UAW announces deal with General Motors that tentatively ends strikes against Detroit automakers

DETROIT (AP) — The United Auto Workers union said Monday it has reached a tentative contract with General Motors Co., the last of the three Detroit automakers to agree to a deal.

Under the agreement reached early Monday at union headquarters in Detroit, workers at the three companies will return to their jobs pending a vote on whether to ratify the contracts, which will take place within the next two weeks.

The GM deal follows tentative agreements reached with Ford on Wednesday and Jeep maker Stellantis on Saturday. All three deals must be voted on by the 146,000 union members who work at Detroit companies.

The union’s strikes against companies began on September 15.

The main provisions of the deals are largely the same across all three automakers, but there are small differences. In each case, workers would receive a 25% general wage increase, including an 11% increase upon ratification. Including cost-of-living wages, the increases would amount to more than 30% over the life of the contracts, which will last until April 2028.

The GM deal was reached after CEO Mary Barra, facing losses estimated at $200 million a week from the strike, went to UAW headquarters in Detroit on Sunday night determined to secure a new contract.

She and others were able to close a deal with UAW President Shawn Fain and others that will likely end the controversial six-week work stoppage.

The tentative agreement, which came on Fein’s 55th birthday, capped an angry few days of agreements that still need to be ratified by the UAW’s 146,000 members. Ford agreed to a new contract last week and Stellantis followed suit on Saturday, increasing pressure on GM to settle on essentially the same terms.

Members can still vote to reject the contracts, but they will likely bring labor peace to the local auto industry, at least until they expire on April 30, 2028.

Most industry analysts say the contracts with the Detroit Three are wins for the UAW, which was seeking big gains to make up for concessions it made to help companies weather the Great Recession of late 2007 into 2009. Fine initially wanted 40% raises and He even asked for a 32-hour work week for 40 hours of pay, but he did not get all of his demands.

During the talks, which began last summer, the companies said they were reluctant to agree to union terms, fearing it would force them to raise car prices higher than competitors with non-union factories in the United States, including Toyota and Tesla.

For General Motors, which was losing millions of dollars every week the strike continued, the motivation was clear: to reach a deal so it could open an SUV factory in Spring Hill, Tennessee, as soon as possible. About 18,000 GM workers were on strike.

Mike Huerta, president of UAW Local 602, which was on strike in Lansing, Michigan, was reluctant to celebrate the deal before seeing more information, saying “the devil is in the details.”

“Our negotiators did their job. They would offer us something, and then we would tell them it was good enough or it wasn’t,” Huerta said. “We were prepared to continue if we needed to,” Huerta said. “And if we said no, we would be prepared to go back.” once again.”

Shamira Marshall, a forklift driver at a GM parts warehouse in Van Buren, west of Detroit, said the holidays will be a little nicer this year thanks to the tentative deal.

“Christmas, Thanksgiving, New Years — that will help,” she said of her expected pay increase.

It marked Marshall’s second strike against GM, after he walked picket lines in 2019. As news of a deal came in, she and other UAW members worked to dismantle a tent used by strikers.

“This time it wasn’t so bad, because I knew what to expect,” she said.

The GM deal came after nearly 4,000 unionized workers walked out of GM’s largest plant in North America, in Spring Hill, Tennessee, by surprise on Saturday night.

President Joe Biden was asked about the deal on Monday, as he boarded Air Force One back to the White House. He gave him a thumbs up and said, “I think it’s great.”

Spring Hill is a major facility that would have devastated other GM plants had its workers remained on strike. It produces engines for cars assembled at nine plants as far away as Mexico, as well as the Cadillac Lyriq electric vehicles, the GMC Acadia and two Cadillac crossovers.

Eric Gordon, a professor of business and law at the University of Michigan, said the union got much of what it wanted in the deals, which will raise companies’ costs at a critical and historic time as the industry shifts from internal combustion engines to electric motors. Vehicles.

“Companies are trying to figure out how to transition to electric vehicles without losing a lot of billions of dollars, and are now facing dramatically higher labor costs for the products that will fund the transition to electric vehicles,” he said.

A Moody’s Investors Service study this month found that annual labor costs could rise by $1.1 billion for Stellantis, $1.2 billion for General Motors and $1.4 billion for Ford in the final year of the decade. The study assumed a 20% increase in hourly labor costs. Ford said the deals will add $850 to $900 in labor costs per vehicle.

Wells Fargo analyst Colin Langan estimated that the contracts would raise the company’s total hourly labor costs by about 30%, to $76.08 at Ford, $78.15 at General Motors and $75.63 at Stellantis. Foreign automakers with U.S. plants have hourly labor costs of $45 to $60, including what they spend on worker benefits, analysts said.

However, the union said the companies make billions of dollars in profits annually and can afford to pay workers to make up for past benefits. She confirms that labor expenses do not exceed 4% to 5% of the vehicle costs.

Higher costs, combined with a more aggressive stance against Fine’s companies, could make GM, Ford and Stellantis rethink opening any new factories in the United States, Gordon said.

Local Ford union bosses voted unanimously in Detroit on Sunday to approve that tentative contract after Fine explained its details, the union tweeted.

At Stellantis, workers would receive a cost-of-living wage that would push the raises to 33%, with top assembly plant workers earning more than $42 an hour. High-level workers there now make about $31 an hour.

Starting wages for new employees at Stellantis will rise 67% including cost of living adjustments to more than $30 per hour. Temporary workers will receive raises of more than 165%.

Like the Ford agreement, the union said it would only take three years for new workers to reach the top of the assembly wage scale.

The UAW began targeted strikes against the three automakers on September 15 after their contracts with the companies expired. At the peak, about 46,000 UAW workers were on strike — about a third of the union’s 146,000 members at all three companies.

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Associated Press writers Frank Bajak in Boston, Michelle Chapman in New York, Joey Cappelletti in Lansing, Michigan, and Mike Houseder in Van Buren Township, Michigan, contributed.