Piper with the United Auto Workers continues 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.
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
Details of the four-year
pact weren't released, but GM's latest offer to end the
monthlong strike included wage increases and lump-sum
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
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.
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
President Donald Trump
called UAW President Gary Jones on Wednesday night, but
union spokesman Brian Rothenberg said he did not know
what the men discussed.
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.
Schwartz said depending
on the contents, the GM contract could influence wages
and benefits in other industries. But he said foreign
automakers with U.S. factories, mainly in the South,
will give modest pay raises regardless of the GM
contract, and shouldn't be affected much.
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
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, Tennessee, 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 south 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
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.
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.
Donald Trump's trade war with China and his tariffs on
imported steel and aluminum have raised costs for auto
companies. A revamped North American free trade deal is
stalled in Congress, raising doubts about the future of
America's trade in autos and auto parts with Canada and
Mexico, which last year came to $257 billion.
Amid that uncertainty, GM
workers have wanted to lock in as much as they can
before things get ugly. They argue that they had given
up pay raises and made other concessions to keep GM
afloat during its 2009 trip through bankruptcy
protection. Now that GM has been nursed back to health
— earning $2.42 billion in its latest quarter — they
wanted a bigger share.
The union's bargainers
have voted to recommend the deal to the UAW
International Executive Board, which will vote on the
agreement. Union leaders from factories nationwide will
travel to Detroit for a vote on Thursday. The earliest
workers could return would be after that.
In past years, it's taken
a minimum of three or four days and as long as several
weeks for the national ratification vote.
This time around — with
a federal corruption investigation that has implicated
the past two UAW presidents and brought convictions of
five union officials — many union members don't trust
the leadership. But they're also tired of striking and
may return before they vote on the deal themselves.
The strike had shut down
33 GM manufacturing plants in nine states across the
U.S., and also took down factories in Canada and Mexico.
It was the first national strike by the union since a
two-day walkout in 2007, and the longest since a 54-day
strike in Flint, Michigan, in 1998 that also halted most
of GM's production.