(Reuters) - General Motors on Thursday made a counterproposal to the union representing its U.S. hourly workers in a bid to avoid a costly strike, but United Auto Workers President Shawn Fain called the offer "insulting."
The largest U.S. automaker said it offered workers a 10% wage hike and two additional 3% annual lump sum payments over four years in its offer to the union ahead of the Sept. 14 contract expiration.
Last week, Ford said it had offered a 9% wage increase through 2027 and 6% lump sump payments, much less than the 46% wage hike being sought by the union through September 2027. The UAW has said 97% of members voted in favor of authorizing a strike if agreement is not reached. A union official said Ford was expected to make a new counteroffer on Thursday.
Fain, who represents 146,000 workers at the Detroit Three, said GM's offer was "an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers.... The clock is ticking. Stop wasting our members’ time. Tick tock."
The UAW said the GM offer would change the formula for calculating profit sharing and if it had been in effect last year, workers would have received 29% less. The UAW also said Ford's proposal would have cut profit sharing by 21%.
GM shares closed down 0.8% to $32.57.
GM said the wage hike is the largest proposed since 1999. It is also offering a $6,000 one-time inflation-related payment and $5,000 in inflation-protection bonuses over the life of the agreement, along with a $5,500 ratification bonus.
Chrysler-parent Stellantis said Wednesday it planned to make a counteroffer to the UAW this week.
GM said that under its offer, current temporary employees will receive a 20% increase to $20 per hour wage and it would shorten the time it takes to get to the maximum wage rate for permanent employees - mirroring proposals from Ford.
GM President Mark Reuss said in a video posted on Thursday "we need a fair contract that both rewards our employees and protects the long-term health of our business."
The union's demands include a 20% immediate wage increase followed by four 5% annual wage hikes, defined-benefit pensions for all workers, 32-hour work weeks and additional cost of living hikes. GM is proposing to give employees an additional paid holiday.
The UAW also wants all temporary workers at U.S. automakers to be made permanent, seeks enhanced profit sharing and the restoration of retiree health-care benefits and cost-of-living adjustments.
A UAW strike that shuts the Detroit Three manufacturers could cost carmakers, suppliers and workers over $5 billion, Michigan-based Anderson Economic Group estimated.
With new car inventories tight, consumer experts have said that could translate into higher car prices - an important component of inflation.
Last week, the UAW filed unfair labor practice charges with the National Labor Relations Board against GM and Stellantis saying they refused to bargain in good faith.
J.P.Morgan on Thursday said supply chain disruptions from a potential UAW strike would cut new vehicle production, drive up used car prices and put pressure on margins in the personal auto insurance business.
Earlier on Thursday, Ford said about 8,000 U.S. workers represented by the UAW will get an average $4.33 an hour in additional pay under provisions of the current contract agreed in 2019. Stellantis said it also raised pay this week for 4,000 workers per the 2019 contract.
Reporting by David Shepardson; additional reporting by Joe White and Ben Klayman; Editing by Nick Zieminski, Tomasz Janowski and Josie Kao