GM workers approve new contract and cancel strike
The longest nationwide strike against General Motors Co in a half-century ended on Friday after a solid majority of the company’s union members delivered their support for the four-year contract hammered out by their leaders.
The United Auto Workers union emerged with substantial wage increases and succeeded in ending a two-tier wage structure that had been a particular irritant in its ranks. It also won commitments to new GM investments in US factories, while accepting the permanent shutdown of three plants already idled.
After almost six weeks on picket lines, some of GM’s 49,000 union workers could be back on the job at the weekend, though it may take days to get back to full production.
“We delivered a contract that recognises our employees for the important contributions they make to the overall success of the company,” GM’s chief executive, Mary Barra, said in a statement.
The UAW said 57% of the nearly 41,000 members voting had backed the contract proposal. Now it will turn its attention to the other big Detroit automakers, Ford Motor Co and Fiat Chrysler Automobiles NV.
The union usually seeks to reach similar terms in a process known as pattern bargaining.
Patrick Anderson, chief executive of Anderson Economic Group, a research and consulting firm, said that GM lost an estimated $1.75 billion as a result of the strike. But the walkout inflicted a wider economic toll, particularly in the Upper Midwest and other areas dependent on the auto industry, causing lay-offs at GM suppliers like Lear Corp.
In total, striking GM employees and workers at the suppliers lost an estimated $988 million in wages, Anderson said. “It’s already affecting home repairs, vacations, savings for college, holiday shopping, restaurant purchases.”
For GM workers, the contract will yield wage increases of 3% in the second and fourth years and 4% lump sum payments in the first and third years, similar to what the union obtained in 2015.
Even larger gains are in store for those in a wage category called “in progression,” the lower scale of a twotier system negotiated in 2007 when the Detroit automakers were financially reeling.
In addition to pay increases, GM workers will get bonuses of $11,000 for ratifying the contract. They will continue to pay 3% of their health care costs, well below the percentage that GM’s salaried workers contribute.
“It’s a rich contract for workers,” Anderson said. “The health care coverage would be the envy of nearly every worker in America.”
There were also rewards for temporary workers, about 7% of GM’s union workforce, who will have a path to permanent employment after three years. About 900 of them will become full employees in January, according to UAW, and 2,000 more by 2021.
As part of the new contract, the company pledged to invest $7.7 billion in its US plants and another $1.3 billion in ventures with partners, providing a measure of job security.
At the same time, the agreement allows GM to close three idled factories permanently, including one in Lordstown, Ohio, eliminating excess manufacturing capacity at a time when auto sales are slowing.