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GM, UAW agree on tentative labor contract that could end 48,000 workers’ month-long strike

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Striking General Motors Detroit-Hamtramck Assembly plant workers and their supporters walk the picket line during the United Auto Workers national strike in Hamtramck, Michigan, September 22, 2019. REUTERS/Rebecca Cook

Rebecca Cook | Reuters

DETROIT — General Motors and union leaders have reached a tentative deal on a new labor contract that could end the United Auto Workers’ month-long strike against the automaker, the UAW said Wednesday.

Details of the proposed deal were not immediately available. However, the union’s roughly 48,000 members with GM are expected to receive raises and bonuses as part of the accord.

The company’s shares jumped by about 2.5% in morning trading. The stock of cross-town rival Ford was up by less than 1%, by comparison. 

Based on previous proposals, the company also will invest at least $7-$7.7 billion in its manufacturing operations and add thousands of new hourly union jobs during the next four years. The company also previously agreed to maintain its gold standard health insurance, which requires employees to cover roughly 3% of their total costs. 

“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, director of the UAW GM department, said in a statement. The UAW’s national negotiating team is recommending that union members take the deal. 

Dittes said he is refraining from discussing details until local union leaders can meet in Detroit on Thursday to review the proposed tentative agreement.

The deal is likely at least two weeks away from being finalized by rank-and-file union members. It still needs approval from local union leaders, who are expected to be summoned to Detroit from across the country to vote on it. The local leaders will also decide whether workers will remain on picket lines or return to work during the voting process.

If the local UAW leaders approve the proposed contract, GM’s unionized workforce must then vote on it. The new contract, if ratified by members, will be used as a template by the union for negotiations with Ford Motor and Fiat Chrysler.

While the tentative agreement could end the strike against GM, negotiators aren’t likely breathing sighs of relief just yet. Ratification of leadership-approved tentative agreements has traditionally been a guarantee; however, workers with Fiat Chrysler four years ago rejected an initial deal, sending negotiators back to the table.

Ahead of a deal being reached this year, industry experts cautioned the ratification of any agreement could be challenging amid a widening federal probe into corruption at the UAW’s highest ranks involving bribery, kickbacks and embezzlement of union funds.

“The federal investigation swirling around the contract makes getting that contract ratified much more difficult,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University. “It is not in the company’s interest to have UAW’s leadership not be able to deliver a ratified contract.”

Former Ford CEO Mark Fields last month said the widening corruption probe will make it harder for union leaders to get their members to approve any potential new labor deals with the Detroit automakers.

“When you reach a tentative deal, the [companies] are relying on the union leadership to sell that to their rank and file,” Fields said on CNBC’s “Closing Bell.” “So it doesn’t weaken the UAW’s negotiating power, but what it does do is weaken the loyalty and the trust that the rank and file have in the leadership.”

About 48,000 UAW members have been picketing outside GM’s U.S. facilities since Sept. 16.

The work stoppage has rippled throughout the automaker’s North American operations, causing thousands of additional layoffs. Wall Street analysts estimate GM is losing roughly $50 million to $100 million per day in lost production.

It also has contributed to substantial declines in GM’s shares during the past four weeks. The stock had fallen by double digits since the strike began. It’s now down by about 4% since Sept.13, the last trading day before workers started picketing. 

Source: Top News and Analysis (pro)