UPDATED 5:49 P.M.
(Reuters) – General Motors and the United Auto Workers (UAW) said they struck a tentative deal on Monday that will end the union’s unprecedented six-week campaign of coordinated strikes that won record pay increases for workers at the Detroit Three automakers.
The accord follows deals reached in the last few days by the union with Ford Motor and Chrysler-owner Stellantis, in what amounts to significant victories for auto workers after years of stagnant wages and painful concessions made by the union following the 2008 financial crisis.
“We wholeheartedly believe our strike squeezed every last dime out of General Motors,” UAW President Shawn Fain said in a video address on Monday. “They underestimated us. They underestimated you. These corporations had no idea what was coming for them.”
The new contracts will significantly raise costs for the automakers. The companies and some analysts have said the deals will place the Detroit Three at a disadvantage compared with electric-vehicle leader Tesla and foreign brands such as Toyota Motor which are not unionized.
The UAW won from GM roughly the same package of wage increases to which it agreed with the other two automakers. This raises top pay for veteran workers by 33%. The company also agreed to make $2,500 in lump-sum payments to retirees.
Pension benefits were a key sticking point in GM’s negotiations with the UAW, sources have said. GM has more retirees than either Ford or Stellantis and increases to pension benefits for workers hired before 2007 cost GM more than its rivals.
The union officially suspended its strike against the Detroit Three, Fain said. The union’s local leaders will come to Detroit on Friday to consider the deal with GM, before the terms are taken to all union workers for ratification.
“We are looking forward to having everyone back to work across all of our operations,” said GM CEO Mary Barra.
Nearly 50,000 workers out of nearly 150,000 union members at the Detroit automakers eventually joined a series of walkouts that began on Sept. 15. The UAW’s strategy of escalating, targeted strikes cost the Detroit Three and suppliers billions of dollars.
UAW leaders argued their contract fight was part of a larger movement to reverse decades of economic setbacks for working-class Americans and some analysts agreed.
“This is more than an auto industry story; it is a signal to the entire country that unionized workers can demand and get big wage increases,” said Patrick Anderson of the Anderson Economic Group.
The three tentative deals are a win for the strategy orchestrated by Fain. This involved simultaneous bargaining with the Detroit Three and dangling the threat of strikes at key factories to achieve results.
Fain then kept most UAW members working in order to hoard strike funds. He expanded the strike slowly, when he decided that progress in talks had stalled.
Now, Fain must get the contracts ratified by rank-and-file UAW members. That process began on Sunday as he met with leaders of Ford-UAW local unions.
PRAISE FROM BIDEN
U.S. President Joe Biden praised the UAW agreements with the Detroit Three.
“These record agreements reward auto workers who gave up much to keep the industry going during the financial crisis, more than a decade ago,” Biden said at a White House event. “These agreements ensure the iconic Big Three can still lead the world in quality and innovation.”
Aides to Biden had worried that a prolonged auto strike would damage both the U.S. economy and the Democratic president’s chances of re-election in 2024.
Biden, congressional Democrats and some Republicans weighed in to support the UAW as the union’s fight gained popularity with voters. Michigan will again be a crucial swing state in 2024, and Fain made active support for the union’s fight a condition of winning his endorsement. The UAW still has not formally endorsed Biden’s re-election.
The new contract will cost GM $7 billion over 4.5 years in higher labor costs, two sources told Reuters.
“Consumers will bear some of the cost burden over time … automakers will not have an easy time passing along all of the costs … and will have to seek efficiencies in other ways, or further limit production to more expensive vehicles that can absorb higher labor costs,” Cox Automotive’s chief economist, Jonathan Smoke, said.
The UAW, in a series of social media posts, said it is committed to expanding to other carmakers, saying it wants negotiations in 2028 to be between the union and the “Big Five or Big Six.”
Momentum toward deals accelerated over the past two weeks after UAW workers walked out at three of the most profitable factories in the world including GM’s Arlington, Texas, assembly plant that makes the Chevy Tahoe and Suburban.
