Workers at 2 big GM plants ratify new deal
Striking employees return to work
DETROIT — A contentious 40-day strike that crippled General Motors’ U.S. production came to an end Friday as workers approved a new contract with the company.
GM workers voted 57.2% in favor of the pact, passing it with a vote of 23,389 to 17,501, the union said in a statement.
Picket lines came down almost immediately after the vote was announced, and some of the 49,000 striking workers were expected to return to their jobs as early as Friday night. Some skilled trades employees such as electricians and machinists were to enter the plants to get machinery restarted in preparation for production workers to return as early as Saturday.
“It was a good vacation, but I guess I’ve got to go back,” joked Paul Daru, a 42-year worker at GM’s engine and transmission plant in Romulus, Michigan, near Detroit. “I miss the socializing and stuff like that, seeing the guys, going out on the job and figuring out what the problem is.”
Although workers at his factory approved the deal, Daru said he voted against it because it still has several different pay scales for workers doing the same jobs. “Somebody who is working next to you for 17 bucks per hour, you’re doing the same thing,” said Daru, an electrician who may go back to work Saturday.
Temporary workers can get permanent jobs after two or three years depending on their start dates, but they start at the bottom of a pay scale, so people doing the same work can end up at different pay rates.About 49,000 workers walked off their jobs Sept. 16, halting production at more than 30 U.S. factories and hampering it in Mexico and Canada due to parts shortages. Analysts estimate the strike cost GM more than $2 billion.
Leaders at the union local office in Arlington apparently think the contract will be ap
proved when national vote totals are announced later Friday.
The website told members to check after 4 p.m. Friday to find out when they return to work.
The new four-year contract includes a mix of wage increases and annual lump-sum payments, as well as an $11,000 signing bonus. But it also allows GM to close three U.S. factories that made slow-selling cars and transmissions.
Trades workers such as machinists and electricians likely will enter the plants quickly, restarting boilers and preparing paint shops, robots and other equipment to restart production.
Although GM dealers had stocked up on vehicles before the strike and many still have decent supplies, analysts say GM won’t be able to make up for the lost production. Had the strike
been shorter, GM could have increased assembly line speeds and worked the plants on overtime to catch up and refill its stock. But many of the plants that make popular SUVs and pickup trucks already were working around the clock to keep up with demand before the strike began.
Also, companies that supply parts to the factories and halted production during the strike will need time to restart, although GM has some parts in stock.
Jeff Schuster, senior vice president of the consulting firm LMC Automotive, estimates that GM has lost production of 300,000 vehicles, and he said maybe only a quarter of it can be made up.
“You can’t add days to the week and you can’t add hours to the day,” he said.
Some production losses will help thin inventory, especially of cars, Schuster said. But in late October and early November, GM will likely run short of colors and models of trucks
and SUVs that are in high demand until stocks are replenished, he said. Although truck and SUV buyers generally are loyal to a brand, customers in a hurry for a new vehicle could go elsewhere, Schuster said.
“There are definitely going to be some limitations on choice, and that is a risk,” Schuster said. “Consumers can opt to wait, or they can go down the street to their competitor.”
Now the union will move on to bargain with either Ford or Fiat Chrysler, using the GM deal as a template. A decision on which company is next was expected as early as Friday.
It’s not clear yet if there will be another strike, but neither Ford nor FCA will be happy about being stuck with the GM terms.
GM traded the ability to close the three factories in Lordstown, Ohio; Warren, Michigan; and near Baltimore for higher labor costs, David Kudla, chief investment strategist for Mainstay Capital Management
of Grand Blanc, Michigan, wrote in a note to investors. The contract maintains worker health benefits with low premiums, something that both Ford and FCA wanted to change when negotiations began.
“Ford and FCA didn’t have three factories that they wanted to close, but will have to work around this new framework for higher wages and unchanged health care that the UAW and GM have set,” wrote Kudla, whose firm manages investments for many auto industry workers.
Workers at factories that GM will close have been transferred to plants across the nation, and they campaigned against the deal, which was reached Oct. 16. Workers in Lordstown, for instance, voted 412-61 against it, with 88% of production workers voting “no.”
In the end, economic gains and a $7.7 billion GM investment pledge for U.S. factories were too much to turn down.