As UAW strike looms, what to know about contract talks, Big Three finances

• Contract negotiations continue between the United Auto Workers and the Big Three automaker
• The UAW said each company has put forth losing offers, and it continues to prepare to strike
• The automakers, meanwhile, show increased profits for the first half of 2023

Sept. 19: Fain pushes back as Trump plans Michigan trip to court UAW
Sept. 15: UAW strike sets Michigan on uncertain path: ‘We’re nervous’
Sept. 14: UAW-automaker standoff prompts worries over Michigan's place in new economy

The Big Three automakers and United Auto Workers continue to say they’re at a stalemate over contract negotiations, with each heading toward a potential showdown this week.

Contracts with about 150,000 hourly workers expire at 11:59 p.m. Thursday (Sept. 14) at Michigan-based Ford Motor Co. and General Motors, as well as Stellantis, the Dutch parent company of the former Fiat-Chrysler whose North American headquarters is in Auburn Hills.

Each of the auto companies has publicly responded to the UAW’s demands that include higher pay, the end of a two-tiered wage system for newer workers, restored pension benefits and job security amid factory reconfiguration and closures. 

Related:

• UAW strike 2023 update: autoworkers strike date, contract expiration, demands, Stellantis, GM, Ford
• By the numbers: How many UAW members in Michigan, how much would strike cost
• Michigan braces for UAW strike as contract negotiations head to final week
• Report: UAW strike against Michigan’s Big Three could cost economy $5.6B
• Survey: Young workers sour on auto industry jobs, in another blow to Michigan

UAW President Shawn Fain told CNN there has been progress, but it “is still slow.”

Fain said his members are ready to strike because record industry profits haven’t been shared fairly with workers. The UAW seeks a 32-hour workweek with 40 hours pay and a 46 percent bump in compensation over the next four-year agreement.

“We are not going to stand by and allow you to drag out negotiations like you have in the past,” Fain said last week, addressing auto companies during a Facebook video. 

Fain and the union have leverage because automakers recorded record profits in 2022, even as total auto sales reached their lowest point since 2011, according to research firm Wards Intelligence. That’s because the price of cars has skyrocketed, reaching an average of $48,000, up from $36,000 in 2017.

Autoworkers represent about 40 percent of national UAW membership, according to the Detroit News.

Fain’s next Facebook live event is at 5 p.m. Wednesday.

Here are the latest details on contract negotiations.

The offers

Ford released a public contract offer on Aug. 31, saying it would eliminate the two-tier wage system and elevate temporary worker pay. About 3 percent of its production workforce is temporary, the company said, and it promised to bring that pay up to $20 per hour.

The company said wages and lump sum bonuses for Ford’s UAW-represented hourly workers would increase from $78,000 on average in 2022 to $92,000 in the first year of the contract. 

However, that figure includes overtime. A worker at that level would receive health care coverage worth $17,500 and other benefits worth an additional $20,500 in the first year, Ford said.

The automaker also would add a $12,000 cost-of-living adjustment over four years, with about half paid in the first year. 

UAW response:  Fain on Friday says the offer  “insults our very worth.”

“Our demands are ambitious, but I’ve told the companies repeatedly, I’m not the reason that members’ expectations are so high. What’s driving members’ expectations are the Big Three’s profits,” Fain said. 

General Motors: The company released a public counterproposal last week proposing up to 56 percent in pay increases over four years for newer workers, along with a $20 per hour starting rate for temporary workers. 

Workers at the top tier of pay would receive a 10 percent wage increase, and two 3 percent lump sum bonuses. They also would receive a $6,000 inflation bonus.

All UAW members would also receive a $5,500 ratification bonus.

UAW Response: “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 last week.

Stellantis: Chief Operating Officer Mark Stewart on Friday, September 8,  announced “tremendous progress” in negotiations. 

