General Motors Co. CEO Mary Barra and President Mark Reuss for the first time joined main table negotiations with the United Auto Workers on Tuesday morning, two people familiar with the situation told The Detroit News.
The hour-long discussion could signal that a proposed tentative agreement soon may be ready, especially after the UAW on Monday issued an “official call” for local union leaders to come to Detroit for a national council meeting Thursday for a “contract update.” Such a meeting is needed to send a tentative agreement to the union’s membership and to end the national strike, now in its 30th day.
“I think that Mary Barra joining negotiations today and the fact that the UAW has a meeting scheduled are good signs that a tentative agreement may be reached soon,” said Colin Lightbody, a former Fiat Chrysler Automobiles NV labor negotiator and president of HR and Labor Guru Inc.
A GM spokesman declined to comment. The Detroit automaker’s shares reversed declines Tuesday morning after the news broke and were rising more than 2%, a percentage point more than major market indexes. GM’s stock is down about 6% since Sept. 13 before the strike began.
Barra and Gerald Johnson, GM’s executive vice president of global manufacturing, met with UAW President Gary Jones and Vice President Terry Dittes last Wednesday, though the gathering was not at the bargaining table, said the person who was not authorized to speak publicly about the talks. After the Detroit automaker submitted a comprehensive offer to the UAW on Oct. 7, Barra “emphasized the need to get a comprehensive response from the union as soon as possible,” GM Vice President of Labor Relations Scott Sandefur wrote in a letter to Dittes Thursday.
The automaker said on Friday its offer had included higher wages, secured the union’s health care benefits and gave temporary employees a path to permanent employment. The UAW responded with a counterproposal that evening.
The union’s counterproposal included “all of your outstanding proposals that are at the main table and unsettled,” Dittes wrote in a letter to local union leaders Friday. He said the parties would have a tentative agreement if GM accepted it.
The UAW’s national council meeting is scheduled to convene at 10:30 a.m. Thursday in the Ambassador Ballroom of the Marriott Hotel at the Renaissance Center, according to the call letter. The UAW on Monday would not comment further on why the meeting is being held.
The parties had made progress over the weekend, but unsettled issues remain — one being “in-progression employees,” a source with knowledge of the situation told The News Monday.
It takes eight years for new permanent hires to get to the top of the pay scale. The union wants to reduce the time it takes to get to the top. GM, meanwhile, is looking to limit increases to total labor costs, which already are $13 per hour per employee higher than foreign automakers manufacturing in the United States, according to the Center for Automotive Research in Ann Arbor.
“A prolonged strike could burn significant cash and bring GM to its knees,” John Murphy, a Bank of America Corp. analyst, said in an investors note Tuesday, “but investors likely will also react negatively if management is perceived to have caved into labor’s demands and GM’s long-term competitiveness is threatened.”
Murphy estimates the first four weeks of the strike have cost the automaker more than $2 billion in pre-tax earnings — and permanent employees potentially $2,000 in profit-sharing checks. He added that the UAW’s demands for job protection could “potentially backfire and reduce long-term job security.”
“An important point we would note is that if GM does not remain profitable, the company cannot maintain employment, especially relative to transplant OEMs that the UAW has failed to unionize,” Murphy wrote.
A UAW spokesman was looking over the note early Tuesday afternoon. A GM spokesman did not respond immediately to a request for comment.
The 49,000 striking UAW members also began picking up their weekly strike paychecks, which was upped to $275 this week. The union’s executive board on Saturday voted to fast-track the 10% increase from January to “bring the power to use at the negotiations table,” UAW Vice President Terry Dittes said in a video message on Sunday.
The automaker and UAW have been exchanging and reviewing contract proposals since July. Discussions intensified when the two sides failed to reach a tentative agreement before the Sept. 14 contract deadline, and the union ordered a strike. Since then, a number of proposals have been shot down.
The UAW-GM strike isn’t the only strike the union is overseeing as it works through the negotiation process with two other companies: Aramark Corp. and Mack Trucks Inc. The UAW’s 850 members employed by Aramark, which provides maintenance at five GM facilities — Hamtramck, Warren, Flint, Grand Blanc and Parma, Ohio — have been on strike since Sept. 15.
More than 3,600 UAW members employed by Mack Trucks walked off the job Sunday over issues including wage increases, job security, wage progression, and health and safety.
bnoble@detroitnews.com
Twitter: @BreanaCNoble
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