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DETROIT (Reuters) -General Motors raised its offer to striking auto workers on Friday, matching Ford (NYSE:F)’s proposed 23% wage hike and other benefit improvements, hours before union chief Shawn Fain speaks on negotiations.
“We have made substantial movement in all key areas in an effort to reach a final agreement with the UAW and get our people back to work,” the company said in a statement as the strike entered week five.
“The majority of our workforce will make $40.39 per hour, or roughly $84,000 a year by the end of this agreement’s term,” it said.
Shares in GM rose 1.5% in afternoon trade and those in Ford were up 1.2%.
The latest offer by GM shows the Detroit auto makers converging on similar offers that would raise UAW workers hourly pay by some 30% over the life of the deal, including cost of living payments. Ford, which has had the best offer among the three, has said that it is at the limit of what it can pay, and remain competitive, long-term.
“(The GM offer) suggests we may be in the endgame,” said University of California Berkeley labor professor Harley Shaiken. “In effect Ford has set the dimensions of the pattern, but GM is contributing to that. We’ve got a ways to go, but there’s clearly movement.”
Progress in talks were likely prompted by the UAW’s surprise strike last week at Ford’s biggest Kentucky truck plant, which generates $25 billion in annual sales and accounts for about a sixth of the company’s worldwide automotive revenue.
Fain had described the Kentucky walkout as a warning to General Motors (NYSE:GM) and Chrysler-parent Stellantis (NYSE:STLA) and said it was ready to strike at the GM assembly plant in Arlington, Texas that builds Cadillac Escalade, Chevy Suburban and other large, high-priced SUVs.
GM said the new 23% general wage increase offer represents a 25% compounded wage rise over the life of the agreement, with 10% hike in the first year. With cost of living increases, the offer tops 30%. GM’s previous offer was a 20% pay increase.
Also, it is now offering $21 an hour in wages for temporary workers, versus its prior offer of $20.
The UAW said in a statement that Fain will go on Facebook (NASDAQ:META) live at 4 pm ET to update members on bargaining after a week of “intensive negotiations” with the big three.
More than 34,000 union members working at the three automakers are already on strike since the walkouts began on Sept. 15.
The union is waging its first simultaneous strikes against the Detroit Three automakers, demanding a 40% wage hike, including a 20% immediate increase, improvements in benefits, as well as covering battery plant workers under union agreements.
Rather than the hammer blow of a mass walkout it has wielded historically, the UAW is strategically playing the companies against each other, using reprieves from expansion of work stoppages as encouragement with different automakers.
Automakers have said union demands would significantly raise costs and hobble their electric vehicle ambitions, putting them at a disadvantage when compared to EV leader Tesla (NASDAQ:TSLA) and foreign brands such as Toyota (NYSE:TM), who are non-unionized.
On Monday, Ford Executive Chairman Bill Ford warned of the growing impact to the automaker and the U.S. economy from the strike.
The total economic losses from the UAW strike have reached $7.7 billion, according to the latest data from economic consultancy Anderson Economic Group, with the Detroit Three suffering losses of $3.45 billion.
