General Motors stated on Friday that it plans to increase employment in the following year, despite concerns raised by autoworkers regarding the potential decrease in labor demand due to the shift towards electric vehicles (EVs).
Last month, GM, Ford Motor, and Stellantis, the parent company of Chrysler, initiated contract negotiations with the United Auto Workers (UAW) union prior to the expiration of the current four-year labor agreements on September 14.
Gerald Johnson, GM’s manufacturing chief, disagreed with the notion that fewer workers would be needed for EV production. In a video message, Johnson stated, “We actually expect our employment numbers to grow in 2024.”
In 2020, Ford announced that EVs, which have simpler designs and fewer mechanical components, would require 40% less labor compared to conventional internal combustion engine (ICE) vehicles. GM has committed to discontinuing the sale of new ICE vehicles by 2035.
One of the key issues in the negotiations pertains to the compensation and treatment of workers at GM’s joint venture battery plants.
CFRA Research downgraded GM on Friday due to concerns about a potential strike after the UAW demanded significant increases in pay and benefits. GM’s shares closed at $36.57, down 1%.
Regarding the negotiations, Stellantis stated, “We intend to fairly reward our represented employees for their contributions to the success of the Company. However, it will be critical to find common ground that doesn’t jeopardize our ability to continue investing.”
The UAW is seeking a pay increase of over 40% throughout the four-year contract, including an initial 20% raise upon ratification and 5% annual wage hikes starting in September 2024. These details come from sources and a copy of the proposal.
GM criticized the UAW proposals on Thursday, stating that they “would threaten our ability to do what’s right for the long-term benefit of the team.”
The union is pushing for significant changes to wages and benefits, including defined-benefit pensions for all workers and shorter work weeks. They also desire to make all temporary workers at U.S. automakers permanent, increase paid time off, and restore retiree health care benefits and cost-of-living adjustments. Additionally, the UAW wants new limitations on temporary workers and for them to receive profit sharing.
UAW President Shawn Fain expressed support for a 32-hour work week, compared to the traditional 40 hours.
Sources have revealed that the union wants the companies to agree to the equivalent of a paid day off per week, aligning with the global trials of a four-day working week.
Reporting by David Shepardson; Editing by Marguerita Choy