UAW Expected to Counter Ford’s Contract Proposal

The UAW expects to present a counterproposal to Ford today as contract negotiations between the union and Detroit’s three automakers begin to pick up momentum ahead of a Sept. 14 strike deadline, which the UAW says is set in stone.

Ford last week set out a proposal offering a 9% pay increase and shortening the time it takes new employees to reach full pay – a key union demand. However, the company’s proposal was inadequate, according to UAW President Shawn Fain, who says it includes changes that would have amounted to concessions by the union and fails to address UAW concerns about “work-life balance.”

Speaking on background with reporters, though, a union official says Fain is willing to sit in on the bargaining at Ford in effort to get the negotiations moving. “We are offering an economic update,” says the UAW official, who requested anonymity. “We are very serious about getting a deal.”

Union officials are declining to describe Ford as the UAW’s target in this year’s negotiations. Over the years, the UAW has often selected one company as the focus as the deadline approaches. In 2019, the UAW’s target was General Motors prior to a 40-day strike (pictured, below).

UAW 2019 strike (United Steelworkers)

Fain could be facing some internal pressure to focus on Ford first. During the union’s bargaining convention this past spring, several local leaders from UAW Local 600 in Dearborn, MI, told Wards they expected Ford to be the target this time around.

Chuck Browning, the UAW vice president in charge of the union’s Ford Department, also notes the union has some critical concerns revolving around the automaker’s plans for new electric-vehicle and battery plants in Tennessee and Kentucky. “We’re going to have to work through that,” says Browning. “They’re naïve if they don’t expect that.”

For its part, Ford suggests it would be willing to become the union’s target for a potential settlement. Earlier this summer, Ford announced plans to spend upwards of $1 billion on upgrades to its plants, including adding air conditioning in some key factories.

“We are committed to creating opportunity for every UAW worker to build a great career and become a full-time permanent Ford employee with good middle-class wages and benefits,” Ford says in a statement. “We continue to negotiate with the UAW and build on our strong track record of creative solutions as our dramatically changing industry needs a skilled and competitive workforce more than ever.”

Meanwhile, officials from GM also confirm the automaker expects to make a counterproposal to the union as soon as today. Demands presented by the union to GM include a 40% pay increase, a 32-hour work week, an end to tiered wages and a restoration of defined-benefit pensions for employees hired after 2007.

Gerald Johnson, GM executive vice president for manufacturing, says the automaker expects to offer its employees a raise. But the company says it cannot sign an agreement that interrupts its manufacturing momentum as it builds more EVs.

Stellantis says it intends to present a counter-offer to the UAW’s economic demands by the end of the week. “We look forward to continuing our discussions to reach an agreement that better positions the business to meet the challenges of the U.S. marketplace and secures the future for our employees, their families and our company,” the automaker says.

Fain’s advocacy for 146,000 auto workers has been punctuated by sharp attacks on executive compensation and his demands for big pay increases that reflect the automakers’ profitability over the past decade. The UAW’s demands have been categorically panned by Wall Street analysts, who describe them as unrealistic and unaffordable. But they are not out of line with other major contract settlements across the economy. Dock workers on the West Coast negotiated a 32% pay increase and UPS drivers represented by the Teamsters union will see their wages reach $49 per hour.

Fain has indicated the union is preparing to take the unprecedented step of striking all three automakers if there is no tentative settlement when the current four-year contracts expire next week. Hourly workers last month voted by overwhelming margins to authorize strikes.

President Joe Biden is offering some assistance that could make a settlement possible. With the automakers expressing concerns about the enormous cost of the transition to electrification, the Department of Energy plans to make available $12 billion in grants and low-cost loans to retool existing plants for EV production.

“The announcements show that President Biden understands that building the cars of the future also necessitates helping the communities challenged by the transition away from the internal combustion engine,” says Energy Secretary Jennifer Granholm.

The Energy Department says it plans to invest a separate $3.5 billion to boost U.S. production of advanced batteries and battery materials to support the country’s transition to EVs and clean energy.

The administration’s announcement of grants and loans was hailed by the UAW, which has been pressuring the White House to ensure the transition to EVs is worker-friendly.

“We are glad to see the Biden Admin. doing its part to reject the false choice between a good job and a green job,” Fain says. “This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won.”