One of the Detroit three automakers, GM delivers hard-nosed message to UAW. The automaking giant is talking tough about united auto workers strike for wages. The United Auto Workers (UAW) President Shawn Fain’s wish list for striking workers is long but pay is one of the stickiest points when negotiating a deal with General Motors.
The UAW on record asking for wage increases of 40%, saying record profits at the big three demand a record contract. That’s a big ask that could cause the united auto workers strike to continue and potentially escalate.
United auto workers strike
General Motors’ President Mark Reuss on Sep 20 penned an opinion piece for the Detroit Free Press that took aim at claims its profitability gives it the financial firepower necessary to bump up wages significantly.
With Ford, Stellantis and GM being increasingly outspoken in rejecting the UAW’s demands that include a 40% pay hike, a 32-hour work week and an end to a tiered wage structure that pays newer workers less.
“The fundamental reality is that the UAW’s demands can be described in one word untenable,” said Reuss. “As the past has clearly shown, nobody wins in a strike. We have delivered a record offer. That is a fact.”
The stakes are high for both
Auto workers made concessions during the Great Financial Crisis to help U.S. carmakers stay afloat. Following years of improving profitability, though the united auto workers strike they’re looking for GM, Ford, and Stellantis to bridge the gap between worker wages and rising inflation-related costs.
A return to pensions that were dismantled for new workers during the Great Recession, a shorter 32-hour workweek, and cost-of-living increases are included on united auto workers strike wish lists. Getting the Detroit Big Three to sign off on those demands would be hard enough without the demand for a significant bump up in pay.
UAW’s President Shawn Fain argues that automakers’ profits over the past few years put them in a position to pay higher wages and still make money. However, GM’s Reuss argues that paying for wages would come at the expense of investments that allow General Motors to compete in a market experiencing significant change because of the shift from traditional internal combustion engine (ICE) vehicles to electric vehicles (EV).
GM competitors in EV market
GM competitors include Tesla (TSLA), the largest U.S. EV company, with a market share of 62%. GM’s EV market share totals below 5%. EVs currently represent about 7% of the total vehicles sold in the U.S. However, they’re expected to increase to over one-quarter of all vehicles by 2026.
If GM’s hope to capture EV market share, it will need to spend a lot of money developing, manufacturing, and selling new models over the next few years.
“Those record profits are reinvested in our company and our people. In 2022, GM had net income profits of $9.9 billion. In 2023, our capital spending will be $11-$12 billion. That’s not an aberration ― over the past ten years, our net income totaled $65 billion, and the amount we invested in that same period? $77 billion,” says Reuss.
What is GM offering UAW?
GM is offering UAW a 20% pay increase to continue making those investments. It believes that’s a very competitive offer, particularly given the company’s existing pay.
“About 85% of current represented employees would earn a base wage of approximately $82,000 a year. In contrast, the average median household income in nine areas where GM has major assembly plants is $51,821. And total compensation for the 85% of the workforce, with overtime and benefits, would be more than $150,000 a year,” says Reuss.
Reuss suggests that GM’s offer balances rewarding employees and maintaining the financial flexibility necessary to avoid losing market share to GM competitors like Tesla, Toyota. The sooner a deal is struck between GM and UAW, the less likely it is that General Motors will need to delay its initiatives, potentially paving the way for others to outmaneuver it.
Update: GM just laid off workers
As her latest news GM just laid off 2000 workers. GM said it was idling its Fairfax, Kansas, car plant on Wednesday because of a shortage of parts as a result of the nearby Missouri strike that will result in 2,000 hourly workers being temporarily furloughed.
Analysts expect more plants to follow if the walkout continues.
