GM improves wages and benefits for employees

General Motors CEO Mary Barra speaks to reporters after meeting with lawmakers from Michigan and Ohio at the U.S. Capitol on June 5, 2019 in Washington, DC.

Chip Somodevilla | Getty Images

DETROIT – General Motors is trying to head off a threatened strike by the United Auto Workers union with a new offer on Thursday that includes, among other things, significant wage increases, more vacation days and better benefits for retirees.

The proposal, which GM CEO Mary Barra called “compelling and unprecedented,” addresses many of the union’s demands but continues to fall short of expectations on others, such as a 40 percent wage increase over the UAW’s four-year term.

GM released details of the deal about nine hours before the UAW launched targeted attacks against GM. Ford engine And Stellantis if no offers are received by 11:59 p.m. ET on Thursday.

“We are at a crossroads in our journey to building a company that can support us all for decades to come,” Barra said in a public letter. “Today we have put on the table a compelling and unprecedented economic package that reflects the importance of this critical moment.”

GM’s latest offer complies with several provisions of a Ford proposal released by the UAW last night. Yet it falls short of the union’s public demands in several important respects.

Automakers warned Thursday about the potential impact of complying with the UAW’s terms.

Ford sources said the automaker would have lost $14.4 billion over the past four years if current demands had taken effect, instead of posting a profit of nearly $30 billion. UAW President Shawn Fain appears determined to enforce these conditions.

The sources, who agreed to speak on condition of anonymity because of ongoing discussions, also pushed back on the UAW’s argument that members don’t earn a living wage. They said that under Ford’s current proposal, average compensation for first-year UAW employees would be $132,000, including $92,000 in cash and $17,500 in health insurance coverage.

Here are the key parts of Thursday’s GM offer:

  • Wages: A 20% increase over the four-year term of the contract, with a 10% increase in the first year. That’s an increase from the 18% in GM’s last offer. The UAW has asked for a 40% raise over the life of the contract, which it says is in line with pay increases for Detroit automakers’ CEOs in recent years.
  • Faster Path to Top Wages: Under the current contract, newly hired workers will receive gradual pay increases over time, reaching top wages within eight years. GM’s proposal shortens that deadline to four years. The UAW has called for an end to the tier system.
  • Inflation Protection: GM’s offer includes indefinite cost-of-living protection for top-wage workers, meaning wages will rise to keep pace with inflation, at least in theory. The union called for a return to a more generous system of the past.
  • Job Security: GM promises not to close any of its U.S. manufacturing or warehouse facilities during the term of the contract.
  • Work-life balance: GM previously proposed recognizing June 19 as a holiday. Up to five weeks of vacation and two weeks of parental leave are now planned. That’s in line with Ford’s Wednesday offer, the only proposal at the time that included parental leave. The UAW has called for more time off, including a four-day week.

“We are working diligently and have proposed another, increasingly strong offer with the goal of reaching an agreement this evening,” Barra said in the letter. “Remember: We had a strike in 2019 and no one won.”

The union’s key demands included a 40% increase in hourly wages, a shortening of the 32-hour week, a return to traditional pensions, the elimination of pay scales and the reintroduction of cost-of-living adjustments, among others.

Ford’s latest proposal calls for a 20% wage increase over the four-year contract; ratification bonuses of $6,500; Abolition of wage levels in two components and parts plants; a cost of living adjustment; Halving the time to reach full pay for four years; and other benefits.

This is a developing story. Please check back for more details. GM improves wages and benefits for employees

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