Stellantis offers the UAW a raise days before a possible strike

Protesters during a United Auto Workers (UAW) practice demonstration in front of the Stellantis Mack Assembly Plant in Detroit, Michigan, USA, on Wednesday, August 23, 2023.

Jeff Kowalsky | Bloomberg | Getty Images

Stellantis on Friday offered significant four-year pay increases to its hourly workers represented by the United Auto Workers union as the company fights to avoid a costly strike.

The automaker’s offer would represent a 14.5% wage increase over the four-year term of the proposed contract for most of Stellantis’ approximately 43,000 hourly workers represented by the UAW. Newer or transitioning workers would receive a 27% increase in their starting wages and a shorter period of time — six years instead of eight years under the current plan — to advance to the maximum wage rate.

The current contracts between the United Auto Workers and the three Detroit automakers expire Thursday at 11:59 p.m. UAW leaders have threatened strikes if an agreement is not reached by then. The UAW has never in its history called for major strikes against all three Detroit automakers at the same time.

Stellantis’ Offer also offers its UAW-represented employees a one-time “inflation protection payment” of $6,000 in the first year of the agreement and a total of $4,500 in additional payments over the following three years.

The proposal would also make Juneteenth a paid holiday for workers covered by the agreement.

“This is a responsible and strong offer that positions us to continue to provide good jobs for our employees here in the U.S. today and into the next generation,” said Mark Stewart, chief operating officer of Stellantis’ North America unit. “It also protects the company’s future ability to remain globally competitive in an industry that is rapidly transitioning to electric vehicles.”

UAW Vice President Rich Boyer told CNBC that negotiations are ongoing and will continue in hopes of reaching an agreement before the deadline. If no agreement is reached, the union will take appropriate action, he said.

Stellantis’ proposed pay increase is larger than the 10% and 9% raises offered to the union by rivals General Motors and Ford Motor, respectively. The two companies also proposed additional ratification bonuses, which Stellantis did not offer.

However, the proposed deal still falls far short of the union’s demands, which include a 40% increase in hourly wages, a 32-hour work week and the restoration of traditional pension plans, among other things. Only about 30% of Stellantis workers represented by the UAW – those hired before October 2007 – now have retirement plans.

UAW President Shawn Fain dismissed GM and Ford’s offers as inadequate. He called GM’s offer on Thursday “an insulting proposal that does not come close to a fair deal for America’s autoworkers.”

UAW members voted overwhelmingly last month to give union leaders the authority to call strikes if necessary.

—CNBC’s Mike Wayland contributed to this story. Stellantis offers the UAW a raise days before a possible strike

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