The United Auto Workers has reached a tentative contract deal with the last of the Big Three automakers, General Motors, bringing the industry close to ending a historic six-week strike that has rattled the economy and brought record gains for workers.
The GM contract, and two similar tentative deals with Ford and Stellantis, must be ratified by a majority of UAW workers, but they appear poised to end the union’s first simultaneous strike against all three companies.
The agreements mark the biggest compensation gains the union has won in decades, including a 25 percent raise in base wages over 4½ years, the UAW said in a Monday statement. GM chief executive Mary Barra welcomed the deal and said the company is “looking forward to having everyone back to work.” Workers at all three companies are suspending their strikes and returning to their jobs while they organize ratification votes.
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President Biden confirmed and welcomed the GM-UAW deal Monday afternoon, saying he’d just discussed it with UAW President Shawn Fain.
“Today’s historic agreement is yet another piece of good economic news showing something I’ve always believed. Worker power — worker power — is critical to building an economy from the middle out and the bottom up,” Biden said in televised remarks from the White House.
The Biden administration has spent weeks pushing to resolve the work stoppage, worried about the stability of an industry that contributes 3 percent of the nation’s gross domestic product.
Biden last month became the first sitting president to join a picket line when he marched alongside striking UAW workers in Michigan. That gesture, and the resolution of the strikes, could help the president bolster his claim to be the “most pro-union president in history” and snag an endorsement from the UAW for his reelection bid.
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The tentative contracts come after a long period when worker wages did not keep up with inflation, and after the union gave up some of its benefits around the time of the Great Recession, when the automakers were struggling to survive. The union managed to claw back many of those perks in the new deals, including restoring regular cost-of-living wage adjustments to offset inflation. It also eliminated wage tiers that had left newer workers on a lower pay scale.
The deals also appear to offer UAW workers some protection in the industry’s conversion to electric vehicles. Workers have worried that wages and job security will be lower in the industry’s new battery and EV factories. Both the Ford and GM agreements include language wrapping some of these new factories into the union’s main contracts with the automakers, though full details of what this will mean for wages are not yet available.
Organizing the ratification votes could take a week or more. If workers reject the deals, they will return to the picket lines. Many Ford workers have told The Washington Post they are happy with the deal but still need to pore over details published Sunday night.
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The agreements arrive during a period of heightened workplace activism in the United States. Fueled by a tight labor market, two years of high inflation and resurgent enthusiasm for unions, workers are striking in elevated numbers this year and reaping big results.
UPS employees threatened a nationwide shutdown and won their strongest contract in decades this summer. Some 75,000 striking Kaiser health-care workers won hardy wage increases, including a new $25 minimum wage in California. In Hollywood, 11,000 screenwriters followed by 160,000 actors went on strike, effectively shutting down production studios. After five months, screenwriters approved a deal in September that addressed many of their demands. Actors remain on strike. On Monday, Walgreens and CVS workers staged walkouts to protest wages and staffing shortfalls.
Workers “are saying, I don’t like my situation, my wages are stagnating, companies are making enormous profits … it’s time the companies gave us a share,” said Kate Bronfenbrenner, a senior lecturer on labor at Cornell University.
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The GM deal comes after the union unexpectedly ratcheted up its strike against the automaker Saturday evening, walking out of a GM factory in Spring Hill, Tenn., during an apparent impasse in talks. The UAW had been slowly widening its work stoppage since beginning it Sept 15.
Share this articleShareThe deals are a coup for the union’s relatively new president, Fain, who barnstormed the negotiations with grand demands and a more combative style than the UAW has shown in decades.
Speaking Sunday night, before news of the GM deal surfaced, Fain threw down the gauntlet to the rest of the auto industry, saying the UAW aims to unionize U.S. auto factories beyond the Big Three.
“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said during a Facebook Live address. “When we return to the bargaining table in 2028, it won’t just be with the Big Three but with the Big Five or Big Six.” In the past Fain has mentioned Toyota and Tesla as possible targets for organizing.
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He added that the UAW negotiated to have its new contracts end on April 30, 2028, so that workers can strike if needed on May 1, an international holiday commemorating workers’ 19th-century struggle for an eight-hour day.
“We invite unions around the country to align your contract expirations with our own so that together we can begin to flex our collective muscles,” Fain said. “If we’re going to truly take on the billionaire class and rebuild the economy so that it starts to work for the benefit of the many and not the few, then it’s important that we not only strike but that we strike together.”
The union didn’t get everything it wanted. It initially demanded a 32-hour workweek and pledges from the automakers that if they closed any factories, they would continue paying workers indefinitely to do community service, but those terms didn’t make the deals.
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The union also failed in its bid to restore defined-benefit pensions for all workers, but it did force the 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 have said little about the deals, leaving it up to the union to inform its members about the details and organize ratification votes.
The lowest-paid UAW workers are in for the biggest gains. In the Ford deal, published Sunday night, temporary workers who start at $16.67 an hour will be automatically converted to permanent status and wages of $24.91 or more. By the end of the contract they will reach the top wage of $40.82 an hour. Any new temp workers in the future must be converted to permanent status within nine months.
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The strike quickly hit the automakers with billions of dollars of costs through lost sales and other disruptions. GM said last week that it was losing $200 million a week. Ford said the strike had cost it $1.3 billion.
The work stoppage rippled out to affect many workers beyond the picket lines. The Big Three automakers temporarily laid off thousands of nonstriking workers in recent weeks, saying they couldn’t carry out their work because they depended on striking facilities. Auto parts suppliers have also laid off thousands as their orders from the Big Three dried up.
Some suppliers will have to hire new workers to replace employees who left for other jobs during the UAW strike, Ford’s chief financial officer, John Lawler, said last week.
Ambrose Conroy, an automotive expert and founder of Seraph Consulting, said he and his team are tracking an unusually large number of suppliers that are in “a critical financial position.”
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“These distressed suppliers have either not paid sub-suppliers or are nearly out of cash,” he said by email. Some will need financial support to resume production, and they could face demands from employees for higher wages given the UAW deals, he added.
The talks have been acrimonious. During frequent Facebook Live addresses to his members, Fain tossed the automakers’ early proposals in a trash can to signal his disgust. He railed against corporate greed and appeared in one webcast wearing an “Eat the Rich” T-shirt.
The automakers at times accused Fain of grandstanding for the cameras instead of engaging in real negotiations. They entered the talks acknowledging that inflation meant they needed to give workers significant raises, but they balked at the union’s big demands, saying those would leave the companies unable to compete with nonunionized rivals.
Fain, elected to the UAW presidency early this year, has frequently criticized the union’s leadership of recent decades, accusing it of being too complacent and cozy with industry. He has often praised the era of legendary UAW president Walter Reuther, who led the union with a more combative style from 1946 until 1970.
And he named the union’s walkout the Stand Up Strike in honor of the UAW’s “sit-down strike” of 1936-1937, when workers occupied General Motors factories in Flint, Mich., to push for better wages.
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