UAW president calls GM’s contract counteroffer ‘insulting’: What’s in it

General Motors made its first contract proposal Thursday to negotiators for its 50,000 United Auto Workers-represented hourly workers that includes a 10% increase in hourly wages, among other things.

But UAW President Shawn Fain indicated the offer still falls short of the union's demands.

The proposal would partially eliminate tier wages, unlike a proposal last week from Ford Motor Co. to the UAW which did not address ending tiers as the union has pushed to do. Tiers are different pay rates for workers. Also, GM would give a 10% increase in hourly wages.

But the union, which is bargaining with all three Detroit automakers in separate talks, has asked for a 40% hourly wage increase across the life of the contract and the return of a cost-of-living adjustment (COLA) and pension plan. Fain said last week that Ford offered a 9% general wage increase over the life of the contract and instead of COLA, a one-time lump sum bonus. 

It was initially unclear whether GM offered to reinstate COLA, a pension program or address the union's push for a shorter work week, because GM did not offer that information in a highlight list provided to employees.

"We are not providing any other specific details beyond what is in the infographic and employee letter," GM spokesman David Barnas told the Detroit Free Press.

But in a UAW bulletin to members late Thursday, the union said that GM rejected reinstatement of COLA, increases to retiree pay, all pension proposals and the union's job security proposals, which includes the right to strike over plant closures. It also said GM rejected most quality-of-life proposals such as a shorter workweek. The union said GM would not agree to the UAW's proposal to end tier wages after a 90-day progression to the top wage.

In a statement Thursday, Fain called the proposal "insulting," saying GM either "doesn't care or isn't listening when we say we need economic justice at GM by 11:59 p.m. Sept. 14. The clock is ticking. Stop wasting our members' time. Tick tock."

The current contract expires on Sept. 14 and Fain has been firm that he wants a contract from all three carmakers by that time and will not accept a contract extension, which could mean a strike.

More paid time off

GM presented the counteroffer around 10 a.m. Thursday to UAW leaders. It comes just days after the UAW filed unfair labor practice charges against GM and Stellantis. The National Labor Relations Board is investigating those charges now and the outcome could impact a potential strike.

"After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers," Fain said in a statement to the Detroit Free Press, part of the USA TODAY Network.

In a letter to the employees midmorning, which GM provided to the Free Press, GM wrote, "Our offer includes well-deserved wage improvements that far exceed the 2019 agreement and reward you for your hard work. We still have work to do, but we wanted to make this offer to show our good faith efforts to keep the process moving."

For all hourly employees, GM said it will recognize Juneteenth as a paid holiday, giving a new total of 16 to 18 paid holidays per year. Ford declined to recognize Juneteenth as a paid holiday, Fain has said. GM hourly employees would also receive a $5,500 bonus for ratifying the contract, which matches Ford's offer.

The big highlights

Here are the GM highlights for UAW-represented employees who are now at the maximum wage rate:

• 10% increase in wages. GM said it is the largest wage increase since the 1999 contract and 67% higher than 2019 and 2015.
• Two additional 3% lump sum payments resulting in a total increase of 16%.
• $6,000 one-time inflation-recognition payment.
• $5,000 in inflation-protection bonuses over the life of the agreement (in-progression employees are eligible).

Ford offered a 9% hourly wage increase with most of it to take effect in the first year, with 6% lump sum awards for a 15% total increase compared with GM's 16%. Ford said that means wages (including overtime) and lump sum bonuses for hourly workers would increase from an average of $78,000 a year in 2022 to $92,000 in the first year of the contract.

"Ford’s proposal not only fails to meet our needs, it insults our very worth," Fain said in a Facebook Live presentation to members last week.

For GM's temporary and in-progression hourly employees, here are the highlights:

• Current entry-level in-progression employees earn a 56% wage rate increase over the contract.
• Current temporary employees will receive a 20% increase to $20 an hour wage.
• Eliminate two progression steps, which reduces the time to reach the maximum wage rate by 25% and provides double-digit wage increases for all in-progression employees from the beginning of the contract.

Prepared to work more toward an agreement

The GM proposals do not include a COLA provision, but rather provides two lump sum payments totaling $11,000, labor expert and Wayne State University business professor Marick Masters said. These payments do not affect the base wage rate, but COLA does add to the base wage rate if it is negotiated into the contract.

"GM's proposals substantially mirror those made by Ford, with some modest increases. It is noteworthy not only for what GM mentions but what it does not address on the list of the UAW members' demands," Masters said. "Fain's categorical rejection of the proposals as 'insulting' leaves GM and Ford in the same substantive position relative to the union."

Masters said the parties are not close to an agreement at the moment, adding that "a major breakthrough may occur, but seems unlikely."

The automakers will likely have to give more to the UAW for the union to feel it is getting some of its past concessions back, said Harley Shaiken, professor emeritus at the University of California, Berkeley.

"A troubling paradox has fueled anger among many UAW workers: Record corporate profits over the last decade or so accompanied by stratospheric rises in executive salaries, on the one hand, and painful temporary concessions for workers becoming the new norm on the other," Shaiken said. "These angry sentiments on the line and in the plants are fueling the rhetoric that is coming from UAW leaders."

In a video posted Thursday to www.gmnegotiations2023.com, GM Executive Vice President of Global Manufacturing Gerald Johnson said these are just the highlights of the proposal and there are many more details.

"Our offer includes guaranteed wage increases and a higher starting wage and an accelerated path to top wages for in-progressive team members," Johnson said. "We're also proud to be offering more paid time off including Juneteenth and we're making no change to our health care premiums."

GM President Mark Reuss said in the video that GM has an "incredible future" with several new product launches but the competition is fierce, which is why GM needs to reach a fair contract that "both rewards our employees and protects the company."

"These negotiations are serious and they matter," Johnson added. "The outcome impacts all of us. Today is an important step to reaching the agreement. This is a negotiation process and we're prepared to work long and hard" to reach an agreement.

Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.