GM, union reach tentative deal that could end strike

  • Ryan Piper with the United Auto Workers continues to picket after news of a tentative contract agreement with General Motors in Langhorne, Pa., on Wednesday. AP

  • Picketing United Auto Workers Richard Rivera, left, and Robin Pinkney react to news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill. (AP Photo/Matt Rourke) Matt Rourke

  • Picketing United Auto Workers Richard Rivera, left, and Will Myatt react to news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill. (AP Photo/Matt Rourke) Matt Rourke

  • Members of the United Auto Workers continue to picket after news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill. (AP Photo/Matt Rourke) Matt Rourke

  • Shown is a sign at a General Motors facility in Langhorne, Pa., Wednesday, Oct. 16, 2019. Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill. (AP Photo/Matt Rourke) Matt Rourke

Associated Press
Published: 10/16/2019 2:16:17 PM

Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company’s U.S. factories to a standstill.

The deal, which the union says offers “major gains” for workers, was hammered out after months of bargaining but won’t bring an immediate end to the strike by 49,000 hourly workers. They will likely stay on the picket lines for at least two more days as two union committees vote on the deal, after which the members will have to approve.

Terms of the tentative four-year contract were not released, but it’s likely to include some pay raises, lump sum payments to workers and requirements that GM build new vehicles in U.S. factories.

Analysts say the strike probably cost GM $2 billion in lost production, while workers lost on average more than $3,000 in wages and had to live on $250 per week in strike pay.

“Everybody lost out on this. We did, they did,” said Mark Nichols, who works at GM’s transmission plant in Toledo, Ohio.

Nichols, who thought the strike would last only a week or two, said he’s ready to get back to work because his savings are running low. “I just hope it gets done,” he said.

The deal now will be used as a template for talks with GM’s crosstown rivals, Ford and Fiat Chrysler. Normally the major provisions carry over to the other two companies and cover about 140,000 auto workers nationwide. It wasn’t clear which company the union would bargain with next, or whether there would be another strike.

Art Schwartz, a former GM negotiator who now runs a labor consulting business, said depending on the contents, the contract could influence wages and benefits at other manufacturers. But he said foreign automakers with U.S. factories, mainly in the South, always give pay raises and shouldn’t be affected much.

“They’re located in low-wage areas and they pay well,” he said. “The people who work there are kings of the locality.”

The strike did show that the union still has power in the auto industry. “I think economically the UAW will do just fine in this agreement,” Schwartz said.

Early on, GM offered new products in Detroit and Lordstown, Ohio, two of the four U.S. cities where it planned to close factories.

The company said it would build a new electric pickup truck to keep the Detroit-Hamtramck plant open and to build an electric vehicle battery factory in or near Lordstown, Ohio, where GM is closing an assembly plant. The battery factory would employ far fewer workers and pay less money than the assembly plant.

Clarence Trinity, a worker at GM’s engine and transmission plant in the Detroit suburb of Romulus, Mich., said the deal sounds good, “But I have to see it in writing or hear from the leaders.”

Trinity said he can’t figure out why it took 31 days for the strike to end. “I don’t understand what General Motors was expecting to get out of us. Maybe they didn’t expect us to strike. Maybe they didn’t expect us to strike this long.”

It’s unclear if GM will be able to make up some of the production lost to the strike by increasing assembly line speeds or paying workers overtime. Many GM dealers reported still healthy inventories of vehicles even with the strike.

If all of the committees bless the deal, it’s likely to take several days for GM to get its factories restarted.

Matt Himes, a worker at the GM plant in Spring Hill, Tenn., heard news of the deal in Ohio, where he’s trying to help his wife sell their house after the Lordstown GM plant where he used to work was shuttered.

He hopes good news keeps coming. If they can sell their house, his wife can finally move down to Tennessee with him.

“I’m proud that we stuck our ground and everybody stuck together,” Himes said of the union workers during a phone interview. “And I’m relieved that hopefully it worked out, got us a good contract and we can move on and get back to work making cars like we should be.”

Wall Street investors liked news that the strike could end. GM shares jumped 2.6% just after the news broke, but they eased back by early afternoon with the stock up 1.2% to $36.68.

GM and the union have been negotiating at a time of troubling uncertainty for the U.S. auto industry. Driven up by the longest economic expansion in American history, auto sales appear to have peaked and are now heading in the other direction. GM and other carmakers are also struggling to make the transition to electric and autonomous vehicles.




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