According to reports, the United Auto Workers (UAW) hopes to obtain at least a 30% wage increase from Detroit's three major automakers through the strike. That's the level the union believes will satisfy existing members and organize non-unionized plants, and it's less than the roughly 40% wage increase it initially requested from Ford Motor Co, General Motors Co and Stellantis NV. This level takes into account cost-of-living allowances and general wage increases.
The automaker's shares were boosted by the news. Shares of General Motors and Stellantis NV each rose 2.5% on Thursday, while Ford gained 1.4%. Shares of GM and Ford have fallen sharply since July amid uncertainty over the talks. The exception is Stellantis NV, which is up 36% year to date. A wage increase of at least 30% is expected to generate interest among non-union autoworkers and help increase union membership.
The union's president, Shawn Fain, is working to expand the UAW by organizing workers at future electric vehicle battery plants, Tesla (TSLA) and Asian and European automakers' U.S. factories, two people familiar with the matter said. The union's membership has dropped from more than 1 million in the 1970s to 400,000.
At this time, a UAW spokesman declined to comment. General Motors, Ford and Stellantis NV also declined to comment.
Ford has proposed a 20% salary increase, plus a living allowance. The UAW also lowered its demand for a pay increase to 36 percent. If the cost of living gives workers an additional raise, the gap between the two sides on the wage issue will be even smaller. A UAW source said the union filed an objection with Stellantis NV on Thursday.
Wage increases are a complex puzzle that also includes how much automakers will invest in their factories to secure UAW jobs. Other issues include future compensation and retirement benefits for battery plant workers, including the union's demand for a return to traditional pensions. Every part must satisfy all parties or the agreement will fall apart.
The UAW strike began on September 15, the first time it targeted all three companies simultaneously. Shawn Fain said he would expand the strike on Friday if the companies don't make progress at the bargaining table.
Shawn Fain called on workers at 38 GM and Stellantis NV parts distribution facilities to go on strike last week, saying talks were making too little progress.