UAW-GM strike ends, union turns to Ford
The longest nationwide strike against General Motors Co. in nearly 50 years ended Friday, when a majority of members ratified a new four-year deal with General Motors Co. and the union turned its attention to its next target.
The week-long vote ends a 40-day strike that cost members thousands of dollars each, GM as much as $2 billion in lost profits and the automaker's shareholders more than 5% in the value of their stock. The walkout idled parts of the automaker's sprawling supply base, weakened economic growth and raised fears the Michigan economy risked slipping into recession.
“I’m happy,” said David Parnell Jr., 46, of Detroit, a GM Flint Assembly employee. “We got what we could out of this fight, and in 2023 it’s going to be a different fight. The membership believes in the leadership and the guys that sat at the table, and they got the best deal they could get for us at this time.”
Members ratified the contract 57% to 43%, pushed by large totals at the automaker's "Big Three" truck and SUV plants in Flint, Fort Wayne, Indiana, and Arlington, Texas. The margin of approval overcame resistance fueled by GM's move last November to close four U.S. plants — only one, Detroit-Hamtramck Assembly, survived the contract talks and ratified the deal.
“General Motors members have spoken,” said UAW Vice President Terry Dittes, director of the UAW-GM Department. “We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation. Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working class Americans.”
The ratification comes amid a years-long federal investigation into union corruption that has charged 11 individuals and convicted 10, including a retired UAW vice president. The continuing probe also has implicated President Gary Jones and his predecessor, Dennis Williams, and included coordinated government raids on their respective homes. Neither has been charged.
Under the new UAW-GM deal, the two sides agreed to abolish their joint-training Center for Human Resources, a company-funded organization that drew the attention of federal investigators, and to sell the building overlooking the Detroit River. Financial mismanagement at the joint UAW-Fiat Chrysler Automobiles NV training center spawned multiple convictions that included prison sentences for former FCA vice president and a former union vice president.
UAW-GM members walked out over demands for better wages, a shorter path for part-time workers to become full-time employees and retaining private health care coverage considered some of the best in the country. The union largely succeeded, winning wage increases and lump-sum bonuses, eliminating the $12,000 cap on hourly profit-sharing payouts and essentially killing the "two-tier" wage structure adopted in 2007 over fierce internal resistance.
"They both won some and they both lost some," said Kristin Dziczek, vice president of industry, labor and economics at Ann Arbor's Center for Automotive Research. "Negotiations are supposed to cut things straight down the middle."
The ratified contract netted 48,000 GM-UAW members a record $11,000 bonus, an eye-popping sum that would cost Ford even more than GM because it carries roughly 7,000 more UAW members on its U.S. payroll. As is customary, the economics of the UAW-GM deal will be expected to "pattern" subsequent agreements this fall with Ford and Fiat Chrysler Automobiles NV.
In a statement, GM CEO Mary Barra said: "We delivered a contract that recognizes our employees for the important contributions they make to the overall success of the company, with a strong wage and benefit package and additional investment and job growth in our U.S. operations. GM is proud to provide good-paying jobs to tens of thousands of employees in America and to grow our substantial investment in the U.S."
The final agreement doesn't differ widely from what GM presented to the UAW on Sept. 14. The UAW blamed GM for presenting its offer too close to the contract deadline, an offer that GM touted as offering wage increases, lump-sum bonuses, sweetened profit-sharing and an industry-leading health care plan. In response, the union launched a national strike that continued for nearly six weeks.
"Ford and Chrysler are going to think this is a little expensive," said Arthur Schwartz, president of Labor and Economics Associates in Ann Arbor and the former general director of labor relations at GM. "But the UAW's been known to adjust."
Members on picket lines and social media expressed conflicting emotions. Some said the contract was great. The lump sum bonuses could be lucrative, pay raises sounded stellar, and health care wouldn't change. Others argued the contract lacked the job security a large portion of UAW members longed for. Many wished to prevent the creative ways GM could close plants, pointing to moves to "unallocate" facilities in the U.S. and Canada last year.
Back to work
With ratification of the contract, employees will begin to report to work as instructed by GM, according to the UAW. Production at component and assembly plants will start as early as Saturday, but each plant will have its own return-to-work plan, said Jim Cain, a GM spokesman. GM's priorities will be on shipping service and repair parts to dealers, which have had low inventory levels because of the strike.
