Protesters during a United Auto Workers (UAW) practice demonstration in front of the Stellantis Mack Assembly Plant in Detroit, Michigan, USA, on Wednesday, August 23, 2023.

Jeff Kowalsky | Bloomberg | Getty Images

Stellantis said Saturday that his latest proposal to the United Auto Workers calls for pay increases of nearly 21% over the life of the contract, including an immediate 10% wage increase and the end of pay scales for some workers, the latest development in a historic showdown between the three major Detroit automakers and the union.

The Jeep maker’s proposal, consistent with proposals from Ford and General Motors, would continue to give workers a share of the profits, according to new details of the offer released by the company on Saturday.

“The teams have been listening very, very carefully and being very careful that we make the best possible offers that also … protect the company,” COO Mark Stewart said on a call Saturday with reporters.

The standoff between the UAW and major automakers Stellantis, Ford and General Motors reached a crescendo on Friday when the union began work stoppages after failing to meet an agreement by a Thursday evening deadline. The so-called stand-up strike began with strikes at three key plants – one for each automaker – with the possibility that the UAW could call on more of its members to join the strike if necessary.

The union is seeking, among other things, a 40% increase in hourly wages, a shortening of the 32-hour week, a return to traditional pensions, the elimination of pay tiers and the reintroduction of cost of living adjustments. The UAW did not immediately respond to a request for comment on the proposal.

Meanwhile, Ford and GM resumed negotiations on Saturday after no talks between the union and the automakers the day before. Stellantis said the plan was to resume talks on Monday.

UAW President Shawn Fain said earlier this week that Stellantis previously offered a 17.5% raise.

Under the new proposal, starting pay for additional employees would increase by $4.22, or nearly 27%, to $20 an hour.

The company also said it would shorten the timeline for raising the hourly pay scale in half to four years, meaning all full-time hourly employees would reach the top before the contract expires. As part of the offer, the pay scale system would be completely eliminated for the Mopar division, which is known for service, parts and customer contacts.

Stellantis also offered an inflation protection measure as part of the compensation. The company said it has committed more than $1 billion to improvements to pension and retirement plans for current employees and retirees.

Stellantis leadership also pushed back against the union’s descriptions of the automaker’s plans to close or sell 18 plants. The company has said it aims to operate parts distribution centers more efficiently and continue to shift resources to electric vehicles. The company said the jobs in these plants would be retained.

The automaker also emphasized its commitment to negotiations and reaching a financially feasible agreement, echoing the concerns of Ford and GM leadership. Ford CEO Jim Farley said in a CNBC interview Friday that the UAW’s demands would force the company to “choose bankruptcy over supporting our workers.” Stellantis leadership noted that the company must remain competitive with automakers that do not have unionized employees.

“It’s not about warfare, it’s about a win-win situation,” Stewart said. “It’s about us finding something that’s great for our people today and capable of securing a future for tomorrow… so that our company can continue on the electrification investment path that we’re on and that our U.S. operations are strong “So we can compete against the transplants and we can compete against the newcomers.”

President Joe Biden said Friday that companies should improve their current offers to ensure a strong contract is agreed upon at a time of record profits.

— CNBC’s Michael Wayland contributed to this report.

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