UAW strike day 39: Majority of locals approving new GM contract
With a 60% majority of United Auto Workers so far voting yes on a new contract with General Motors Co., experts say it's difficult to see how members would reject the proposed new contract with General Motors Co.
As of Thursday morning, 55% of the workers still to vote would need to cast ballots against the deal for ratification to fail. But some of the automaker’s largest plants — producing GM’s most profitable vehicles — have yet to vote. Overwhelming no votes cast by large locals in Arlington, Texas, Wentzville, Missouri, and Fort Wayne, Indiana, together accounting for roughly 28 percent of UAW-GM’s 48,000 members, could sway the vote into negative territory.
“It’s really hard to see that this doesn’t pass,” said Kristin Dziczek, vice president at the Ann Arbor-based Center for Automotive Research. “The ‘Nos’ will have to be really, really strong over the next couple of days. I don’t know there’s that much opposition in some of the locals.”
No votes in Arlington and Fort Wayne could swing things the opposite way, and make one of the longest national strikes against GM even longer. But even some plants with a history of militancy have approved it — leading experts to believe the picketing will end Friday, day 40 of the national strike.
“It’s been a long strike, and I think people want to go back to work,” Dzizcek said. “They got the equalization of the pay scale for legacy and in-progression workers. They achieved the pathway for temporary workers. It may not be what everybody exactly wanted, but that’s the whole point of bargaining. It ends up in the middle somewhere.”
GM would close plants, including Lordstown Assembly in northeast Ohio, under the settlement, which is a “hard pill to swallow,” Dzizcek said. Transfers from those plants have gone in numbers to places like Bowling Green, Kentucky, and Spring Hill, Tennessee — plants whose hourly workers rejected ratification.
Other plants rejecting the contract include: Bedford Casting Operations in Indiana; Denver Parts Distribution Center in Colorado, Lockport Components in Lockport, New York, and the Lansing Redistribution Center.
Plants approving the contract include: GM's massive Flint Assembly plant, employing about 4,800; the Flint Metal Center and Flint Engine plants; Detroit-Hamtramck; Lansing Grand River Assembly plant; Bay City Powertrain; Pontiac Metal Center; Warren Technical Center; and Toledo Transmission.
"Right now by what I see it's likely to pass by a comfortable margin," said Marick Masters, business professor and former director of labor relations at Wayne State University.
More: UAW vote tracker
The new four-year deal with GM promises permanent jobs for temporary employees and eliminates the $12,000 cap on hourly profit-sharing payouts. It also promises an $11,000 bonus if members ratify the contract, which would more than offset the financial losses members took in the strike. Temporary workers would receive a bonus of $4,500 upon ratification.
The proposed contract would give 3% base-wage increases in the second and fourth years of the contract and would pay 4% lump-sum bonuses in the first and third years. It also allows GM to close four facilities: Lordstown, a parts distribution center in Fontana, California; Baltimore Operations in Maryland, and Warren Transmission in southeast Michigan.
While waiting on results of the UAW-GM ratification vote, the UAW on Thursday reached a tentative agreement with Mack Trucks Inc., ending a nearly two-week strike by about 3,600 UAW members employed at the manufacturer of heavy-duty Class 8 trucks. Employees were fighting for wage increases, job security, wage progression and health and safety issues. Details of the tentative agreement will be withheld until UAW members can be briefed prior to ratification.
The UAW wants all ballots turned in by 4 p.m. Friday. UAW leaders voted to keep its roughly 48,000 members out on strike while they vote on the contract. The contract is ratified if the combined majority of both skilled trades and production members approve it, but the UAW will renegotiate skilled trades issues if those members specifically vote it down.
If approved and the strike ends, GM is expected to startup production as early as Friday night at its major plants, like Flint Assembly where the automaker's profit-rich trucks are built.
Local 598 representing Flint employees was told by the company to be ready for production at 11 p.m. Friday, said Chad Fabbro, Local 598's financial secretary.
"Certainly General Motors will want to start their facilities, especially those with vehicles in high demand, as soon as possible," said Michael Robinet, executive director at IHS Markit. GM is also likely to start back up its parts supplier plants, especially those supplying the engines and transmissions.
There "may be a bit of a lag" in production depending on the amount of transmissions and engines available, he added, but GM will try to smooth any bumps in the road as much as possible. The strike has had a significant financial impact on GM, suppliers, dealers and employees, so "it's really incumbent upon [GM] to get the system back up as quickly as possible," Robinet said.
With the strike now in its sixth week, East Lansing-based Anderson Economic Group estimates that through Oct. 27 GM stands to lose $1.75 billion. Direct wage losses for all impacted employees at both GM and its suppliers are estimated at $989 million. Broken down, the UAW workforce is expected to lose $456 million and supplier employees $533 million.
Once UAW-GM employees return to work, it likely will take a few days for operations to ramp up again to full volume, said David Cole, chairman emeritus of the Center for Automotive Research. Suppliers would follow soon after.
“When the strike began, the suppliers, for example, didn’t shut down right away,” he said. “There’s a fair amount of inventory that will be available at GM plants that will enable the manufacturers and the assembly to get things moving very quickly.” Because of that inventory, most suppliers will have less pressure to restart immediately, he added.
Because of new automation and machines, it also should take a shorter time for GM to ramp up production again than when a national strike against GM in 1970 shut down the plant for 67 days.
Some suppliers already are preparing for the end of the strike: Magna International is developing plans to recall employees back to work and return to full production at the affected facilities, spokeswoman Tracy Fuerst said. When each facility will return, however, is dependent on GM’s production and the type of facility. Likewise, Nexteer Automotive says it is monitoring the situation.
"This is not GM's first rodeo," Robinet said. "They have been through this before and I'm extremely confident they are going to be able to get the system back up and running pretty quickly."
GM releases its third-quarter earnings on Tuesday. On Thursday, David Kudla of Mainstay Capital Management LLC predicted in a note that the "brunt of the strike will be felt in the fourth quarter" since GM will have to catch up on its inventory levels and shortage of top-selling vehicles.