by the UAW that resulted in 18 convictions, including two former union chairmen, and continued state oversight of the union.

Fiat Chrysler Automobiles assembly workers assemble the 2019 Ram pickup trucks at FCA’s Sterling Heights Assembly Plant in Sterling Heights, Michigan October 22, 2018.

Rebecca Cook | Reuters

Stellantis said in a statement that the company and the union “have a long history of working together and our intention is to continue this partnership.”

“Together, we must approach these negotiations with an open mind and a willingness to roll up our sleeves to find solutions that will result in a contract that is competitive in the marketplace, provides a path into the middle class for our employees, and meets the needs of.” our customers,” the company said.

GM and Ford released similar statements this week. Traditionally, companies do not comment on the details of the negotiations until the negotiations have been concluded.

What’s at stake?

Automakers have tried for decades to take fixed costs off their balance sheets. They continue to support variable bonuses like profit-sharing that are based on the company’s operations, rather than cost-of-living adjustments that depend on external factors like inflation.

Fain has campaigned steadfastly in this round of negotiations for the reintroduction of COLA as the union’s main issue, in addition to higher wages, the retention of a platinum health care package and the end of a rising or tiered wage system.

“United Auto workers are ready to get back into the fight against corruption, against concessions and against tariffs,” Fain said during a UAW negotiating conference soon after taking office. “The UAW is ready to get back into the fight for good jobs, for economic justice, for our families, and for our communities.”

Members of the United Auto Workers strike outside General Motors’ Detroit-Hamtramck Assembly Plant in Detroit, September 25, 2019.

Michael Wayland/CNBC

Under the current wage structure, UAW members start at about $18 an hour and go through a four-year “growth period” to reach a peak wage of more than $30 an hour.

Following the latest negotiations between the UAW and the Detroit-based automaker in 2019, the Center for Automotive Research predicted that current contracts, which expire in September, will reduce average hourly labor costs at Stellantis by $11 per worker and at GM and Ford would increase by $8 per worker. Those increases bring labor costs for the automaker to $66 an hour for Stellantis, $69 for Ford and $71 for GM, CAR said.

According to BofA’s Murphy, wage increases in this year’s negotiations for Detroit automakers could result in additional labor cost increases of between 25% and 30% over the next four years, based on recent UAW negotiations with non-auto companies such as: Deere & Co., Caterpillar And CNH.

In addition to wages, benefits and bonuses, the union also has its sights set on the auto industry’s transition to electric vehicles. Fain has called for a “just transition” for workers as the government uses taxpayers’ money to subsidize the electric vehicle industry.

A 2018 union study concluded that mass adoption of electric vehicles could cost the UAW 35,000 jobs. However, the union recently stated that the number could be lower.

“The federal government is pouring billions into the EV transition with no strings attached and no obligation to workers,” Fain said earlier this year. “The transition to electric vehicles is in serious danger of becoming a race to the bottom. We want the national leadership to support us in this before we make any commitments.”

battery workers

To complicate matters further, the UAW is also negotiating separate deals with Ultium Cells LLC, a joint venture between GM and LG Energy Solutions to produce batteries for the automaker’s electric vehicles near Lordstown, Ohio, where the company is located in the During the year, a large assembly plant closed last round of negotiations.

In a white paper released Monday, the UAW detailed some reported safety issues and concerns from workers at the plant. The union suggested that the nationwide GM agreement, including wages, could be a solution to address the site’s problems.

General Motors unveiled its all-new Ultium modular platform and battery system on March 4, 2020 at its Tech Center campus in Warren, Michigan.

Photo by Steve Fecht for General Motors

Ultium condemned the UAW’s report and depiction of the facility, calling the UAW’s description of safety concerns “knowingly false and misleading.”

“We strongly disagree with the UAW whitepaper and will provide a detailed response upon further review,” Ultium said in an emailed statement. “Ultium Cells is committed to re-opening negotiations with the UAW to address any specific concerns as well as the overall compensation package for our team members.”

According to Ultium, hourly workers currently make between $16 and $22 an hour with full benefits, incentives, and tuition support. In comparison, traditional UAW members can make more than $32 an hour on an hourly basis in GM factories.

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