UAW President Fain praises the “power” of striking workers
UAW President Shawn Fain said members showed the world the “power” of striking workers as the union reached a tentative agreement with Stellantis.
General Motors and the United Auto Workers have reached a tentative agreement less than 48 hours after the union struck at 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 hours of Monday after resolving questions about the automaker’s joint venture battery factories. The person did not want to be identified because he was not authorized to speak publicly about the deal.
The UAW already has a tentative agreement it reached with Ford Motor Co. last Wednesday. On Saturday, an agreement was reached with Stellantis that mirrors the agreement with Ford.
Despite lengthy bargaining sessions with GM that have lasted into the early hours of the morning in recent days, both sides have been at odds, prompting the union to call the Spring Hill strike late Saturday and increasing pressure on GM to agree a contract get preliminary agreement.
In the afternoon, GM released a statement from CEO Mary Barra saying: “GM is pleased to have reached a tentative agreement with the UAW that reflects the team’s contributions while allowing us to continue to invest in our future and “We look forward to getting everyone back to work across all of our operations, delivering great products for our customers and winning as one team.”
The UAW also released a statement confirming the deal: “Like the agreements with Ford and Stellantis, the GM agreement turned record profits into a record contract. The deal includes profits more than four times the profits from the union’s 2019 contract. It provides more base wage increases than GM workers have received in the last 22 years.”
The breakthrough in the battery factory
The person familiar with the agreement said the main issue delaying a deal was including Ultium Cells LLC’s battery factories in a master labor agreement between the UAW and GM. Ultium Cells is a joint venture between GM and LG Energy Solution, so the legal language for a framework agreement was complicated.
Ultimately, the agreement with GM is a breakthrough because it allows the joint venture’s workforce to vote on unionizing future plants and then decide whether they want to have their own contract or be part of the master agreement. GM already operates an Ultium Cells plant in northeast Ohio and is building two additional Ultium Cells plants: one in Spring Hill, Tennessee, and the other in Lansing, both of which are expected to begin operations within the next two years. GM will begin building a fourth battery plant in northern Indiana next year with South Korea’s Samsung SDI, which will open in 2026.
“This is a UAW initiative and should be a boost for all workers,” said Art Wheaton, director of labor studies at Cornell University. “Either by creating new unions or by giving raises to prevent a new union. It is also a huge improvement in economic activity for the communities with UAW facilities because the money is spent locally. (UAW President) Shawn Fain dramatically exceeded my expectations. “He and his team were able to do it.”
On Wall Street, GM’s stock price fluctuated throughout the day as investors digested news of higher labor costs, but at least an end to the strike was in sight.
“For GM, this rips the Band-Aid off and creates a deal to put this nightmare to rest,” said Dan Ives, managing director of Wedbush Securities. “Fain has created a Broadway spectacle and a nightmare over the last few months, causing massive disruption for GM and others. Barra had to put a stop to this so GM could move forward with its EV plans, and ultimately this deal is less onerous than originally feared.”
We know the details
The tentative agreement between GM and the UAW will match the finances of the Ford deal, the person said. This includes a 25% wage increase over the life of the 4.5-year contract, which expires on April 30, 2028. There is a reintroduction of the COLA (Cost-of-Living Adjustment) formula from 2009, the same profit-sharing formula as before at Ford, a three-year transition to the highest wage and an end to salary bands until the end of the contract.
Like employees at other GM facilities, workers at the Ultium Cells plant in Warren, Ohio, near the former GM assembly plant in Lordstown, will automatically receive an 11% raise in the first year of the contract, bringing their wages to $35. dollars per hour. By the end of the contract, GM workers will earn nearly $42 an hour.
This was confirmed by the UAW in its statement Monday afternoon: “The agreement provides for a 25% base wage increase through April 2028 and will cumulatively increase the top wage by 33% along with the estimated COLA to over $42 per hour. The starting wage will increase by 70%, along with the estimated COLA, to over $30 per hour.”
The agreement will also give GM employees at certain plants the opportunity to move to either battery factories or electric vehicle factories if job security opportunities arise as GM transitions to an all-electric future, the person said.
The workers now being moved to primary production include parts distribution and GM Brownstown workers, the UAW said in its statement. For the first time since they were organized in the 1990s, GM employees will receive an across-the-board wage increase equivalent to hourly workers, the UAW said, confirming that the agreement also includes two key groups in the UAW-GM master agreement: those at Ultium Cells and GM Subsystems LLC.
