GM, UAW reach tentative deal after weeks of contract negotiations
Jamie L. LaReau and Eric D. Lawrence, Detroit Free Press
Updated 10 min read
General Motors and the United Auto Workers have reached a tentative agreement, less than 48 hours after the union struck 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 morning hours Monday after solving questions about the automaker's joint-venture battery plants. The person asked to not be identified because they are not authorized to speak publicly about the deal.
Despite marathon bargaining sessions with GM that ran into the early morning hours over the past few days, the two sides had been at a standstill, prompting the union to order the walkout at Spring Hill late Saturday and ratcheting up the pressure on GM to get a tentative agreement.
Jason Coburn, 46, of Auburn Hills, center, shares a light moment of laughter on the picket line with Gary Phillips 63, of Harrison Twp, left, and strike captain Vern Armstead, 64, of Davisburg, Mich., at the GM Customer Care and Aftersales plant in Pontiac, Mich. on Monday, Oct. 30, 2023. General Motors and the United Auto Workers have reached a tentative agreement, less than 48 hours after the union struck the automaker's Spring Hill Assembly plant in Tennessee. The person familiar with the agreement said the main issue that was holding up a deal centered on how to include Ultium Cells LLC battery plants in a master labor contract between the UAW and GM.
Midafternoon, GM put out a statement by CEO Mary Barra that read: “GM is pleased to have reached a tentative agreement with the UAW that reflects the contributions of the team while enabling us to continue to invest in our future and provide good jobs in the U.S. We are looking forward to having everyone back to work across all of our operations, delivering great products for our customers, and winning as one team.”
The UAW also put out a statement confirming the deal saying: "Like the agreements with Ford and Stellantis, the GM agreement has turned record profits into a record contract. The deal includes gains valued at more than four times the gains from the union’s 2019 contract. It provides more in base wage increases than GM workers have received in the past 22 years."
The battery plant breakthrough
The person familiar with the agreement said the main issue that was holding up a deal centered on how to include Ultium Cells LLC battery plants in a master labor contract between the UAW and GM. Ultium Cells is a joint venture between GM and LG Energy Solution, so the legal language to allow for a master contract was complicated.
Ultimately, the agreement with GM is a breakthrough because it will allow for the joint-venture workforce to vote on unionizing future plants and then decide whether they want their own contract or to be part of the master contract. GM already is operating an Ultium Cells plant in northeast Ohio and it is building two more Ultium Cell plants: One in Spring Hill, Tennessee, and the other in Lansing, both expected to start operations within the next two years. GM will start building a fourth battery plant in northern Indiana with South Korean-based Samsung SDI next year and it will open in 2026.
"This is a home run by UAW and should be a boost for all workers," said Art Wheaton, director of Labor Studies at Cornell University. "Either through organizing new unions or getting increases to help avoid a new union. It is also a huge improvement in economic activity for the communities with UAW facilities as that money is spent locally. (UAW President) Shawn Fain dramatically surpassed my expectations on what he and his team were able to accomplish."
On Wall Street, GM's stock price bounced higher and lower throughout the day as investors digested the news of higher labor costs but at least an end in sight for the strike.
"For GM, this rips the Band-Aid off and gets a deal done to put this nightmare in the rearview mirror," said Dan Ives, managing director at Wedbush Securities. "Fain created a Broadway play and nightmare the last few months and caused massive disruption for GM and others. Barra needed to end this so GM can move on with its EV plans and, ultimately, this deal is less onerous than originally feared."
The details we know
The tentative agreement between GM and the UAW will match the financials of the Ford deal, the person said. That includes a 25% wage increase across the life of the 4½-year contract, to expire on April 30, 2028. There is a reinstatement of the 2009 cost-of-living adjustment (COLA) formula, the same profit-sharing formula reached with Ford, a three-year in-progression to the top wage and an end of tier wage scales by the end of the contract.
Like employees at GM's other facilities, those employed at the Ultium Cells plant in Warren, Ohio, near GM's former Lordstown Assembly plant, will automatically get an 11% increase in the first year of the contract, putting their pay at $35 an hour. By the end of the contract, GM workers will be close to $42 an hour.
This was confirmed by the UAW in its statement Monday afternoon: "The agreement grants 25% in base wage increases through April 2028, and will cumulatively raise the top wage by 33% compounded with estimated COLA to over $42 an hour. The starting wage will increase by 70% compounded with estimated COLA, to over $30 an hour."
The agreement also will allow GM employees at certain plants a chance to transfer to either the battery plants or electric vehicle plants when there is an opening to secure jobs as GM transitions to an all-electric future, the person said.
The workers who will now be moved to the main production rate include parts distribution workers and those at GM Brownstown, the UAW said in its statement. For the first time since they organized in the 1990s, GM salaried workers will receive a general wage increase, equivalent to that of hourly workers, the UAW said, confirming that the deal also brings two key groups into the UAW GM Master Agreement: those at Ultium Cells and GM Subsystems LLC.
"Many thought GM would never put more money on the table for their hundreds of thousands of retirees," the UAW wrote in a statement. "In this agreement, however, GM has agreed to make five payments of $500 to current retirees and surviving spouses, the first such payments in over 15 years."
