General Motors Co. and the United Auto Workers reached a tentative agreement on a new contract Wednesday, clearing the way for a union vote Thursday on whether to continue a strike that has lasted more than a month.
The accord may bring an end to the union’s longest national walkout against the carmaker in almost half a century. It includes $9 billion in investment in U.S. plants, 9,000 new or retained jobs and signing bonuses exceeding the $8,000 that workers got four years ago, people familiar with the matter said. Workers would get 3% pay raises in some years of the contract and 4% lump-sum payments in the others.
“The No. 1 priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” UAW Vice President Terry Dittes said in a statement. He said the union’s bargaining committee recommends that the GM National Council — composed of presidents and chairmen from union locals around the country — vote in favor of putting the deal up for a ratification vote.
GM confirmed that a tentative agreement had been reached, but neither the company nor the union provided details on what it included.
Shares of GM climbed 1.1% on Wednesday.
The stakes were rising for both sides as the strike entered a fifth week, costing GM billions of dollars, forcing workers to live on $275 a week and denting the economy in Michigan and the Midwest. Analysts at Bank of America Merrill Lynch estimate the strike has cost GM about $2 billion of earnings, and its striking workers may have each lost $2,000 of profit sharing and as much as $4,000 in take-home pay.
The walkout also has become a national political issue, coming up during Tuesday night’s Democratic presidential debate in Ohio, a state that has lost thousands of auto industry jobs.
Vote could be fast-tracked
If the UAW decides to continue the strike until the deal is ratified, the union may be pressured to expedite the process, said Art Schwartz, a former GM labor negotiator.
“If they keep them out, I’m sure they will speed ratification up,” said Schwartz, who is now a consultant in Ann Arbor, Mich. “Usually, it takes about two weeks, but it doesn’t have to. They can do it quicker and I think they would.”
Even if the vote is fast-tracked, it could take a week to get all the ballots in and ratify the deal.
After exchanging blame last week, GM and the union made rapid progress over the weekend. Company Chief Executive Mary Barra and President Mark Reuss showed up in person at the main bargaining table Tuesday. And in an early sign a possible deal was in the works, UAW bosses summoned local presidents and chairmen to Detroit for a meeting Thursday.
GM and union officials reached a key compromise on a path to full-time employment for temporary staffers after three consecutive years of work, people familiar with the situation said. The treatment of temps, some of whom have worked at GM for as long as four years, had been one of the most contentious issues standing in the way of a deal.
The automaker said last week that it was willing to increase wages and lump-sum payments, preserve healthcare benefits, remove a cap on how much profit sharing is paid out based on earnings and boost ratification bonuses.
The UAW’s national council is to decide Thursday whether to recommend the agreement for a ratification vote and whether the strike will continue while members cast ballots.
“If they don’t feel confident in their ability to get [the agreement] ratified, they may just say, ‘We’re going to keep them out on strike until it’s ratified, because we’re not sure,’” said Arthur Wheaton, director of the Worker Institute at Cornell University. “It will be a great temperature test to see whether or not they feel confident in the vote.”
Getting the new four-year agreement approved by the rank-and-file could be a challenge. GM outraged union workers last year by threatening four U.S. plants with possible closure, though it has offered to keep at least one of those factories open.
UAW leaders also have credibility problems. President Gary Jones was implicated last month by federal prosecutors in an indictment of a former confidant who conspired to embezzle member dues and spend the money on stays at luxury villas, golf gear and cigars.
”It’s nice to see there’s a deal, but without knowing the details I’m a little skeptical because we don’t know the highlights or the lowlights,” said worker Nick Kuhlman, who was among the strikers outside a General Motors transmission plant in Toledo, Ohio.
“I just hope it gets done,” said Toledo worker Mark Nichols, who thought the strike would last only a week or two and was ready to get back to work because his savings are running low.
Once the UAW’s GM membership ratifies the contract, the union will turn its attention to either Ford Motor Co. or Fiat Chrysler Automobiles. The union typically tries to use the first agreement as a pattern for the others. It extended its contracts with Ford and Fiat Chrysler on Sept. 13 to focus on GM.
The Associated Press was used in compiling this report.