GM offers 20% raises to UAW in final hours before deadline

General Motors on Thursday made a new offer to the UAW that it called "a compelling and unprecedented economic package," but negotiators from the Detroit 3 were running out of time to avoid a strike that the union says will begin at midnight.

GM CEO Mary Barra said the automaker's latest offer includes a 20 percent wage hike over the course of the four-year contract, with 10 percent in the first year. Ford Motor Co. offered the UAW 20 percent raises over four years on Tuesday.

“Make no mistake: If we don’t continue to invest, we will lose ground, and it will happen fast,” Barra told employees in a video posted Thursday evening, calling GM’s workforce a competitive advantage. “Our competition across the country and around the world — most of whom are non-union — will waste no time seizing the opportunity we’ve handed them.”

UAW President Shawn Fain, in a statement responding to GM, said, "We're actively reviewing GM's latest proposal, and look forward to submitting our responses. We wish they would've gotten this serious about bargaining six weeks ago, instead of hours before the deadline."

Meanwhile, Ford sources said Thursday afternoon that the company believes chances of a strike are "very high," noting that there had not been as much bargaining activity in the final day before the deadline as officials had hoped.

The sources, who spoke on condition of anonymity because the details were not yet public, declined to characterize the latest proposal as Ford's final offer but said the UAW had yet to engage the company about the specifics.

Ford's latest offer includes a $3,000 bonus for workers who had to wait eight years to reach the top of the wage scale, the sources said. Ford, GM and Stellantis now are offering to cut that grow-in period by half, to four years.

GM also on Thursday said it proposed a "retirement security" contribution of $500 to retirees and $1,000 to an active employee defined-benefit program.

The Ford sources said the company's latest offer would raise total worker compensation including health care and other benefits to $132,000 per year, from the roughly $112,000 per year it is today.

They said if the UAW got everything it asked for in its initial demands to the automakers last month, total compensation per employee would rise to $286,800 per year. If those economics were applied to the past four years, Ford would have lost more than $14 billion.

Bankruptcy choice

Ford CEO Jim Farley said Thursday the UAW's proposal to hike wages by 40 percent, cut workweeks and add new pension benefits could bankrupt the company.

"You want us to choose bankruptcy over supporting our workers," Farley, in a CNBC interview, said of the UAW proposal. He said there are no current talks, and the automaker has received no counteroffer. "Nothing is going on."

Farley said if the UAW proposal had been in effect since 2019, instead of making about $30 billion in profits over four years, the company would have lost about $15 billion "and gone bankrupt by now."

GM began negotiating with the UAW on July 17 and heard more than 1,000 union demands “at a cost of over $100 billion,” Gerald Johnson, GM's executive vice president of global manufacturing and sustainability, said in the video posted Thursday.

“That’s unreasonable,” Johnson said. “It’s more than twice the value of all of General Motors and absolutely impossible to absorb and still compete in today’s automotive market.”

GM, Ford, Stellantis and other automakers are investing profits derived from their gas-powered vehicles into their transition to electric vehicles.

In GM’s video, Johnson told employees that the company is investing its profits back into facilities, product development, technology, tooling and its employees. Its vision of zero crashes, zero emissions and zero congestion “means big spending to get there,” he said.

“Our General Motors manufacturing team is proving today that we can do both ICE and EV at the same time,” he said, “and that’s really important, because this transformation of this size doesn’t happen overnight.”

GM's latest offer now includes two weeks of paid parental leave and up to five weeks of paid vacation, according to Barra's letter. That matches Ford's proposal.

"We've worked days, nights, and weekends since receiving the UAW's demands," Barra wrote. "We have been bargaining in good faith to deliver a better package with historic wage increases and manufacturing commitments, recognizing your contributions to our company — past, present, and future. It addresses what you've told us is most important to you, in spite of the heated rhetoric from UAW leadership."

Barra referenced the UAW's 40-day strike against GM in 2019, saying "nobody won" and that the automaker wants to reach a deal without another walkout.

"That is what is on the table for you: a historic proposal that rewards our team members, sets us up for the future, and continues our profit-sharing program so we all benefit from the company's success," Barra wrote. "Let's make new history, not repeat the past."

Reuters contributed to this report.