Stellantis is offering a 14.5% salary increase to the UAW, days before the potential strike

Protesters during a United Auto Workers (UAW) sit-in outside the Stellantis Mack Assembly Plant in Detroit, Michigan, US, on Wednesday, August 2019. 23, 2023.

Jeff Kowalski Bloomberg | Getty Images

Stellantis on Friday offered big four-year pay raises to its hourly workers represented by the United Auto Workers, as it strives to avoid a costly strike.

The automaker’s offer would provide a 14.5% pay increase over the four years of the proposed deal for most of the roughly 43,000 Stellantis hourly workers represented by the UAW. New or in-progress employees will receive a 27% increase in their starting wages and a shorter period of time — six years, versus eight years under the current deal — to advance to the maximum pay rate.

Current contracts between the UAW and the three Detroit automakers will expire at 11:59 p.m. Thursday. Union leaders threatened to strike if no agreement was reached by then. Never in its history has the UAW called for major strikes simultaneously against all three companies.

Stellantis Displays It also provides its UAW-represented employees with a one-time $6,000 “inflation protection payment” in the first year of the deal, and a total of $4,500 in additional payments over the next three years.

Additionally, the proposal would make Juneteenth a paid holiday for workers covered by the deal.

“This is a responsible and strong offering that allows us to continue providing good jobs for our employees today and for the next generation here in the United States,” said Mark Stewart, chief operating officer of Stellantis’ North American unit. “It also protects the company’s future ability to remain globally competitive in an industry that is rapidly shifting to electric vehicles.”

UAW Vice President Rich Boyer told CNBC that negotiations are ongoing and will continue in hopes of getting a deal before the deadline. He added that if no agreement was reached, the federation would take appropriate action.

The proposed wage increase is larger than those offered to the union by competitors General Motors and Ford Motor Co., which have offered increases of 10% and 9%, respectively. The two companies also offered additional endorsement rewards that Stellantis did not.

But the proposed deal still falls far short of the union’s demands, which include a 40% hourly wage increase, a 32-hour workweek, and the restoration of traditional retirement plans, among other provisions. Only about 30% of Stellantis’ UAW-represented workers — those hired before October 2007 — currently have pension plans.

UAW President Shawn Fain rejected offers from both GM and Ford as insufficient. He called GM’s offer Thursday “a humiliating proposal that comes nowhere close to a fair deal for America’s auto workers.”

UAW members voted overwhelmingly last month to give union leaders the authority to call strikes if necessary.

— CNBC’s Michael Weiland contributed to this story.