In a move aimed at improving retirement security, GM proposed a contribution of $500 to retirees and $1,000 to the active employee defined-benefit program.
Ford, on the other hand, made an offer that would raise total worker compensation, including healthcare and other benefits, to $132,000 per year, up from the current $112,000 per year.
According to sources, if the United Auto Workers (UAW) were to secure all of their initial demands, total compensation per employee would soar to $286,800 per year, potentially causing Ford to lose over $14 billion when looking at the past four years of data.
Threat of Bankruptcy
Ford CEO Jim Farley expressed concern that the UAW’s proposal to increase wages by 40%, reduce workweeks, and add new pension benefits had the potential to bankrupt the company. In an interview with CNBC, Farley criticized the UAW’s offer, stating, “You want us to choose bankruptcy over supporting our workers.” Despite the lack of current negotiations and no counteroffer from the UAW, Farley remains adamant that “nothing is going on.”
Farley further argued that if the UAW’s proposal had been implemented since 2019, Ford would have suffered losses of approximately $15 billion over four years, resulting in bankruptcy. As a result, Farley emphasized the importance of avoiding a similar scenario.
GM’s latest offer now includes two weeks of paid parental leave and up to five weeks of paid vacation, matching Ford’s proposal. In a letter, GM CEO Mary Barra addressed the UAW, stating, “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.” Barra expressed a desire to reach a deal without experiencing another strike like the 40-day one against GM in 2019, highlighting that “nobody won” in that situation.
“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.
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