Workers celebrate deal with GM, show power of union in industry
Members would get raises, low-cost health insurance
DETROIT >> On the picket lines at a General Motors transmission plant in Toledo, Ohio, passing cars honked and striking workers celebrated a tentative contract deal by munching on 10 pizzas dropped off by a supporter.
They had carried signs for 31 days and demonstrated the muscle the United Auto Workers union still has over Detroit’s three manufacturers.
Details of the four-year pact weren’t released, but GM’s latest offer to end the monthlong strike included wage increases and lumpsum payments, top-notch health insurance at little cost to workers, promises of new products for many U.S. factories and a path to full-time work for temporary workers.
That’s a big difference from what GM wanted going into the talks: to slash total labor costs at its factories, which are about $13 per hour higher than at foreign automakers in the U.S.
Terry Dittes, the UAW’s chief bargainer with GM, said the deal offers “major gains” for 49,000 union workers who have been walking picket lines since Sept. 16. They’ll stay off work for at least a couple more days while union committees decide if they will bless the deal. Then workers will have to vote
on it.
The deal shows that the union, with less than one-third of the 1.5 million members it had at its peak in 1979, still has a lot of clout with GM, Ford and Fiat Chrysler.
“I think economically the UAW will do just fine in this agreement,” said Art Schwartz, a former GM negotiator who now is a labor consultant in Michigan. “The union certainly still has power in this industry.”
The strike immediately brought GM’s U.S. factories to a halt, and within a week, started to hamper production in Mexico and Canada. Analysts at KeyBanc investment services estimated the stoppage cut GM vehicle production by 250,000 to 300,000 vehicles. That’s too much for the company to make up with overtime or increased assembly line speeds. Analysts say the costs to GM will hit around $2 billion.
Workers, on the other hand, lost north of $3,000 each on average, the difference between their base wages and $250 per week in strike pay from the union.
“It’s nice to see there’s a deal, but without knowing the details I’m a little skeptical because we don’t know the highlights or the lowlights,” said worker Nick Kuhlman, who was among the strikers huddled around a burn barrel on a blustery, gray Toledo afternoon.
“I just hope it gets done,” said Toledo worker Mark Nichols, who thought the strike would last only a week or two and was ready to get back to work because his savings are running low.
GM apparently was able to close three of four factories that it wanted to shutter to get rid of excess capacity in slow-selling cars and components. The Detroit-Hamtramck plant will get a new electric pickup truck and stay open, but factories in Lordstown, Ohio; Warren, Michigan; and near Baltimore are to be closed. The Lordstown area will get an electric vehicle battery factory, but it won’t have nearly as many workers as the assembly plant that for years made compact GM cars.
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.
Clarence Trinity, a worker at GM’s engine and transmission plant in the Detroit suburb of Romulus, Michigan, 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.”
If all of the committees bless the deal, it’s likely to take several days for GM to get its factories restarted.
Wall Street investors liked news that the strike could end. GM shares jumped 2.6% just after the news broke, but eased back to close up 1% at $36.65.