GM and UAW reach tentative agreement after weeks of contract negotiations

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General Motors and the United Auto Workers have reached a tentative agreement, less than 48 hours after the union struck the automaker’s Spring Hill Assembly Plant in Tennessee, the Detroit Free Press has learned.

A person familiar with the agreement said the parties reached the deal in the early morning hours of Monday after resolving questions regarding the automaker’s joint battery factories. The person requested anonymity because they are not authorized to speak publicly about the deal.

The UAW already has a tentative agreement it has reached with Ford Motor Co. Last Wednesday. It reached an agreement with Stellantis on Saturday that mirrors the one it struck with Ford.

Despite marathon bargaining sessions with GM that have continued into the early morning hours over the past few days, the two sides have been at an impasse, prompting the union to order a strike at Spring Hill late Saturday and ramp up pressure on GM to get approval. . Initial agreement.

In the afternoon, GM released a statement from CEO Mary Barra that said: “GM is pleased to reach a tentative agreement with the UAW that reflects the contributions of the team while enabling us to continue investing in our future and providing good jobs in the world. We look forward to everyone returning to work across all of our operations.” , providing great products to our customers, and winning as one team.

The UAW also issued a statement confirming the deal, saying: “Like the agreements with Ford and Stellantis, the GM agreement turns record profits into a record contract. The deal includes gains estimated at more than four times the gains from the 2019 union contract.” “It provides more base wage increases than GM workers have received in the past 22 years.”

Battery factory hacked

The main issue holding up the deal centered around how to include Ultium Cells LLC’s battery plants in a master labor contract between the UAW and GM, the person familiar with the agreement said. Ultium Cells is a joint venture between GM and LG Energy Solution, so the legal language to allow for a master contract was complex.

Ultimately, the agreement with GM is a major accomplishment because it will allow the joint venture’s workforce to vote on future plant consolidation and then decide whether they want their own contract or be part of the main contract. GM already operates an Ultium Cells plant in Northeast Ohio and is building two more Ultium Cells plants: one in Spring Hill, Tennessee, and one in Lansing, both of which are expected to begin operations within the next two years. GM will begin construction of a fourth battery plant in northern Indiana with South Korea-based Samsung SDI next year, opening in 2026.

“This is a UAW-run house that should be a boost to all workers,” said Art Wheaton, director of labor studies at Cornell University. “Either by organizing new unions or getting raises to help avoid a new union. It’s also a huge improvement in economic activity for communities that have UAW facilities that this money is being spent locally. (UAW President) Sean Fine has greatly exceeded my expectations on what he’s He and his team were able to achieve this.”

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On Wall Street, GM’s stock price bounced up and down throughout the day as investors digested news of rising labor costs but at least an end in sight to the strike.

“For GM, this rips off the band-aid and seals a deal to put this nightmare in the rearview mirror,” said Dan Ives, managing director at Wedbush Securities. “Fine has created a Broadway play and a nightmare of the past few months and has caused massive disruption for GM and others. Barra needed this to end so GM could move forward with its electric vehicle plans, and finally this deal was less difficult than it had been.” Originally feared.”

Details we know

The tentative agreement between GM and the UAW will match the financials of the Ford deal, the person said. This includes a 25% wage increase over the four-and-a-half-year contract, ending on April 30, 2028. There is a return to the 2009 cost-of-living adjustment formula, which is the same profit-sharing formula that was reached. With Ford, he advanced three years to the top pay and end of the tier pay scales by the end of the contract.

As with employees at other GM facilities, workers at the Ultium Cells plant in Warren, Ohio, near GM’s former Lordstown assembly plant, will automatically receive an 11% raise in the first year of the contract, bringing their salaries to… $35 per hour. By the end of the decade, GM workers’ wages will be close to $42 an hour.

This is what the UAW confirmed in its statement Monday afternoon: “The agreement provides a 25% base pay increase through April 2028, and will cumulatively raise the 33% top pay plus estimated COLA to more than $42 per hour. The starting pay will be an increase 70% plus the estimated COLA, to over $30 per hour.”

The agreement will also allow GM employees at certain plants the opportunity to move to either battery plants or electric vehicle plants when there is an opportunity to secure jobs as GM transitions to an all-electric future, the person said.

The workers who will now be moved to the main production rate include parts distribution workers and workers at GM Brownstown, the UAW said in its statement. For the first time since they organized in the 1990s, salaried workers at GM will receive an overall pay increase, equivalent to that of hourly workers, the UAW said, underscoring that the deal also brings together two key groups in the UAW GM’s master agreement: those who work at Ultium Cells and GM Subsystems LLC.

“Many believed GM would not put more money on the table for its hundreds of thousands of retirees,” the UAW wrote in a statement. “However, in this agreement, GM agreed to make five payments of $500 to current retirees and surviving spouses, the first such payment in more than 15 years.”

