DETROIT: General Motors Co and the United Auto Workers union reached a tentative agreement on Wednesday for a new four-year labour deal, moving closer to ending a costly month-long strike that shut down GM’s most profitable factories in a test of wills over the future of US auto industry jobs.
Neither the UAW nor GM released details of the deal, which is subject to ratification by UAW members, a process that could last up to two weeks. A new contract is expected to include commitments by the automaker to invest billions in US vehicle factories to build new generations of electric vehicles, as well as US electric vehicle battery plants. Union leaders worry that a shift to electric vehicles could cost thousands of jobs at engine and transmission factories.
The longest nationwide strike against a Detroit automaker since 1970 became a political event. Democratic presidential candidates joined UAW picket lines, eager to win union votes in Midwest swing states. For his part, US President Donald Trump put pressure on GM Chief Executive Mary Barra before the strike to preserve jobs at a car plant in Lordstown, Ohio, that she had targeted for closure.
Trump spoke individually with Barra and UAW President Gary Jones on Wednesday, spokesmen for GM and the union confirmed. The White House declined to comment on the discussions.
Details of GM’s last offer emerged over the weekend and Reuters had reported that the company boosted the amount it plans to invest in the United States to about $9 billion from its previous offer of $7 billion. That figure is unchanged in the final agreement, a person briefed on the matter said.
The deal also would create or retain 9,000 UAW jobs, a “substantial” number of which will be new, the source said. GM in September said its initial offer would support 5,400 jobs — and a majority of those would be new jobs.
If the contract is ratified, UAW workers who have been living on $250 a week in strike pay are expected to get one-time signing bonuses, as well as increases to base pay. The union had also pushed for temporary workers at GM plants who earned less than permanent UAW employees to get an easier path to full-time wages and benefits. Analysts have estimated the strike cost GM more than $2 billion in lost production, though some of that could be made up through overtime work. The strike halted production of GM’s large pickup trucks and sport utility vehicles - key drivers of the company’s global profit.
The deal is not done yet. The union’s national GM council will decide whether to accept the agreement during a meeting on Thursday. Then UAW members at GM will vote on the agreement. The strike continues at least until Thursday’s meeting, the UAW said in a statement. The strike began on September 16, with about 48,000 hourly workers of the UAW union at GM seeking higher pay, greater job security, a bigger share of profit and protection of healthcare benefits.
GM’s revised offer that emerged over the weekend also included an increase of its proposed ratification bonus by $1,000 to $9,000. GM also proposed 3 per cent pay raises in the second and fourth year of the four-year-contract and 3 per cent and 4 per cent lump sum payments in the first and fourth year respectively. It agreed to make temporary workers with three years of service permanent and give those workers a $3,000 ratification bonus. — Reuters
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