Jeep maker Stellantis NV said Monday it has reached tentative agreements with the United Auto Workers on health and safety measures as a part of a new labor contract and was submitting its second economic proposal to the union.
The company declined to share details of the counter ahead of the Thursday evening expiration date of its current contract with the union. UAW President Shawn Fain has said without a tentative agreement in hand by then, UAW members will strike. Estimates from East Lansing consulting firm Anderson Economic Group suggest a 10-day strike at the automaker that also produces Chrysler, Dodge, Ram and other vehicles alone could cost the U.S. economy $1.183 billion.
“There is still more work to do, but we know that Stellantis and the UAW have a shared interest in these discussions: reaching an agreement that secures the future for our employees and their families,” Tobin Williams, senior vice president of human resources in North America, said in an email to employees. “We are on a good path and remain committed to reaching a tentative agreement without a work stoppage that would negatively impact our employees and our customers.”
During a virtual rally held by the Working Families Party, Fain said he had met with General Motors Co. and Ford Motor Co. over the weekend and was meeting with Stellantis on Monday. He characterized the discussions as “moving very slow, and we’ve got a long way to go in four days.”
In a statement on Monday, Fain said he is ready to negotiate in Detroit 24/7 after a flyer circulated that appeared to indicate Fain would be attending a rally on Wednesday in his hometown of Kokomo, Indiana.
“Despite receiving no response for over a month, when the CEOs are ready to make a serious offer we’ll be there, day or night,” he said. “It’s unfortunate the companies have waited until the last moments to get focused on the needs of 150,000 autoworkers, our families and our communities.”
The first proposal from Stellantis included 14.5% wage increases for most of its 43,000 employed UAW workers, inflation protection bonuses, a $20 per hour wage for part-time supplemental workers and an accelerated timeline to the top wage for full-time employees. The UAW countered Stellantis’ proposal on Sunday afternoon, Williams said.
Fain in a Facebook livestream on Friday criticized the wage offer as “deeply inadequate.” The union’s initial proposal included a 46% wage increase, pensions and retiree health care for all workers, cost-of-living wage adjustments and a 32-hour work week paid as 40 hours.
In an investor note, Wedbush Securities Inc. analyst Daniel Ives wrote that the strike risk is a “nightmare situation” for the automakers, especially GM and Ford, as they make the transition to electric vehicles.
“We spent time in Detroit a few weeks ago and sense a ‘very nervous time’ across the auto industry as there is a lot riding on these negotiations and with the recent UPS union deal sealed this puts more pressure on the UAW leadership to deliver a big win,” he wrote. “(Ford CEO Jim) Farley and (GM CEO Mary) Barra both face some tough decisions ahead and find themselves with the back against the wall as the options around facing a strike OR accepting a major cost intake for the next decade is a dynamic the Street will be closely watching.”
Stellantis’ second counter comes as it also announced the third tranche of its share buyback program. The automaker has hired an independent firm to buy up to $537 million (500 million euro) for the company between Monday and Dec. 11, which would cancel those common shares. The tranche is a part of a $1.6 billion (1.5 billion euro) program announced in February.
Stellantis shares closed up 2.5% Monday to $18.69 in New York. They gained 2.2% both in Milan and Paris.
Dividends and share buybacks, meanwhile, have been a target of criticism from the union during its contract campaign. The union has proposed a new profit-sharing proposal that would provide each worker $2 for every $1 million spent on share buybacks, dividends and increases to regular dividends. Under the current formula, Stellantis employees received a record $14,760 in profit sharing for 2022, pro rated to their compensated hours worked.
“Instead of rewarding the workers who spent long hours wrecking their bodies on the line to make these profits possible,” Fain said during a Facebook livestream last month, “the Big Three have funneled billions into stock buybacks schemes that artificially inflate the value of company shares, and further enrich company executives and the top 1%. That’s billions of dollars that have been robbed from the workers who made these profits possible.”
bnoble@detroitnews.com
Twitter: @BreanaCNoble