"This is good news for our working families and our economy," Gov. Gretchen Whitmer said in a statement. "Michiganders are some of the hardest working people in this country, and they deserve to be treated with respect."
UAW Local 276 at Arlington Assembly in Texas and Local 2209 at Fort Wayne Assembly in Indiana essentially finalized the deal on Friday. Arlington, which produces GM's full-size SUVs, has more than 5,000 hourly employees represented by Local 276. And Fort Wayne, a pickup truck builder, has about 4,231.
More: UAW vote tracker
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.
Plants rejecting the contract include: Lansing Delta Township; Tonawanda Engine in New York; Bedford Casting Operations in Indiana; Denver Parts Distribution Center in Colorado, Lockport Components in Lockport, New York, and the Lansing Redistribution Center.
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 ratification bonus, 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 Assembly in northeast Ohio; a parts distribution center in Fontana, California; Baltimore Operations in Maryland, and Warren Transmission in southeast Michigan.
New investments coming
GM said on Friday that it plans “to move forward with opportunities for future investments” in northeast Ohio’s Mahoning Valley, where its sprawling 6.2 million-square-foot Lordstown complex is located.
GM is now prepared to sell the complex to Lordstown Motors Corp., a new electric vehicle startup that plans to build electric pickups for commercial fleet customers. Initially, the company will employ 400 customers. The company is led by Steve Burns, former CEO of Workhorse Group Inc., another electric vehicle startup based in Cincinnati.
GM Lordstown would become one of a few closed auto assembly plants to remain an auto manufacturer, but the decision by GM to close the plant is still difficult for the economically struggling valley. Represented by UAW Local 1112, Lordstown Assembly was one of the largest employers in the valley for decades. As recently as 2016, the plant employed 4,500 until Chevrolet Cruze sales tanked, leading GM to cut shift after shift and then to shut down Cruze production in March.
“It’s the end of an iconic plant and possibly an iconic union,” UAW Local 1112 President Tim O’Hara said. “We’ve seen the writing on the wall, but now we know it’s over.”
The automaker plans to build a battery-cell manufacturing site at an undisclosed location in the valley. The facility is expected to draw an investment of $1 billion that would bring 1,000 jobs to the region. The Detroit News reported that the facility would be a joint venture with LG Chem Ltd., which already makes batteries for GM’s Chevrolet Bolt.
“We’re pleased to hear that GM and the UAW have finally reached a deal,” Youngstown/Warren Regional Chamber President James Dignan said in a statement. “Although a painful decision for many members in our community, we now know what the future holds. We look forward to working with GM on their pending investment in the Mahoning Valley and growing our partnership of 50-plus years in next-generation auto manufacturing.”
The Detroit automaker will invest $5.7 billion into five plants and $2 billion into U.S. plant refurbishments over the life of the four-year deal. The $7.7 billion commitment represents 9,000 new and retained jobs.
The tentative agreement saves the Detroit-Hamtramck plant, previously slated to close. A $3 billion investment at Detroit-Hamtramck would create 2,225 new jobs to produce electric trucks and vans as well as battery modules at full volume. The Chevrolet Impala and Cadillac CT6 sedans are being built at the plant that employs 700 people until January.
“It is important that Detroit-Hamtramck Assembly Plant will remain open under this agreement,” Wayne County Executive Warren C. Evans said in a statement. “This is a win for workers at the plant and for the communities where it resides. The decision to build electric pickups at Detroit-Hamtramck was a prudent and necessary one and further establishes Wayne County as the emerging epicenter of next generation mobility innovation.”
GM also will invest: $200 million into Warren Technical Center's pre-production operations for a new electric vehicle program; $1.5 billion at Wentzville Assembly in Missouri to build the next-generation of midsize pickup trucks; and a combined $1 billion at Lansing Delta Township and Spring Hill Assembly in Tennessee for a next-generation midsize SUV.
Also on Friday, the UAW's Aramark Corp. members ratified a new contract. The UAW's 850 Aramark members provide maintenance services at five GM facilities — Hamtramck, Warren, Flint, Grand Blanc and Parma, Ohio. They have been on strike since Sept. 15.
And the UAW 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.
"I'm happy I guess," said UAW Local 22 member Nelson Worley. "We're ready. We're ready to go back."