The strikers will return to work through the certification process. A vote by the UAW’s National GM Council is expected later this week, and if it approves the agreement, it will then go to local leaders for discussion with at-large members who will then vote to approve or reject the deal.

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Fine outlined the most important provisions of Ford’s contract Sunday night, saying he and union negotiators “wholeheartedly” support ratifying it. He encouraged people to visit www.uaw.org/ford2023 For more details about the offer. Local union leaders at Ford will review the terms of the contract with members in the coming days, and then Ford members will vote on them.

UAW-Ford deal: Details of the tentative UAW-Ford agreement that would end the 41-day strike

The pressure was on to reach an agreement

President Joe Biden, the first president to walk the picket line when he came to a GM parts plant in Belleville last month to support the UAW, was asked briefly by reporters aboard Air Force One on Monday about the UAW’s deal with GM and said: “I think… It’s great,” he said, giving a thumbs-up gesture. He added: I will talk to you later, indicating that he will have more to say.

Later, the White House issued a statement to Biden that said: “I applaud the UAW and GM for coming together after hard-fought, good-faith negotiations to reach a historic agreement to provide workers with the wages, benefits, and respect they deserve.” “.

He praised the UAW and GM for agreeing to immediately reinstate all GM workers who were walking the picket line. Biden said the contract is “a testament to the power of unions and collective bargaining to build strong middle-class jobs while helping our most iconic American companies thrive. The final word on these tentative agreements will ultimately come from UAW members themselves in the days and weeks to come.”

Some GM strikers were still reluctant to respond to the news. Michael Martin, shop president of UAW Local 174, which represents workers at GM’s customer care and aftermarket plant in Ypsilanti Township, declined to comment to a Free Press reporter until he had time to review the details of the deal.

Lansing Delta Township employee Mike Yakim, who has worked for the Lordstown Assembly in Ohio for 10 years, said he’s interested in learning more about how transfers to battery stations work because his family still lives in the Lordstown area and he might want to get back there. To work in Ultium Cells. He also wants to know what kind of retirement packages will be offered.

The pressure has been intense on GM to get a tentative agreement with the UAW, especially with the growing strike at Spring Hill Assembly, labor experts said after Ford and Stellantis struck deals.

The big driver is cost. GM said Tuesday that the Stand Up Strike campaign targeted by the union would cost it about $200 million a week in lost production revenue through the fourth quarter based on which plants were idled at the time. That number did not include GM’s Arlington Assembly plant in Texas where GM builds profitable large SUVs, which the UAW struck later that day. It also did not include the strike against the Spring Hill Association. Stellantis has not yet released a cost figure, but business experts estimate it will be similar to GM’s.

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“Now is the time for GM to see the framework with Ford and go for it,” said Harley Chaiken, a labor expert and professor emeritus at Harvard University. “Otherwise they are paying $200 million a week with the uncertainty of more factories coming out.” University of California, Berkeley.

Chaiken said the agreement represents an important victory for the UAW. The Ultium Cells plant in Ohio is the only UAW battery plant in operation. The terms of the new contract at Ultium could serve as a model and spur organizing at other Detroit Three battery plants, he said. It is also important to organize other non-union battery factories.

“Regulating battery factories could be key to regulating other automakers,” Chaiken said. “None of this will be easy but it opens up new possibilities. In the wake of this stellar contract, the UAW could show a sharp contrast to wages and benefits at non-union automakers. They don’t have to say ‘We promise’ they can say ‘We deliver’ “.”

From the UAW side there was also pressure to end the matter, said Peter Berg, a business professor at Michigan State University. The union leaders knew that some members bore the burden more than others, given that some of them were still alive Picket lines since September 15 When the strike began at GM’s Wentzville Assembly Plant in Missouri, Ford’s Michigan Assembly Plant and Stellantis’ Toledo North Assembly Complex. Fain has since gradually expanded the strike to other facilities across Detroit 3 with about 45,000 of the 150,000 auto workers on the picket line at the strike’s peak.

“That’s starting to erode” for those on strike who are living on $500 a week in strike pay, Berg said. “At some point, the solidarity of the union fades and it’s important to maintain it because they all have to vote on the agreement. You don’t want to get that kind of division.”

Berg said there are auto parts suppliers who are concerned and are monitoring this closely. Many were forced to lay off hundreds of workers after the factories they supply with spare parts stopped working due to the strike.

Now that the three automakers have reached a tentative agreement, they will have to figure out how to live with the consequences, said Eric Gordon, a labor expert and business professor at the University of Michigan’s Ross School of Business.

“Companies may or may not get four years of labor peace, you never know given the hostility from UAW leadership, but they will have to live with much higher labor costs and less strategic flexibility during the difficult transition to electric vehicles,” Gordon said. “UAW workers received significant compensation and benefit increases during the life of the agreements, but younger workers may have fewer job opportunities in the long term.”

Contact Jimmy L. LaRue: [email protected]. Follow her on Twitter @jlareauan. Read more about General Motors and register on our website Auto Newsletter. Become a subscriber.

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