UAW's New Contract With GM Scores Wins on Wages, Health Care and Temporary Workers
October 17 2019 - 2:00PM
Dow Jones News
By Nora Naughton and Mike Colias
The United Auto Workers scored major wins on wages, health care
and temporary workers in its new tentative labor pact with General
Motors Co., after calling a costly nationwide strike that has
halted work at the company's U.S. factories.
The strike will continue for now, pending a vote by a council of
UAW labor leaders gathered in Detroit. These UAW officials will
decide whether to end the strike immediately or continue it until
the proposed contract is ratified by rank-and-file members. A
decision is expected Thursday afternoon.
The strike, which is in its fifth week, is already the company's
longest nationwide walkout since 1970.
The agreement struck by union and company bargainers Wednesday
will move newer workers to the top wage in four years rather than
the eight years now, provide wage increases and lump-sum bonuses of
3% to 4% in each year of the contract and give temporary workers
full-time status after three years, according to details made
public Thursday.
The proposed contract also includes a $11,000 bonus for
full-time workers if the deal is ratified, as well as a $4,500
signing bonus for temporary workers, more than double their bonus
in 2015.
The UAW also succeeded in holding the line on health care, with
the 3% contribution workers pay for their benefits unchanged. GM
had entered into talks looking to increase the cost-share to help
defray fast-rising medical costs that totaled roughly $900 million
last year for its union-represented workforce.
While analysts say the deal is likely to increase GM's labor
costs, the contract would also let GM trim excess factory capacity
in the U.S., long a drag on its bottom line.
The company won the formal go-ahead from the UAW to close three
underused plants, including a major assembly factory in Lordstown,
Ohio, that had weighed on profits. Affected workers get special
assistance under the new contract, including buyouts of up to
$75,000 for the most senior workers.
During contract talks, UAW leaders had pressed GM to move more
factory production from Mexico to the U.S. -- even criticizing the
company publicly for not supporting American workers -- but the
agreement summary makes no such commitments.
The factory cuts are central to a restructuring plan GM laid out
last year aimed at boosting cash flow by $6 billion annually. A
fourth plant that GM had slated for closure will remain open,
eventually to build an electric pickup truck, people close to the
talks said.
"We see the agreement to close three out of the four plants
initially targeted as a 'win' for GM, keeping their restructuring
plan on track," said Jefferies analyst Philippe Houchois in an
investor note Thursday.
Still, any increase in labor costs for GM will likely be
replicated at Ford Motor Co. and Fiat Chrysler Automobiles NV, with
the UAW bargainers seeking to use the GM contract as a template to
reach similar agreements.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 17, 2019 13:45 ET (17:45 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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