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Detroit weather this week12/11/2023 factories generally have hourly labor costs of $45 to $60, which includes what they spend on worker benefits. Analysts have said that foreign automakers with U.S. Wells Fargo Analyst Colin Langan estimated that the contracts would drive up the companies’ hourly total labor costs by about 30%, to $76.08 at Ford, $78.15 at GM and $75.63 at Stellantis. The study assumed a 20% increase in hourly labor costs. Yet with serious competition from nonunion automakers, GM, Ford and Stellantis could have trouble raising prices, Masters said.Ī study this month by Moody’s Investors Service found that annual labor costs could rise by $1.1 billion for Stellantis, $1.2 billion for GM and $1.4 billion for Ford in the final year of the contract. Ford said earlier that its deal with the union would raise labor costs by $850 to $900 per vehicle. Marick Masters, a business professor at Wayne State University in Detroit, said the contracts will cost the automakers billions and force them to cut costs elsewhere or raise prices. Ford agreed to a new contract last week and was followed by Stellantis on Saturday, which raised the pressure on GM to settle for essentially the same terms. It came during a furious few days of agreements that still need to be ratified by 146,000 UAW members at all three companies. Seeking to bring the talks to an end and facing an estimated $200 million per week in losses, GM CEO Mary Barra went to the union’s Detroit headquarters to finalize the deal. About 4,000 workers at GM’s Spring Hill, Tennessee, complex - the company’s largest - walked out Saturday night, threatening production of four vehicles and parts that supply nine other factories as far afield as Mexico. The GM pact came after the UAW added another plant to the list of those on strike against the company, ramping up the pressure to bargain on the last Detroit holdout. “When we return to the bargaining table in 2028, it won’t be just with the Big Three.” “One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said Sunday night while announcing details of the contract with Ford. “We wholeheartedly believe that our strike squeezed every last dime out of General Motors,” Fain said in a video Monday on X, formerly Twitter.įain said the agreements are large enough for the UAW to use them to recruit new members at nonunion factories owned by Tesla, Toyota and others. He decried what he called corporate greed, outrageous CEO salaries and a system where the union acted as a business partner with the automakers. “The companies are trying to figure out how to transition to EVs without losing too many billions of dollars, and now face a huge bump in labor costs for the products that will finance the EV transition.”įain, the first UAW president directly elected by members in the union’s 88-year history, campaigned against the union establishment by telling workers the companies are the enemy and the UAW would be at war with them. “The three tentative agreements show the UAW’s power and the car companies’ weakness,” said Erik Gordon, a business and law professor at the University of Michigan. And they come at a time when the auto industry is trying to fund a costly and historic shift away from the internal combustion engine to electric vehicles. Workers would get an immediate 11% pay bump upon ratification.īut analysts say the deals run the risk of forcing the automakers to raise prices beyond those charged by competitors with nonunion factories. If approved, it would also claw back some concessions the UAW agreed to almost two decades ago, when the automakers were in desperate financial shape.Īnalysts say Fain’s combative stance with the companies paid off for the workers, winning them pay and cost-of-living raises that would top 30% by the time the contracts expire in April 2028. The deal UAW President Shawn Fain closed on his 55th birthday is modeled on the ones agreed to with crosstown rivals Ford and Jeep-maker Stellantis, and would give workers higher raises than they’ve received in years. DETROIT (AP) - The United Auto Workers announced Monday that it reached a tentative deal with General Motors, capping a whirlwind few days in which GM, Ford and Stellantis agreed to generous terms that would end the union’s six weeks of targeted strikes, pending approval of the rank and file.
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