What to know about the UAW's agreement with General Motors

Breana Noble
The Detroit News

Some 200 local United Auto Workers leaders on Thursday voted to send a tentative agreement reached with General Motors Co. to the membership.

The more than 48,000 GM-UAW employees, including 17,000 in Michigan, have been off the job for 32 days — the longest national strike against GM since 1970.

'UAW On Strike' picket signs are stacked up in a pile at the GM Warren Transmission Operations plant before striking UAW members hear there may be a tentative deal.

The United Automobiles Workers' four-year proposed tentative agreement with General Motors Co. would give temporary employees a path to fully-vested employment, would not change healthcare plans, would eliminate the cap on profit sharing, would give wage increases or bonuses in each year of the contract and would offer a record ratification bonus, according to a union contract summary.

Here are the details:

What does the proposed tentative agreement say about pay?

The deal includes 3% base-wage increases in years two and four, and 4% lump-sum bonuses in the other two years. Those wage increases would raise top-paid production employees' pay to about $32.32, up from $30.46.

Permanent employees not making top wages — known as in-progression workers — hired before the effective date of the 2019 agreement would be eligible for top pay by the end of the four years of the contract, which could cut the current time window in half for some employees.

The agreement also includes ratification bonuses of $11,000, up from $8,000 in 2015, for permanent employees. Temporary employees would receive a bonus of $4,500 for ratification, up from $2,000 in 2015. The company would pay the bonuses in the second pay period following ratification of the agreement. A $12,000 cap on profit-sharing also is eliminated, and permanent employees will continue to receive $1,000 for every $1 billion in pre-tax earnings GM makes in North America.

Top seniority employees who receive pensions also will receive a one-time contribution of $1,000. Additionally, up to 2,000 legacy production employees and up to 60 skilled trades members will have an early retirement option between Dec. 31 and Feb. 28, 2020. They would receive a gross cash payment of $60,000.

What does the proposed tentative agreement say about job security and plant closures?

GM plans $7.7 billion in investments that represent 9,000 created and retained jobs, according to pages of the agreement obtained by The Detroit News. The 2015 contract included an $8.3 billion commitment.

Under the agreement, full-time temporary employees who have worked three or more years would be hired permanently starting Jan. 6 — a priority demand from the UAW and many members. Part-time temps who have worked at least two continuous years would become regular employees starting Jan. 1, 2020. Temporary employees working at least one year also will be eligible for paid and unpaid time off.

The agreement confirms the wind-down of three plants identified last November for closure. Those plants include Lordstown Assembly in northeast Ohio, Baltimore Operations in Maryland and Warren Transmission in southeast Michigan — all of which stopped operating earlier this year. Detroit-Hamtramck Assembly, which was slated to stop production in January, would continue to operate, building a new electric truck. That represents a $3 billion investment and approximately 2,225 new jobs. A customer care and aftersales plant in Fontana, California, also would close during the term of the agreement.

Other investments from GM include $200 million into the Warren Tech Center's pre-production operations for a new electric vehicle program, which would retain roughly 75 jobs. GM would invest $1 billion in Lansing Delta Township and Spring Hill assembly plants for a next-generation midsize SUV that represents 5,000 jobs. Wentzville Assembly in Missouri would get $1.5 billion for a next-generation midsize pickup truck to retain 2,000 jobs. The final $2 billion would go to refurbishments at U.S. plants.

GM also plans to build as part of a joint venture a battery-cell manufacturing plant in northeast Ohio's Mahoning Valley, where Lordstown resides, a GM spokesman confirmed Thursday. The facility would create 1,000 manufacturing jobs, but the investment is not included under the contract with the UAW.

The agreement  dissolves the GM Center for Human Resources, a jointly operated training center with the union that is funded by the automaker. The decision comes after a federal corruption investigation has found officials misused the funds for bribes and defraud workers, according to prosecutors. The existing building overlooking the Detroit River will be sold.

Picketing United Auto Workers Richard Rivera, left, and Robin Pinkney react to news of a tentative contract agreement with General Motors, in Langhorne, Pa., Wednesday, Oct. 16, 2019. Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill.

What does the proposed tentative agreement say about health care?

The deal preserves health insurance benefits without increases to out-of-pocket costs. That means zero premiums and zero deductibles and a co-pay cap expected to average $700 per year for permanent employees. Hourly UAW-GM employees pay about 3% of their total health care costs.

When will the strike end?

Roughly 200 local union leaders on Thursday voted to end the strike after ratification. The UAW wants to have ballot totals from local union halls by Oct. 25. By then, the strike would have continued for 40 days. Voting will begin on Saturday.

More: UAW-GM contract offers $11,000 bonus, pay raises, no change in health care

What happens if the tentative agreement does not receive approval from the membership?

If the tentative agreement does not receive a majority of voting members' support, then it is back to the drawing board for GM negotiators and the UAW's GM bargaining committee to hammer out a deal on the objections members raised.

The union also potentially could switch to Ford Motor Co. or Fiat Chrysler Automobiles NV to reach a deal if it feels it could make better progress there. Talks within subcommittees between the union and those companies have made progress, according to the union, and most had gotten to a point where they are waiting for GM to set the pattern. If the work stoppage at GM continues, however, such a decision could be devastating to the Detroit automaker and its employees on strike, experts said.

What is the likelihood members will ratify a contract?

After more than a month on the picket lines, many UAW members say their pocketbooks are hurting, they are tired and they are ready to get back to work, but they also are determined to get what they consider is a fair share of the billions in profits GM has posted over the past several years. The union and its members have said health care, wages, job security and securing a pathway for temporary workers to reach permanent seniority are some of their top priorities. Former employees at Lordstown Assembly showed up in force Thursday at the Renaissance Center to express their dissatisfaction over the planned closure of the Ohio plant.

The U.S. and UAW flags blow in the wind in behind 'UAW On Strike' picket signs at the GM Warren Transmission Operations plant before picketers hear there may be a tentative deal to end the strike.

When will GM employees on strike get their next paycheck?

UAW members on strike will get their next paycheck the Friday after they return to their jobs and work a week. Members who show up for picket duty, however, do receive strike pay of up to $275 per week; the next checks will be distributed starting Monday. GM is continuing to pay for health care benefits.

More:UAW membership relieved for a deal, ready to get back to work

What does a proposed tentative agreement mean for GM?

Because of the strike, analysts and economists estimate GM has lost more than $1.5 billion to more than $2 billion in profits. They also forecast the work stoppage may be affecting the availability of vehicle trims and colors on dealer lots — and therefore affecting sales. GM in a statement Thursday said it encourages the UAW to "move as quickly as possible through the ratification process." It will develop a contract implementation plan during the ratification process.

What about other affected workers?

The work stoppage at GM has reverberated up the supply chain, affecting thousands of employees. East Lansing's Anderson Economic Group estimates some 175,000 employees have been directly affected and have lost $624 million in wages from the month-long strike. GM itself has had to furlough more than 10,000 non-UAW employees in Canada, Mexico and Ohio.

For now, the work stoppage is ongoing, though now that the UAW-GM national council has sent a tentative agreement to the membership, employees at GM suppliers could be returning to work soon. A ratified contract, however, is not guaranteed.


Twitter: @BreanaCNoble