The UAW eventually struck against nine plants, most recently GM’s Spring Hill, Tennessee, manufacturing complex that makes engines for a total of nine North American assembly plants, seven of which were not already on strike.
(Reporting by David Shepardson in Washington and Joseph White in Detroit; Additional reporting by Shivansh Tiwary and Kannaki Deka in Bengaluru; Writing by Deepa Babington and Sayantani Ghosh; Editing by David Gaffen, Alistair Bell and Matthew Lewis)
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(Reuters) – General Motors and the United Auto Workers (UAW) union have reached a tentative agreement, two sources familiar with the matter told Reuters, effectively ending the first simultaneous strike against the Detroit Three automakers with record wage and benefit hikes.
Details of the agreement with GM, the last holdout of the Detroit Three, were not immediately available.
The accord follows agreements reached in the last few days by the union with Ford Motor and Chrysler owner Stellantis, in what experts say stand as significant victories for auto laborers after years of stagnant wages and painful concessions made by the union following the 2008 financial crisis.
Nearly 50,000 workers out of nearly 150,000 union members at the Detroit Three eventually joined a series of walkouts that began on Sept. 15. The UAW’s strategy of escalating, targeted strikes cost the Detroit Three and suppliers billions of dollars over more than 40 days.
The GM workers will return to work after an official announcement of the agreement, two sources said. A GM spokesperson declined comment.
Talks at GM stalled Saturday because of issues such as pension and how fast temporary workers would get permanent work, sources have said.
The three tentative deals are a win for the precedent-breaking strategy that Fain and top union officials orchestrated to achieve their goal of securing record-setting pay and benefit gains.
Fain must now get the contracts ratified by rank-and-file UAW members. That process began on Sunday as Fain met with leaders of Ford-UAW local unions.
For the first time, the UAW bargained with all three automakers at the same time, using the threat of strikes at key factories to accelerate a bidding war among the companies to avoid a new walkout.
Fain kept most UAW members working in order to hoard strike funds. He expanded the strike slowly, when he decided that progress in talks had stalled.
Shares of GM were down 0.6% in Monday trading. Ford shares fell 1.9% while Stellantis shares were flat in Milan.
Fain repeatedly accused the Detroit Three automakers of enriching executives and investors, while neglecting workers and said the UAW’s success would help blue collar workers throughout the country.
The UAW achieved substantial gains in pay and retirement benefits, and rolled back concessions on other issues it agreed to in contracts over the past 15 years.
U.S. President Joe Biden on Monday lauded the tentative agreement. “I think it’s great,” Biden, who has touted himself as pro-union and backed the UAW, said when asked about the reported deal.
The Detroit automakers argued that the UAW’s demands would significantly raise costs and put them at a disadvantage compared with EV leader Tesla and foreign brands such as Toyota Motor, which are nonunionized.
The UAW, in a series of social media posts prior to the GM announcement, said it is committed to expanding, saying it wants negotiations in 2028 to be between the union and the “Big Five or Big Six.”
Both GM and Ford recently said they would slow their EV buildouts as demand for these cars has slowed.
THE UAW STRATEGY
The strike began at relatively unimportant plants, spreading to the biggest money-makers that produce pickup trucks and SUVs, ratcheting up the pain.
Momentum toward deals accelerated over the past two weeks after UAW workers walked out at three of the most profitable factories in the world: GM’s Arlington, Texas, assembly plant, which makes the Chevy Tahoe and Suburban; Ford’s Kentucky Truck heavy-duty pickup factory and Stellantis’ Ram pickup plant in Sterling Heights, Michigan.
The UAW eventually struck against nine plants, most recently GM’s Spring Hill, Tenn. manufacturing complex with makes engines for a total of nine North American assembly plants, seven of which were not already on strike.
At about 5 PM ET on Saturday, UAW workers at the Spring Hill complex began walking off the job, even as UAW President Shawn Fain and the UAW’s top negotiator at Stellantis, Rich Boyer, were preparing to announce terms of the contract at the Chrysler parent.
(Reporting by David Shepardson in Washington and Joseph White in Detroit; Editing by David Gaffen, Peter Henderson and Matthew Lewis)
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