Why are UAW auto workers striking? Their contract demands as they negotiate with Ford, GM and Stellantis

As the United Auto Workers enter the fourth day of their strike against Detroit’s Big Three, the the stakes are getting higher and higher for car manufacturers Ford, General Motors and Stellantis. UAW President Shawn Fain threatened to target more factories work stoppages if “serious progress” toward an agreement is not reached by midday Friday.

What do the auto strikers want? Here is a list of contract demands the union is bringing to the bargaining table.

Salary Increases and Cost of Living Adjustments

The UAW is asking automakers for a 36 percent pay increase over a four-year contract. For the moment, however, the differences remain very far apart on the question of wage increases.

Stellantis – which owns Chrysler, Dodge, Jeep and Ram, as well as major foreign brands including Citroën, Peugeot and Maserati) – on Saturday proposed a 21% salary increase over four years, with an immediate increase of 10% upon signing a new contract. The union in summary rejected the offer.

“It’s definitely banned,” Fain told CBS News. “Face the nation” Sunday of the Stellantis proposal. “We’ve made that very clear to businesses.”

The UAW also wants the Big Three to restore annual cost-of-living adjustments, arguing that inflation eats away at workers’ wages. For decades, Detroit automakers offered a COLA, but stopped after GM and Chrysler went bankrupt following the 2008 financial crisis.

Accounting for inflation, auto workers have seen their average wages fall 19.3% since 2008, according to Adam Hersh, a senior economist at the left-leaning Economic Policy Institute. This is because “the concessions granted to autoworkers following the 2008 crisis in the auto industry have never been restored,” Hersh said in a recent blog post, “including a suspension of cost-of-living adjustments.”

End of salary scales

The UAW wants the Big Three to abandon its two-tier pay structure. Under this system, top-tier workers — that is, anyone who joined the company in 2007 or earlier — earn on average about $33 an hour. But those hired after 2007 are classified in lower categories and earn much less — down to about $17 an hour.

Employees at lower levels are also not eligible for defined benefit pensions and their health benefits are less generous. The UAW says it’s unfair to pay employees half as much for the same work.

Defined benefit pension plans for all

Currently, UAW workers hired after 2007 do not receive defined benefit pensions. For years, the union forewent across-the-board wage increases and lost out on cost-of-living wage increases to help companies control costs.

“The majority of our members don’t have a pension today. It’s crazy,” Fain complained while speaking to Ford workers last month at a plant in Louisville, Kentucky.

Art Wheaton, director of social studies at the School of Industrial and Labor Relations at Cornell University in Buffalo, believes the union will ultimately lose its battle for the return of retirement.

“I think their chances of winning, even in most of the cases they seek, are slim to none,” Wheaton said. For example, he said: “I wouldn’t hold my breath for (the return of pension plans). Almost no one in any sector is adding more today.

“But you never ask for the minimum, you ask for more than you want to reach an agreement,” he said.

Four-day work week plus vacation

Along with substantial pay raises, more paid leave and retirement benefits, one of the changes to UAW leadership having negotiated It’s a four-day work week, or 32 hours of work for 40 hours of pay, and more free time “to spend with family,” according to the UAW website.

“Our members are working 60, 70, even 80 hours a week just to make ends meet. This is not living. This is barely surviving and this needs to stop,” Fain said last month on Facebook Live, explaining the demands of the union.

Advocating shorter work weeks is not a new concept for autoworkers. Congress changed federal labor laws in 1940, limiting the workweek to 40 hours, but nearly 15 years earlier, Ford Motors became one of the first companies to implement the 40-hour week.

Right to strike, protection of the family

The union is also demanding the right to strike against factory closures.

“The Big Three have closed 65 factories over the past 20 years,” according to the UAW website. “This has devastated our hometowns. We must have the right to defend our communities.”

With that in mind, the union also wants to implement a “working families protection program” that pays the UAW to perform community service if companies close their facilities.

Perhaps most important for the union is that he be allowed to represent workers at 10 electric vehicle battery factories, most of which are built by joint ventures between South Korean automakers and battery makers. The union wants these factories to receive top wages from the UAW. Part of the reason is that workers now making components for internal combustion engines will need a place to work as the industry shifts to electric vehicles.

Health care for retirees

In addition to the return of traditional retirement plans and significantly higher pay for retired workers, the union is demanding health care for all retired UAW members. Workers hired before 2007 still receive these benefits. But those who have been hired since then – a majority of hourly workers – are not.

The UAW gave up pension plans and retiree health care for new hires, as well as COLA for all members when GM and Chrysler were hurtling toward bankruptcy in 2009. But it will be difficult for the union to convince management to restore these benefits, said Patrick AndersonCEO of Anderson Economic Group, a Michigan research firm.

Recourse limited to temporary workers

The union is also demanding that automakers limit their use of temporary workers, who under the progressive wage system receive the lowest pay and no benefits.

“We will end the abuse of temporary workers. Our fight within the Big Three is a fight for every worker,” the UAW says on its website.

“Bold” demands

Fain himself recognized that the union’s demands are “bold”. But he says automakers can afford to significantly raise workers’ wages.

Over the past decade, the Detroit Three have become strong profit generators. They collectively recorded a net profit of $164 billion, including $20 billion this year. The CEOs of the three major automakers earn several million dollars in annual compensation.

“Companies have made significant offers, but I think they should go further: to ensure that record profits mean record contracts,” President Biden said Friday as he discussed the decision to The UAW’s decision to strike,