United Auto Workers (UAW) union president Shawn Fain discarded contract proposals from Stellantis and called them “a slap in the face” as frustration mounted over concessions demanded during labour negotiations.

On Tuesday, Fain denounced Stellantis’ proposals as insulting, saying the company’s demands included reducing healthcare coverage, cutting vacation days for new hires, reducing employer contributions to 401(k) plans, and removing the cap on temporary employees, according to Reuters. 

Fain disposed of a copy of the Stellantis proposal into a bin and said: “That’s where it belongs – in the trash – because that’s what it is.”

According to the report, the 27 July document showed Stellantis focusing on addressing absenteeism which the automaker claimed “cost it more than 16,000 vehicles of lost production,” or US$217m in lost revenue.

Stellantis defended its stance by highlighting the need to curb fixed costs amid government regulations promoting EVs.

It expressed concern over an anticipated US$613m cumulative rise in employee healthcare expenses over the next four years.

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By GlobalData

The UAW opposed Stellantis’ stance on maintaining a two tier wage system which pays newer employees significantly less than experienced counterparts. 

Stellantis declined to comment.

Insiders told Reuters the UAW’s contract demands “could raise the current mid-$60 an hour labour rate to over $150 per hour”.

“We understand how to manage this. We have a plan. If these companies don’t deliver, they’re going to see that plan unfold. We can’t live in fear,” Fain said.