The deadline for Ford (F) -), General Motors (GM) -) and Stellantis (STLA) -) to reach a deal with the United Auto Workers union is fast approaching.
If the Big Three Detroit automakers can't come to an agreement with the union by midnight Sept. 14, the union's near-150,000 members will go on strike.
The UAW's key demands include 40% hourly wage increases, a 32-hour workweek and a restoration of cost-of-living adjustments.
Related: Former Ford CEO warns UAW members its leader is 'playing a dangerous game'
Ford Chief Executive Jim Farley said Sept. 12 that the company had proposed its most "generous offer in 80 years" to the UAW, offering pay increases, more vacation and larger retirement contributions, among other things. But he said that Ford will not get behind the four-day workweek.
Shawn Fain, president of the UAW, noted that costs of labor make up 5% to 8% of the total cost of a car. His proposed wage increase could drive that up by a healthy margin, raising the total cost of cars in the midst of an ongoing EV price war between legacy automakers and Tesla (TSLA) -), which does not employ union members.
"Competition is code for race to the bottom. I'm not concerned about Elon Musk building more rocket ships; our concern is working-class people need their share of economic justice in this world," Fain told CNBC.
"Class warfare has been going on in this country for the last 40 years. And the billionaire class has been walking away with everything while the working class has been scraping to get by paycheck to paycheck."
More Tesla:
- Tesla chief Elon Musk says he's 'not building a house anywhere' in wake of federal investigation
- Here's why the Tesla bears are very wrong, according to Wedbush analyst Dan Ives
- Tesla's hidden 'Elon Mode' has NHTSA regulators extremely concerned
UAW chief: Workers 'cannot be left behind'
As the country begins pushing harder to electrify cars and quicken the transition to EVs, Fain maintained that the labor force "cannot be left behind."
His focus, however, remains on the dichotomy between the average worker's wages and those of the executives who run the companies.
"They could double our wages, not raise the price of vehicles and still make billions in profits," Fain said.
GM CEO Mary Barra took home a total package of $28.9 million in 2022, down from the $29.1 million she earned in 2021, according to a report filed with the U.S. Securities and Exchange Commission. Farley earned $21 million in total compensation for 2022 and Stellantis CEO Carlos Travares earned $24.9 million.
The median pay for a GM worker during the same year was $80,034, according to GM.
"As it stands right now, all three are most likely to be struck unless we get a deal by Sept. 14 at midnight," Fain said. "There is no lead company. All three are expected to deliver for their workers and if they don't, there will be action."
