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The United Auto Workers has reached a tentative collective bargaining agreement with the last of the Big Three automakers, General Motors, bringing the industry close to ending a historic six-week strike that has rocked the economy and delivered record profits for workers.
The GM contract would have to be approved by UAW workers and comes just days after similar tentative agreements with Ford and Jeep maker Stellantis. The agreements would end the auto union’s first simultaneous strike against all three automakers.
The agreements represent the largest compensation win the union has achieved in decades, including a 25 percent increase in base wages over four and a half years. The GM deal was confirmed by people familiar with the talks who spoke on condition of anonymity because the agreement is not yet public.
When President Biden boarded Air Force One Monday morning and was asked about the GM deal, he gave it a thumbs up. “I think it’s great,” he said. The Biden administration has been pushing for a solution to the work stoppage for weeks, worrying about the stability of an industry that contributes 3 percent of the country’s gross domestic product. Biden last month became the first president to join the strike line in support of workers, and resolving the strikes could help Biden in his bid to become the “most pro-union president in history.”
The tentative contracts come after UAW wages have long failed to keep pace with inflation and after the union gave up many of its major benefits at the time of the Great Recession, when automakers struggled to survive. The union managed to win back many of these benefits in the new agreements, including the restoration of regular cost-of-living wage adjustments to offset inflation. It also eliminated pay scales that had kept new workers on a lower pay scale.
Striking workers at all three companies will return to work while the union organizes ratification votes, a process that could take a week or longer. If workers reject the agreements, they will return to the picket lines.
The GM deal comes after the union unexpectedly intensified its strike against the automaker on Saturday evening, walking out of a GM plant in Spring Hill, Tennessee, while talks appeared to be at an impasse. The UAW had slowly expanded its work stoppage since it began on September 15th.
The deals are a coup for the union’s relatively new leader, Shawn Fain, who stormed the negotiations with big demands and a more combative style than the UAW has displayed in decades.
On Sunday evening, before news of the GM deal broke, Fain threw down the gauntlet to the rest of the auto industry, saying the UAW was aiming to unionize U.S. auto plants outside the Big Three.
“One of our biggest goals after this historic treaty victory is to organize like we have never done before,” Fain said during a Facebook Live address. “When we return to the negotiating table in 2028, it will not only be with the Big Three, but also with the Big Five or Big Six.”
He added that the UAW had negotiated for its new contracts to end on April 30, 2028, so that workers could strike if necessary on May 1, an international holiday commemorating workers’ fight for an eight-hour day remembered in the 19th century.
“We invite unions across the country to align your contracting processes with our own so that together we can begin to flex our collective muscles,” Fain said. “If we truly want to take on the billionaire class and transform the economy to work for the benefit of the many rather than the few, it is important that we not only strike, but that we strike together.”
In the new contracts, the union failed to restore defined benefit pensions for all workers, but it did force automakers to increase their contributions to 401(k) retirement accounts. Ford will now contribute 10 percent of a worker’s wages, the UAW said Sunday.
The automakers said little about the agreements, leaving the union to brief its members on the details and organize ratification votes.
The strike quickly cost automakers billions of dollars in lost sales and other disruptions. GM said last week that it was losing $200 million a week. Ford said the strike cost the company $1.3 billion.
The work stoppage spread and affected many workers outside the picket lines. The three major automakers have temporarily laid off thousands of non-striking workers in recent weeks, saying they cannot do their jobs because they rely on striking facilities. Auto parts suppliers have also laid off thousands as their orders from the Big Three dried up.
Some suppliers will need to hire new workers to replace employees who left for other jobs during the UAW strike, Ford Chief Financial Officer John Lawler said last week.
Ambrose Conroy, an automotive expert and founder of Seraph Consulting, said he and his team were eyeing an unusually large number of suppliers that were in “critical financial condition.”
“These troubled suppliers have either not paid their subcontractors or are almost out of money,” he said by email. Some will need financial assistance to restart production and, given the UAW deals, they could face demands from workers for higher wages, he added.
The conversations were bitter. During frequent Facebook Live addresses to his members, Fain threw the automakers’ initial proposals into a trash can to express his disgust. He railed against corporate greed and appeared on a webcast wearing an “Eat the Rich” T-shirt.
The automakers at times accused Fain of showing off in front of the cameras instead of engaging in real negotiations. They took part in the talks and acknowledged that inflation meant they would have to give workers significant pay rises, but they balked at the union’s tall demands, saying they would leave companies unable to do so , to compete with non-union competitors.
Fain, who was elected UAW president earlier this year, has frequently criticized union leadership in recent decades, accusing it of being too complacent and too benevolent toward the industry. He has often praised the era of legendary UAW President Walter Reuther, who led the union with a more combative style from 1946 to 1970.
And he called the union’s strike a “stand-up strike,” in reference to the UAW sit-down strike of 1936-37, when workers occupied General Motors factories in Flint, Michigan, to press for better wages.