© Reuters. FILE PHOTO: Members of the United Auto Workers (UAW) union picket outside the General Motors Powertrain plant in Warren, Michigan, September 24, 2007. REUTERS/Rebecca Cook/File Photo
By Joseph White and Abhijith Ganapavaram
DETROIT (Reuters) -General Motors raised its offer to striking auto workers on Friday, matching Ford’s (NYSE ) proposed 23% pay raise and other benefit improvements, hours before union boss Shawn Fain spoke about the negotiations.
Chrysler parent Stellantis (NYSE ) is also raising its pay offer to 23%, matching GM and Ford, Bloomberg News reported.
“We have made substantial moves in all key areas in an effort to reach a final agreement with the UAW and get our people back to work,” GM said in a statement as the strike entered its fifth week.
“The majority of our workforce will earn $40.39 per hour, or approximately $84,000 per year at the end of the term of this agreement,” he said.
GM shares rose 1% in afternoon trading and Ford shares rose 1.1%.
More than 34,000 union members working at the three automakers are on strike since the strikes began on September 15.
GM’s latest offer shows Detroit automakers converging on similar offers that would increase UAW workers’ hourly wages by about 30% over the life of the deal, including cost-of-living payments. Ford, which had the best offer among the three, has said it is at the limit of what it can pay and remain competitive.
The union, which held its first simultaneous strikes against the three Detroit automakers, opened negotiations with a demand for a 40% wage increase. The demand included an immediate 20% raise, the elimination of different pay scales among UAW workers and the restoration of defined benefit pension plans. The union also demands that battery plant workers be covered by union agreements.
GM’s offer “suggests we may be in the endgame,” said Harley Shaiken, a labor professor at the University of California, Berkeley. “In effect, Ford has set the dimensions of the pattern, but GM is contributing to it. We have a long way to go, but clearly there is movement.”
The progress in talks followed the UAW’s surprise strike last week at Ford’s largest truck plant in Kentucky, which generates $25 billion in annual sales and accounts for about a sixth of Ford’s global automotive revenue. the company.
Fain described the Kentucky strike as a warning to GM and Stellantis, saying the union was ready to strike at GM’s Arlington, Texas, assembly plant, which makes the Cadillac Escalade, Chevy Suburban and other large, expensive SUVs.
GM said the new 23% across-the-board wage increase offer represents a compounded 25% wage increase over the life of the deal, with a 10% increase in the first year. With the increase in the cost of living, the supply exceeds 30%. GM’s previous offer was a 20% pay increase.
Additionally, it is now offering $21 an hour in wages to temporary workers, up from its previous offer of $20.
The UAW said in a statement that Fain will go on Facebook (NASDAQ:) live at 4 p.m. ET to update members on the negotiation after a week of “intensive negotiations” with the big three.
Ford declined to comment on GM’s offer and Stellantis had no immediate comment.
Ford has not yet talked about the joint venture’s battery plants being under the framework agreement, Shaiken said. “Clearly, GM wants to make a deal, but Ford feels it has a good template to begin with.”
Instead of the hammer blow of a mass strike that the UAW has historically undertaken, the union is strategically pitting companies against each other, using reprieves from expanding work stoppages as stimulus with different automakers.
Automakers have said union demands would significantly increase costs and hamper their electric vehicle ambitions, putting them at a disadvantage compared to electric vehicle leader Tesla (NASDAQ:) and foreign brands such as toyota (NYSE:), which are not unionized.
On Monday, Ford Chief Executive Bill Ford warned of the growing impact of the strike on the automaker and the U.S. economy.
Total economic losses from the UAW strike have reached $7.7 billion, according to the latest data from economic consulting firm Anderson Economic Group, with the Detroit Three suffering losses of $3.45 billion.
