Workers at General Motors’ US plants have approved a new labour deal to end a costly and lengthy strike after fraught negotiations over pay and production plans.
In a vote finalised on Friday, members of the United Auto Workers union ratified an agreement that will increase hourly wages and keep open a plant that GM planned to idle early next year, but also allow the carmaker to move forward with closing three other factories.
Roughly 48,000 hourly workers went on strike last month in a dispute over pay, healthcare costs, temporary workers and GM’s decision last year to idle four US plants. The UAW and GM announced on October 16 they had come to a tentative agreement, paving the way for an end to the automotive industry’s first walkout in more than a decade and the longest work stoppage at GM since 1970.
An end to the nearly six-week strike comes as a relief to GM and its workers, who did not receive their normal pay cheques for the length of the walkout. It has cost GM at least $2bn, according to analysts, as the strike halted activity at more than 30 US factories and led to temporary lay-offs at other plants in Canada and Mexico.
“We delivered a contract that recognises our employees for the important contributions they make to the overall success of the company, with a strong wage and benefit package and additional investment and job growth in our US operations,” said Mary Barra, GM chief executive and chairman.
Shares in GM, down more than 5 per cent since the strike began, advanced 2.6 per cent on Friday.
“We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation,” said Terry Dittes, UAW Vice President and Director of the UAW-GM Department. “Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working class Americans.”
Under the labour pact, permanent hourly workers will receive 3 per cent pay raises and 4 per cent lump-sum bonuses in alternating years of the contract, and an $11,000 ratification bonus, according to a summary from the UAW. Workers’ healthcare costs will remain the same.
It also includes a path for temporary workers to become permanent and a plan to build a new vehicle at Detroit-Hamtramck, one of the factories tagged to be idled.
GM, the largest American carmaker, has pledged to invest $7.7bn in US plants over the four-year contract. It is expected to spend an additional $1.3bn on other plans, which include a new battery plant near the shuttered Lordstown, Ohio, facility.
The UAW selected GM as its so-called target company for this year’s labour negotiations. Their deal will be used as a template in upcoming talks with Ford and Fiat Chrysler.
Separately, the union reached tentative agreements this week with Mack Trucks — suspending an almost two-week strike — and the defence contractor General Dynamics.
The nationwide strike at GM could weigh heavily on US employment figures for October due next week, having already knocked durable goods orders in September. Its impact rippled across the manufacturing sector, as companies that supply GM with parts laid off thousands of workers.