(Bloomberg) -- Stellantis NV’s latest contract proposal to the United Auto Workers was met with resistance, with the union pushing back on the carmaker’s stance on job security in the electric-vehicle transition and pay parity, according to people familiar with the matter.
The owner of the Jeep and Ram brands made its sixth proposal to the UAW Thursday, which included a “significant product allocation” that “allows for workforce stability” during the life of the contract, Stellantis said in an emailed statement.
The carmaker is seeking to end a strike that on Friday expanded to an additional 38 facilities run by the company and General Motors Co. However, the UAW still sees the offer as inadequate, increasing the risk the work stoppage will drag on, said the people, who asked not to be identified because the discussions are private.
The Stellantis proposal offered job security to permanent workers, one person said. It didn’t include protections for 6,000 temporary employees, salaried designers at the company’s US headquarters in Auburn Hills, Michigan, or people on sick leave, according to the person.
In another point of contention, the Stellantis offer didn’t meet union demands about the fate of employees at the company’s engine and transmission plants in Michigan and Indiana. The carmaker offered a beefed-up “voluntary termination of employment” package for workers who may lose their jobs as battery-powered cars become more popular, according to one person. But workers whose jobs are eliminated and want to stay at the company would have to apply for new roles at a battery joint venture with Samsung SDI Co. in Kokomo, Indiana, and accept a lower wage, the person said.
The UAW declined to comment beyond public remarks its president made earlier Friday. Stellantis didn’t immediately respond to a request for comment.
Automakers are pouring tens of billions of dollars into designing and building EVs, while trying to boost profits on conventional gas vehicles to pay for it. Stellantis Chief Executive Officer Carlos Tavares has said EVs are 40% more expensive to make than combustion cars, a cost he can’t pass on to consumers.
In response, UAW President Shawn Fain has accused auto executives of engaging in a “race to the bottom” in the transition to EVs, with factories that will employ fewer workers making lower wages.
Stellantis has proposed building the Ram Revolution, the electric version of its Ram pickup truck, in two plants: its Sterling Heights, Michigan, assembly plant and at a site in Mexico, one of the people said. The UAW wants to see product put into an idled Jeep plant in Belvidere, Illinois, rather than go to Mexico.
The company has also proposed eliminating 800 designer jobs from its salaried bargaining unit that works at its Michigan headquarters, and convert the rest to hourly workers, the person said.
Job security isn’t the only issue holding up an agreement between the UAW and Stellantis. The union wants employees at its Mopar parts-distribution plants to earn the same wage as assembly workers, said another person. In a live-stream address Friday, Fain underscored pay parity for parts-plant workers, job security, inflation protection and tweaks to the profit-sharing formula as sticking points in both the GM and Stellantis talks.
Ford Motor Co. has agreed to such a pay bump for workers at its parts plants, Fain said in the address. As a result, Ford was the only major Detroit automaker spared in an expansion of the strike that started last week.
At GM, the cost-of-living payments, or COLA, and how the company handles temporary workers remain the big issues, according to people familiar with the matter. The union wants more paid vacation time. If the company grants it, management would want to keep enough temps to cover it. But the union wants to reduce temp coverage, which would force the company to hire more workers.
The union wants COLA payments tied to inflation, which would give workers raises that match the inflation rate on top of their currently offered 20% pay raise. GM prefers to give cash payments for inflation protection that are capped at a fixed value.
The union also wants a two-year guaranteed payment for laid-off workers, a demand that Ford has agreed to meet. GM, however, balked at the request, Fain said.
GM pointed to a comment made earlier Friday in response to Fain’s address. “Today’s strike escalation by the UAW’s top leadership is unnecessary,” the company said.
(Updates with details on GM discussions starting in 13th paragraph.)
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