The United Auto Workers (UAW) union started negotiations with the Big Three in Detroit: Ford, General Motors, and Stellantis. The talks include electric vehicle (EV) production as automakers focus on cost reductions for the shift.
The UAW is concentrating on eliminating the two-tier wage system implemented under the current contract with the Big Three. Under the two-tier wage system, new hires earn up to 25% less than veteran workers. UAW President Shawn Fain is also aiming for salary increases.
“I feel like we should be able to afford the cars that we make,” said GM employee Sherry Watts, who has worked for the automaker for 4 years.
He believes the three automakers have achieved some financial success in recent quarters, given generous executive payouts and the benefits of U.S. Federal subsidies for electric vehicle sales.
“They’ve made a quarter of a trillion dollars in North American profits over the last 10 years, and they can afford to make things right for our members,” Fain said
Fain also wants the UAW to represent hourly workers at joint-venture EV battery plants that the Detroit Three have opened or are planning to open. Last month, Fain criticized the United States Department of Energy for offering a $9.2 billion loan to Ford and SK On’s BlueOval battery plant joint venture.
Big Three’s POV
On the other side of the fence, General Motors, Stellantis, and Ford want to close the cost gap between foreign automakers and competitors like Tesla. With the Inflation Reduction Act, electric vehicles are reaching price parity with internal combustion engine cars, making the EV market more competitive. Reduced cost gaps might be a negotiation point as it might interfere with the UAW’s goal to increase wages.
The Detroit Three also seek more flexibility with its employees in the United States to increase efficiency and cut costs as they transition to electric vehicle production.