The strikers will return to work through the ratification process. A UAW National GM council vote is expected later this week and if it approves the agreement, it will then go to local leaders to discuss with general members, who will then vote to approve or reject the deal.
Fain outlined the top items in the Ford contract Sunday night saying he and union negotiators "wholeheartedly" endorse it for ratification. He urged people to go to www.uaw.org/ford2023 for more details on the offer. Local union leaders at Ford will review the contract terms with members in the coming days and Ford members will then vote on it.
President Joe Biden, who is the first president to walk a picket line when he came to GM's parts plant in Belleville last month in support of the UAW, was asked briefly by reporters on Air Force One on Monday about the UAW deal with GM and he said, “I think it’s great,” giving a thumbs-up. He added, "I’ll talk to you later,” suggesting he’ll have more to say.
Later, the White House put out a statement by Biden that read, "I applaud the UAW and General Motors for coming together after hard fought, good faith negotiations to reach a historic agreement to provide workers with the pay, benefits, and respect they deserve."
He commended the UAW and GM for agreeing to immediately bring back all of the GM workers who have been walking the picket line. Biden said the contract is "a testament to the power of unions and collective bargaining to build strong middle-class jobs while helping our most iconic American companies thrive. The final word on these tentative agreements will ultimately come from UAW members themselves in the days and weeks to come."
Some GM strikers were still reluctant to react to the news. Michael Martin, shop chairman for UAW Local 174, which represents workers at GM's Customer Care and Aftersales Plant in Ypsilanti Township, declined to comment to a Free Press reporter until he has time to review the details of the deal.
Lansing Delta Township employee Mike Yakim, who had worked at Lordstown Assembly in Ohio for 10 years, said he is interested in learning more about how transfers to the battery plants would work because his family still lives in the Lordstown area and he might want to get back there to work at Ultium Cells. He also wants to know what kind of retirement packages would be offered.
The pressure was intense on GM to get a tentative agreement with the UAW, especially with the elevated strike action at Spring Hill Assembly, labor experts said after Ford and Stellantis both got deals done.
Auhsten Bartlett, 18 months old, holds a sign while his parents Edward Bartlett, not visible, a General Motors trim department employee, and Trista Bartlett picket with others outside the company's assembly plant, Tuesday, Oct. 24, 2023, in Arlington, Texas.
A big motivation is cost. On Tuesday, GM said the union's targeted Stand Up Strike would be costing it about $200 million a week in lost production revenues going into the fourth quarter based on the plants that were down at that time. That figure did not include GM's Arlington Assembly plant in Texas where GM builds its profit-making big SUVs, which the UAW struck later that day. It also did not include strike action against Spring Hill Assembly. Stellantis has not yet released a cost figure, but labor experts estimate it would be similar to GM's cost.
Tony Minus, 53, a Hi-Lo operator at GM Pontiac Redistribution waves to well wishers as he works the picket line in Pontiac on Thursday, Oct. 26, 2023.
"Now is the time where GM sees what the overall framework is with Ford and does it. Otherwise, they’re paying $200 million a week with the uncertainty of more plants going out," said Harley Shaiken, 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 running. The terms of the new contract at Ultium can act as a model and spur organizing at other Detroit Three battery plants, he said. It is also crucial to organizing the other nonunion battery plants.
"Organizing the battery plants could be key to organizing the other automakers," Shaiken said. "None of this will be easy but it opens new possibilities. In the wake of this stellar contract, the UAW can show a sharp contrast with wages and benefits at the nonunion automakers. They don’t have to say 'we promise' they can say 'we deliver.' ”
On the UAW side there was also pressure to wrap it up, Peter Berg, business professor at Michigan State University, said. The union's leaders know some members bear the burden more than others given that some have been on the picket lines since Sept. 15 when the strike started at GM's Wentzville Assembly plant in Missouri, Ford's Michigan Assembly plant and Stellantis’ Toledo North Assembly Complex. Fain has gradually expanded the strike since then to other facilities across the Detroit Three with about 45,000 of the 150,000 autoworkers on the picket line at the strike's peak.
"That starts to wear out" for those who've been on strike living off of $500 a week strike pay, Berg said. "At some point, the solidarity of the union slips away and that’s important to keep because they all have to vote on the agreement. You don’t want to get that kind of division.”
UAW members Todd Jacobs and Randy Howard picket at the Stellantis' Sterling Heights Assembly Plant picket along Van Dyke Road in front of the facility Monday, Oct 22, 2023.
Then there are the auto parts suppliers who are anxious and watching this closely, Berg said. Many have had to lay off hundreds of workers after the plants they supply parts to went idle due to the strike.
Now that all three automakers have reached a tentative agreement, they will have to figure out how to live with the consequences, said Erik Gordon, a labor expert and business professor at the Ross School of Business at the University of Michigan.
"The companies might or might not get four years of labor peace, you never know given the hostility from UAW leadership, but they will have to live with significantly higher labor costs and less strategic flexibility during a difficult transition to EVs," Gordon said. "UAW workers got large compensation and benefit increases during the life of the agreements, but the younger ones might have fewer job opportunities in the long term."
