General Motors and the United Auto Workers union have reached a tentative agreement that would serve to end a six-week strike against Detroit automakers. The deal adds to those reached last week with Ford and Stellantis. Awaiting the most likely ratification by the workers, this third agreement ended a conflict that lasted only six weeks.
Like the other two companies, the agreements run for four years and eight months and include a total salary increase of 25% and additional cost-of-living adjustments. In general, the salary increase will exceed 30% during the contract period. For new and temporary workers, the increases are significantly higher.
The agreement was reached earlier this Monday in a meeting at the UAW headquarters in Detroit, where the president of the union, Shawn Fain, participated, as did General Motors CEO Mary Barra and the company’s chief manufacturing officer, Gerald Johnson, according to sources cited by the AP, who asked not to be identified because they were not authorized to speak publicly about the agreement. The deal was reached on the day Fain turned 55.
General Motors was close to an agreement last week, but negotiations became strained and the union increased the pressure by calling a strike at the company’s most important plant in the United States, Spring Hill, Tennessee, with 4,000 workers, and that makes machines that are used for assembly in many other factories. Along with them, there are about 18,000 unionized workers of the company who are on strike and will return to their jobs while awaiting the ratification process of the agreements.
The management of the company reacted immediately to the strike at Spring Hill to prevent a bottleneck in the production of the machine, which would damage the industry and the finances of the whole company.
The motor strike began on September 15 to stop a General Motors plant in Wentzville (Missouri), which manufactures the GMC Canyon and the Colorado; another from Ford in Wayne (Michigan), which assembles the Bronco model and the Ranger truck; and the third from Jeep, from Stellantis, in Toledo (Ohio), where the Gladiator and Wrangler models come from.
The following week, Fain called about 6,000 workers from 28 Stellantis and GM distribution centers spread across 20 states to stop, saving Ford from being fired for what appeared to be a willingness to negotiate.
A week later, the union leader called 7,000 more UAW workers to strike at two plants: Ford’s in Chicago, Illinois, where the Explorer and Lincoln Aviator models are made, and GM’s Lansing Delta in Lansing (Michigan), which mounts the Buick Enclave and the Chevrolet Traverse. In the third round, Stellantis was saved from being hit by further suspensions thanks to a last-minute offer.
The company was then hit by surprise strikes at the main factories of each group: first at Ford, then at Stellantis, and last Saturday at General Motors, which was the last to give. The company showed investors last week when presenting its results that the strike would cost it $200 million per week. The company has decided to withdraw its full-year profit forecasts pending an assessment of the impact of the conflict.
Wells Fargo analysts estimate that the new agreements will increase the companies’ total hourly labor costs by nearly 30%, to $76.08 in the case of Ford, $78.15 at GM, and $75.63 at Stellantis. Hourly labor costs for foreign automakers with U.S. factories are typically between $45 and $60, analysts said, including what they spend on benefits.
“I think it’s good,” said the president of the United States, Joe Biden, this morning when asked about the new agreement. The resolution of the conflict was a political success for Biden, who participated in a strike picket on September 26 and urged the workers to remain firm in their demands.