Stellantis offers 14.5% pay increase to UAW, days before possible strike

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Demonstrators during a United Auto Workers (UAW) practice picket outside the Stellantis Mack Assembly Plant in Detroit, Michigan, US, on Wednesday, Aug. 23, 2023.
Jeff Kowalsky | Bloomberg | Getty Images

Stellantis on Friday offered significant four-year wage increases to its hourly workers represented by the United Auto Workers, as it scrambles to avoid a costly strike.

The automaker’s offer would provide a 14.5% wage increase over the four-year term of the proposed deal for most of Stellantis’s roughly 43,000 UAW-represented hourly workers. Newer, or in-progression, employees would get a 27% boost to their starting wages and a shorter time period – six years, versus eight years under the current deal – to advance to the maximum wage rate.

The current contracts between the United Auto Workers and the three Detroit automakers will expire at 11:59 p.m. on Thursday. UAW leaders have threatened strikes if no deal is in place by that time. The UAW has never in its history called major strikes against all three Detroit automakers at the same time.

Stellantis’ offer also provides its UAW-represented employees with a $6,000 one-time “inflation protection payment” in the first year of the deal, 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 deal.

“This is a responsible and strong offer that positions us to continue providing good jobs for our employees today and in the next generation here in the U.S.,” said Mark Stewart, chief operating officer of Stellantis’ North America unit. “It also protects the Company’s future ability to continue to compete globally 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 getting a deal before the deadline. If no agreement is reached, the union will take appropriate action, he said.

Stellantis’ proposed wage increase is larger than those offered to the union by rivals General Motors and Ford Motor, which offered raises of 10% and 9%, respectively. The two companies also put forward additional ratification bonuses that Stellantis didn’t offer.

But the proposed deal still falls well short of the union’s demands, which include a 40% hourly pay increase, a 32-hour workweek, and restoration of traditional-style pension plans, among other items. Only about 30% of Stellantis’s UAW-represented workers — those hired before October 2007 — have pension plans now.

UAW President Shawn Fain dismissed the offers from both GM and Ford as insufficient. He called GM’s offer, presented on Thursday, “an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers.”

UAW members voted overwhelmingly last month to grant union leaders the authority to call strikes if warranted.

— CNBC’s Mike Wayland contributed to this story.

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