General Motors Offers New Economic Package to UAW

General Motors (GM) has made a new offer to the United Auto Workers (UAW) in an attempt to avoid a strike that the union says will begin at midnight. GM CEO Mary Barra described the offer as “a compelling and unprecedented economic package.” The new offer includes a 20 percent wage hike over the four-year contract, with 10 percent in the first year.

Barra emphasized the importance of continued investment in order to maintain competitiveness in the automotive market. She warned that if GM does not invest, they will quickly lose ground to non-union competitors. UAW President Shawn Fain responded to the offer, stating that they are reviewing it and wished GM had shown this level of seriousness in bargaining earlier.

Ford Believes Strike Chances are High

Meanwhile, sources from Ford stated that the company believes the chances of a strike are “very high.” There has been limited bargaining activity in the final day before the deadline, and the UAW has yet to engage with Ford about the specifics of their latest offer. Ford’s offer includes a $3,000 bonus for workers who had to wait eight years to reach the top of the wage scale.

Proposals for Retirement Security and Compensation

GM has proposed a “retirement security” contribution of $500 to retirees and $1,000 to an active employee defined-benefit program. Ford’s latest offer would raise total worker compensation, including health care and other benefits, to $132,000 per year. The UAW’s initial demands, if met, would result in total compensation per employee of $286,800 per year.

Concerns of Bankruptcy and GM’s Investment

Ford CEO Jim Farley expressed concerns that the UAW’s proposal could bankrupt the company. He stated that if the proposed wage hike and additional benefits had been in effect since 2019, Ford would have lost about $15 billion and gone bankrupt. GM’s executive vice president of global manufacturing and sustainability, Gerald Johnson, shared that GM has heard over 1,000 union demands, which would cost over $100 billion, an unreasonable figure for the company to absorb and still compete.

GM’s Latest Offer and the Goal of Avoiding a Strike

GM’s latest offer includes two weeks of paid parental leave and up to five weeks of paid vacation, matching Ford’s proposal. Barra wrote a letter to employees, stating that they have worked diligently to deliver a better package with historic wage increases and manufacturing commitments. She reminded them of the negative consequences of the 40-day strike in 2019 and expressed the desire to reach a deal without another walkout. Barra called for a new history to be made that benefits all parties involved.

Reuters contributed to this report.