General Motors and the United Auto Workers union reached a tentative agreement on a new labour deal, paving the way for an end to the month-long strike that has rippled across the car maker’s North American operations and cost it around $2bn.
The UAW said Wednesday the strike will continue at least until its national GM council approves the deal at a meeting scheduled for Thursday. The council will then decide if it should call an end to the strike while the deal awaits ratification by union members.
Details of the agreement were not immediately revealed. GM said last week it had presented an offer that, among other items, would increase compensation for workers and add billions of dollars in new investments.
“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” UAW vice-president Terry Dittes said in a statement. “Out of respect for our members, we will refrain from commenting on the details until the UAW GM leaders gather together and receive all details.”
GM confirmed a tentative deal had been reached and said it will provide additional details “at the appropriate time”.
Roughly 48,000 hourly workers went on strike last month, the first auto industry walkout in more than a decade, in a dispute over pay, healthcare costs, temporary workers and GM’s decision last year to idle four US plants.
The Center for Automotive Research has estimated the strike, which is in its fifth week, has cost GM about $450m per week. Much of GM’s North American operations have ground to a halt amid the walkout, with more than 30 of its plants in the US stopping work. GM implemented temporary lay-offs at other factories in the US, Canada and Mexico amid parts shortages. Suppliers also slowed production due to the strike.
Shares in GM have declined more than 6 per cent during the strike, as of Tuesday’s market close. The stock rose 2.5 per cent Wednesday, bringing its gain over the past two days to 4.7 per cent.
Media reports indicated that chief executive Mary Barra had rejoined the talks with UAW officials on Tuesday, signalling that a deal was close.
Ford, Fiat Chrysler and suppliers of auto parts also saw their shares climb Wednesday, erasing some of the losses recorded since the strike began. BorgWarner, which has slipped about 4 per cent during the strike, was up nearly 2 per cent.
Following completion of its deal with GM, the UAW will move on to negotiations with Ford and Fiat Chrysler. The union had selected GM as the so-called target company to begin talks on a new four-year contract that would set the template for agreements with the other automakers.