“Many thought GM would never leave more money on the table for its hundreds of thousands of retirees,” the UAW wrote in a statement. “However, in this agreement, GM has agreed to make five $500 payments to current retirees and surviving spouses, the first such payments in over 15 years.”
The strikers will return to work during the ratification process. A vote by the UAW’s National GM Council is expected later this week. If the agreement is approved, it is forwarded to local leaders to discuss with the general members, who then vote to approve or reject the agreement.
Fain laid out the key points of the Ford contract Sunday evening, saying he and union negotiators “fully” support it for ratification. He encouraged people to visit www.uaw.org/ford2023 for more details on the offer. Local Ford union leaders will review contract terms with members in the coming days and Ford members will then vote on them.
UAW-Ford deal: Details of tentative UAW-Ford agreement to end 41-day strike
The pressure to close a deal was great
President Joe Biden was asked briefly about the UAW deal with GM by reporters on Air Force One on Monday and he said, “I think it’s great” and gave a thumbs up. He added, “I’ll get back to you later,” hinting that he would have more to say.
Some GM strikers still reacted hesitantly to the news. Michael Martin, operations manager for UAW Local 174, which represents workers at GM’s service and support plant in Ypsilanti Township, declined to comment to a Free Press reporter until he has had time to review the details of the deal.
Lansing Delta Township employee Mike Yakim, who worked at Lordstown Assembly in Ohio for 10 years, said he was interested in learning more about how transfers to the battery plants would work since his family still lives in the area Lordstown is alive and he might want to go back there to work at Ultium Cells. He also wants to know what retirement packages would be offered.
Pressure is on for GM to reach a tentative deal with the UAW, especially given increased strike action at the Spring Hill assembly, labor experts said, after both Ford and Stellantis reached agreements.
A big motivation is cost. On Tuesday, GM said the union’s targeted strike would cost the union about $200 million a week in lost production revenue through the fourth quarter, based on plants idled at that time. That figure did not include GM’s Arlington Assembly Plant in Texas, where GM builds its profitable large SUVs, which the UAW struck later in the day. Nor did it include strike action against the Spring Hill Assembly. Stellantis hasn’t released a cost figure yet, but labor experts estimate it would be similar to GM’s costs.
“Now is the time for GM to see what the overall framework looks like at Ford and do this. Otherwise, they will pay $200 million a week with the uncertainty that more factories will shut down,” said Harley Shaiken, a labor expert and professor emeritus at the University of California, Berkeley.
The agreement is an important victory for the UAW, Shaiken said. The Ultium Cells plant in Ohio is the only UAW battery factory in operation. The terms of the new contract at Ultium could serve as a model and encourage organization at other Detroit Three battery plants, he said. It is also crucial for organizing the other non-union battery factories.
“Organizing the battery factories could be the key to organizing the other automakers,” Shaiken said. “None of this will be easy, but it opens up new possibilities. After this excellent contract, the UAW can show a sharp contrast to wages and benefits at non-union automakers. You don’t have to say, ‘We promise’ you can do it.” Say, “We deliver.” ”
There is also pressure from the UAW to bring the matter to a close, said Peter Berg, an economics professor at Michigan State University. Union leaders know some members are bearing the burden more than others, as some have been on the picket lines since Sept. 15, when the strike began at the GM Wentzville Assembly Plant in Missouri, the Ford Michigan Assembly Plant and the Stellantis Toledo North Assembly Complex stood. Since then, Fain has gradually expanded the strike to other plants in the Detroit Three, with about 45,000 of the 150,000 autoworkers on the strike line at the strike’s peak.
“That’s starting to wear thin” for those who strike and have to live on $500 a week in strike pay, Berg said. “At some point the solidarity of the union disappears and that needs to be preserved because everyone has to vote on the agreement. You don’t want that kind of division.”
Then there are the auto parts suppliers who are concerned and watching this closely, Berg said. Many had to lay off hundreds of workers after the factories that supplied them with parts shut down due to the strike.
Now that all three automakers have reached a tentative agreement, they must figure out how to live with the consequences, said Erik Gordon, a labor expert and business professor at the University of Michigan’s Ross School of Business.
“You never know whether or not companies will get four years of labor peace given the hostility of UAW leadership, but they will have to live with significantly higher labor costs and less strategic flexibility during a difficult transition to electric vehicles,” Gordon said. “UAW workers received large compensation and benefit increases over the life of the agreements, but younger ones may have fewer job opportunities in the long run.”
Contact Jamie L. LaReau: [email protected]. Follow her on Twitter @jlareauan. Read more about General Motors and subscribe to our automotive newsletter. Become a subscriber.