Northwest Arkansas Democrat-Gazette
Officials iron out tentative GM deal
Bid to end strike needs union OK
DETROIT — Bargainers for General Motors and the United Auto Workers reached a tentative contract deal Wednesday, signaling a potential end to the 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 reached 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 as two union committees vote on the deal, after which the members will have to approve it.
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.
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 that the strike has cost GM about $2 billion of earnings, and its striking workers may have lost $2,000 of profit sharing and as much as $4,000 in take-home pay.
The walkout also became a national political issue, coming up during Tuesday night’s Democratic presidential debate in Ohio, which has lost thousands of auto industry jobs.
The strike reached deep into GM’s supply chain, including Arkansas. Daniel Cushman, president of Tontitownbased P.A.M. Transportation Services, said Tuesday that the trucking company had to find other work for about 400 company drivers affected by the strike.
The walkout meant P.A.M.’s largest customer “essentially shut down operations without warning,” Cushman said in the company’s quarterly earnings report.
If approved, the deal 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 autoworkers 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 lowwage 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 to keep the Detroit-Hamtramck plant open and 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.
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.