The chief operating officer in North America for the maker of Jeep SUVs and Ram pick-up trucks on Friday called the United Auto Workers’ initial set of demands in contract negotiations a “losing proposition” that could risk jobs.
The email from Mark Stewart at Stellantis NV came almost three days after UAW President Shawn Fain used a Facebook livestream to toss a July offer from the automaker into his office trashcan, depicting how far apart the parties are just over a month from the Sept. 14 expiration of their current contract covering around 43,000 members.
The union earlier this month advanced a proposal seeking a 46% increase in wages over four years, a 32-hour work week paid like 40 hours, expanding pensions and retiree health-care coverage to all, cost-of-living adjustments and more. Estimates have placed the cost for wages and benefits at more than $100 per hour per worker.
Today, hourly all-in labor cost for the Detroit Three hovers around $65 per hour, according to industry estimates. Average hourly all-in labor cost at Stellantis is approximately $63 per hour, according to a source familiar with the information. That figure is roughly $55 per hour for workers at foreign automakers manufacturing in the United States, known as “transplants,” and around $45 per hour at electric vehicle maker Tesla Inc.
“What is critical to our continued success is finding solutions that protect Stellantis from today’s challenges including the lower cost structure of the U.S. transplants and other competitors as well as the additional cost of electrification,” Stewart wrote in the email. “We can’t let either get in the way of creating affordable vehicles for our customers.
“In addition, agreeing to Mr. Fain’s demands could endanger our ability to make decisions in the future that provide job security to our employees. This is a losing proposition for all of us — employees, families and customers.”
Stewart said he was “disappointed” with Fain’s “theatrics and personal insults.” He didn’t respond directly to Fain’s accusation that Stellantis’ proposal was “concessionary,” but said the company is seeking to reach an agreement “based on realism” for the company’s long-term health and rewarding employee contributions.
“These negotiations are critical and require cool heads and a focus on reality from everyone involved,” Stewart said. “Our negotiators are listening to the union’s position and seeking to understand their point of view. We expect the same courtesy and professionalism from Mr. Fain.”
The UAW didn’t have an immediate response to Stewart’s letter.
Stellantis’ July 27 offer emphasized high rates of absenteeism, especially that is unplanned. It sought to tie wage increases, profit sharing and supplemental unemployment benefits to workers showing up for work. It seeks greater employee cost sharing for health care and the creation of a new worker classification that would allow for an alternate, more flexible schedule.
Stellantis posted a record $15.2 billion in adjusted operating income in North America in 2022 and $8.88 billion in the first half of 2023. For 2022, Stellantis workers received $14,760 in profit sharing, the most of the Detroit Three’s UAW-represented employees, though supplemental workers aren’t eligible to receive the checks.
