The United Auto Workers’ contract demands of the Detroit Three automakers could surge per-person labor costs to more than $100 per hour in wages and benefits, according to three sources familiar with the situation, potentially outstripping North American profits over the life of a new contract.
All-in labor costs for General Motors Co., Ford Motor Co. and Jeep maker Stellantis NV now hover around $65 per hour, according to industry estimates, compared to $55 an hour for foreign-owned automakers operating in the United States and $45 an hour for electric-vehicle rival Tesla Inc.
The “members’ demands” consisting of dozens of proposals call for a 32-workweek with 40 hours of pay, pensions extended to all workers and the revival of health care coverage for retirees. Also included: a 46% increase in wages over the life of the contract, which would expire on May 1, 2028 — International Workers’ Day, according to two of the sources.
“That number seems astronomical for manufacturing jobs that are already relatively well paid,” said Sam Fiorani, vice president of global forecasting for AutoForecast Solutions LLC. “In order to get anywhere near those (wage increase) numbers, other things will have to come off the table, including profit sharing, other benefits, any number of things in order to just get this one thing. If this is not done, you’re absolutely going to see employment reductions from the Detroit Three.”