In a prepared statement, GM said it made an offer Friday with “substantial movement in all key areas in an effort to reach a final agreement with the UAW and get our people back to work.”
The company says the offer will increase wages for most of its workforce to $40.39 per hour, or about $84,000 at the end of a four-year contract. That’s a 23% increase from the $32.32 an hour most factory workers earn. Compounded annually, this is 25%.
The company also said it has reinstated cost-of-living benefits for many employees that were abandoned in 2007, pushing the pay increase to more than 30% by September 2027. Previously, it had offered to contribute 8% of an employee’s salary to 401(k) defined contribution plans.
“It is time for us to complete this process, put our team members back to work and continue the task of making GM the company that will win for decades to come and provide great jobs in the U.S. for our people,” GM said. in his statement.
The UAW had no immediate comment on the increased offer, but had targeted a 36% increase over the four years. GM’s wage offer was similar to the wage offer previously made by Ford.
The union said in a statement that Fain’s update comes after “a week of intensive negotiations” with the company.
Marick Masters, a business professor at Wayne State University in Detroit, said GM’s offer has the potential to be a breakthrough that could lead to agreements to end the five-week labor strikes union against the manufacturer of GM, Ford and Jeep. Stellantis.
“That brings them closer together, and I don’t think it will take much from there” to reach an agreement, he said.
Fain will make a live video appearance Friday afternoon to update employees on the negotiations. He could call on more workers to strike and join the 34,000 people already out of work at six auto assembly plants and 38 parts distribution warehouses.
Fain will add more plants to the strikes depending on how much progress each company has made, Masters said. But he expects GM to be spared this round because of its latest offer.
Masters said that in order to reach all three deals, Ford and Stellantis will have to join GM in including future electric vehicle battery factories in the national UAW agreement. That would essentially ensure that the factories of the future would be represented by the union, a key point for the union.
Last week, before GM agreed to the battery plant terms, the union had threatened to close a GM plant in Arlington, Texas, that makes highly profitable large SUVs.
The union’s strikes at specific factories at each company began on September 15 and are nearing the start of their sixth week.
GM was scheduled to meet with the union on Friday. There were also meetings with Jeep maker Stellantis on Thursday.
On Thursday, GM posted a video indicating that negotiators are still some distance apart. “You might be wondering why General Motors can’t meet all the demands Shawn Fain is asking for?” Production manager Gerald Johnson said on the video. “The simple answer is that we need profits to invest in our future.”
At the time of the video, GM’s highest wage offer was $39.24 per hour in September 2027.
The UAW is also seeking the restoration of defined benefit pensions that workers gave up during the Great Recession, pension increases for retirees, an end to differential pay levels for workers and other issues. GM’s offer appears to put an end to the levels in the final year of the new contract.
Johnson went on to say that GM had net income of $65 billion over the past decade, but had invested $77 billion in the company. “If we don’t have those profits to continue our investments in our factories, our people and our products, we will face declining market share, an inability to finance the EV transition and an inability to compete with a growing number of competitors. here in America,” Johnson said.
Ford and Stellantis have made similar comments, with Ford saying it has reached the limit of how much it can spend to settle the strike.
However, the union says labor costs are only about 5% of the cost of a vehicle, and the companies can divert money from profits and stock buybacks to pay for wage increases that will cover inflation and make up for years of contracts without significant increases.
The strikes started with one assembly plant from each company after contracts expired on September 14 at 11:59 p.m. The union later added the parts warehouses, and then one Ford and GM assembly plant.
Last week, the union made a surprise move, escalating the strikes by adding a massive Ford pickup truck and SUV factory in Louisville, Kentucky.
About 23% of the union’s 146,000 members working at the three carmakers are on strike.
Stellantis said Friday it has canceled displays and presentations at the upcoming Specialty Equipment Market Association show and the Los Angeles Auto Show as strike costs continue to rise. Earlier this week, the company withdrew from the January CES gadget show.