On Monday, the Associated Press reported the company says more progress has been made, notably in health and safety issues. Wage increases over four years would total 14.5 percent, with no lump sum payment. So-called inflation protection payments were offered at $6,000 for the first year and $4,500 over the final three years. 

Supplemental workers, or those called in as needed, would get wages starting at $20 per hour, up from $15.78.

UAW response: “The wage proposal doesn’t make up for inflation, let alone make up for past losses,” the union said Friday.

As negotiations continue, here are some key financial metrics for the automakers and performance as of mid-year 2023, according to their most-recent filings and other available data.

Profitability in the first half of 2023:

Ford: $3.7 billion

Highlights: That gain is up from a loss of $2.4 billion in the first half of 2022, when the automaker recorded a loss on its investment in electric vehicle manufacturer Rivian. Ford revenue reached $86 million, up 16 percent from the first half of 2022.

GM: $4.9 billion

Highlights: Revenue reached $84.7 billion, up 18 percent. 

Stellantis: $12.1 billion 

Highlights: North America is the company’s largest segment, accounting for $8.1 billion of the first half’s net income, an 8 percent increase. Globally, first-half profits were up 37 percent in the first half and set a company record for revenue at $109 billion. Profitability was credited to higher shipments. Global inventory was at 1.37 million vehicles, up from 845,000 a year ago.

Full-year outlook, according to each company’s public filings:

Ford: Full-year adjusted earnings projections were raised in June to $11 billion to $12 billion, up from $9 billion to $11 billion.

GM: Full-year adjusted earnings were raised to $12 billion to $14 billion, up $1 billion from the end of the first quarter.

Stellantis: The company in July forecast a double-digit adjusted operating income along with positive cash flow. 

CEO to worker pay ratio compensation:

Ford: The average employee earned $74,691, while CEO Jim Farley’s compensation was  $20,996,146. The ratio of CEO pay to all employees was 281 to 1.

GM: The average employee earned $80,034, while CEO Mary Barra’s compensation was  $28,979,570. The ratio of CEO pay to all employees was 362 to 1. 

Stellantis: The average employee earned $67,887, while CEO Carlos Tavares’ total compensation was $24.8 million. The ratio of CEO pay to all employees was 365 to 1.

Overall sales in first half of 2023

Ford: Ranked 3rd, ahead of No. 4 Hyundai/Kia. Sold just under 1 million light vehicles, for a 9.9 percent increase over 2022.

GM: Ranked 1st, ahead of Toyota. Sold 1.28 million light vehicles, an 18 percent increase.

Stellantis: Ranked 5th. Sold 806,810 light vehicles, a decrease of 1.3 percent.

EV sales in first half of 2023

Ford:  25,709 (up 10 percent); about 2.7 percent of its sales, according to Inside EVs

GM: 36,322 (up 373%) and about 2.8 percent share of its sales

Stellantis: Global sales up 24 percent to 169,000 vehicles.. The brand is the third largest EV maker in Europe.

Year-to-date stock change as of opening price on Tuesday, September 12:

Ford [NYSE: F]: $12.23,  up 4.7 percent

GM [NYSE: GM] $32.76, down 3.13 percent

Stellantis: [NYSE: STLA] $19, up 30 percent

U.S. Market share totaled 40.7 percent at year-end 2022: 

Ford: 13.8 percent

GM: 17.1 percent

Stellantis: 9.8

Available cash in the first half: 

Ford: $7.8 billion in cash flow from operating activity, up $6 billion from a year earlier. By year-end, it forecasts between $6.5 billion and $7 billion, alongside capital expenditures of $8- to $9 billion. 

Ford also obtained a one-year  $4 billion credit line with JP Morgan Chase on August 17. According to filings, the funding provides “additional working capital flexibility to manage through uncertainties in the present environment.”

GM: $9.3 billion, up 83 percent from the first half of 2022, when it was $5.1 billion.

Stellantis: About $9.3 billion, up about $3.5 billion from 2022.