General Motors (NYSE:GM), Thursday, presented a counteroffer to the United Auto Workers (UAW) union, aiming to prevent an expensive strike. However, the President of the United Auto Workers, Shawn Fain, called the proposal "insulting."
GM mentioned that they put forward an offer to the union ahead of the September 14 contract deadline, offering workers a 10% pay raise and two extra annual lump sum payments of 3% each over four years.
Fain, who represents 146,000 workers, said GM's offer was "an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers...The clock is ticking. Stop wasting our members’ time. Tick tock."
GM mentioned that the proposed wage increase is the most substantial one since 1999. Additionally, they are putting forward a one-time payment of $6,000 linked to inflation and $5,000 in bonuses aimed at safeguarding against inflation over the duration of the agreement. On top of that, there is a $5,500 bonus upon ratification.
GM also outlined that in their offer, current temporary employees will see a 20% raise, taking them to a wage of $20 per hour. Furthermore, the offer includes a plan to expedite the time it takes for permanent employees to reach their maximum wage rate, a move similar to proposals made by Ford (NYSE:F).
In a video shared on Thursday, GM President Mark Reuss emphasized the importance of securing a contract, saying “we need a fair contract that both rewards our employees and protects the long-term health of our business."
According to estimates by the Michigan-based Anderson Economic Group, if a UAW strike were to halt operations at the Detroit Three manufacturers, it could result in a collective financial impact exceeding $5 billion, affecting not only the carmakers but also their suppliers and the workforce.
The UAW took action last week, filing unfair labor practice charges with the National Labor Relations Board against both GM and Stellantis (NYSE:STLA). The union alleged that these companies refused to bargain in good faith.
The UAW's set of demands includes an immediate 20% wage increase, followed by four consecutive annual wage hikes of 5%. They are also advocating for defined-benefit pension plans to be extended to all employees, the implementation of 32-hour workweeks, and additional adjustments to wages based on the cost of living.
In addition, the UAW is pressing for the conversion of all temporary workers at U.S. automakers into permanent positions, a boost in profit-sharing arrangements, and the restoration of retiree health-care benefits and cost-of-living adjustments.
Shares of GM, F and STLA are down 1.21%, 1.12% and 0.38% respectively near end of day trading Thursday.