GM Subsystems avoids strike, reaches tentative agreement with UAW

The United Auto Workers on Thursday reached a tentative agreement with GM Subsystems LLC, avoiding a strike at GM Michigan plants by the subsidiary's employees that could have halted production of trucks, EVs and Cadillac cars. 

Subsystems employees are not covered in the GM-UAW national contract and make nearly half the wage rate of a regular GM employee.

The dispute over how subsidiary employees are paid — among other issues — is likely to come up again as the UAW tries to unionize GM's battery plants. The first plant, opening in northeast Ohio later this year, is owned by Ultium Cells LLC, a joint venture between GM and LG Energy Solution. Employees at the four planned battery plants would also not be covered by the GM-UAW national agreement. 

As GM and its rivals pivot harder to electrification, it's likely the UAW will try to get the subsidiary and joint venture employees under the national agreement or at least negotiate separate contracts at the same time.

"What unions try to do is synchronize and standardize their contracts to maximize their bargaining power," said Marick Masters, a business professor at Wayne State University. "They're not going to allow GM to easily splinter their workforce into different types of ownership arrangements, and thereby dilute the bargaining power of the UAW."

The Subsystems agreement came right before a 10 a.m. strike deadline, with UAW Vice President Terry Dittes writing in a Thursday morning letter to members: "We will not be conducting a work stoppage at the four locations who we bargained an agreement for."

The four locations with Subsystems workers covered by the contract are: Lansing Grand River, where the Chevrolet Camaro and Cadillac CT4 and CT5 cars are made; Flint Assembly, home to GM's profit-rich heavy-duty trucks; and Orion Assembly, which recently restarted production of the Chevy Bolt EV and EUV after a months-long halt amid a battery recall. Factory Zero Detroit-Hamtramck Assembly Center, where the new GMC Hummer EV is made, is also covered by the agreement, but that plant is down for a production expansion project. 

Dittes wrote in his letter: "Details with be forthcoming and will not be released until ratification at all four locations is conducted."

GM spokesman Dan Flores confirmed the agreement Thursday in a statement: "General Motors and the UAW have reached a tentative agreement for GM Subsystems Manufacturing LLC employees. The UAW will now focus on the ratification process. We won’t be discussing details of the tentative agreement until the ratification process is complete."

The UAW said the tentative agreement will be presented to members of Locals 22, 598, 652 and 5960.

“This negotiation was drawn out and hard fought,” Dittes said in the statement. “We look forward to presenting the tentative agreement to members for their ratification.”

On Thursday, The Detroit News reported that hundreds of Subsystems employees would potentially go on strike after year-long contract negotiations. The UAW and GM Subsystems have been in contract negotiations since May 2021 for about 700 employees.

Specific issues at the table weren't released. Wages were a likely sticking point since Subsystems employees make substantially less than their GM counterparts covered by the UAW national contract.

Subsystems wage rates top out at $17 an hour, The News previously reported. By next fall, employees covered by the GM-UAW national agreement will make just over $32 an hour.

The wage disparity is a point of frustration for Subsystems employee Brittany Smith, 30, who stopped by UAW Local 5960's hall in Lake Orion on Thursday trying to get information about the tentative agreement. Smith, who works at GM's Orion Assembly plant, said she found out just minutes before the 10 a.m. strike deadline that the walkout had been called off.

"I was very much prepared to go on strike," she said. 

She expressed frustration that she makes $15 per hour while GM employees working alongside her could make roughly double that.

“It’s so freaking hard. Five, 10 years ago, if you made $15, you was making really good money. Now that’s not nothing. That’s not anything," she said. “We are just as important as anyone else there. We deserve the pay. We deserve the profit-sharing. We deserve the health benefits."

Separately, next year the UAW will negotiate new national contracts with the Detroit Three automakers: GM, Ford Motor Co. and Stellantis NV. This set of negotiations will be critical for the UAW as the automakers enter the next phase of the EV transition, which could mean more internal combustion jobs getting eliminated.