Joe Krapohl, 64, of Otisville has spent more than 30 years working at GM as a toolmaker. He is a third-generation employee on the strike line outside the Flint Assembly Plant. Phoebe Wall Howard, Detroit Free Press
The proposed deal between General Motors and the UAW includes promised investments in U.S. manufacturing that would result in 9,000 jobs retained and created, people familiar with provisions of the proposal said.
GM and UAW announced Wednesday they had reached a proposed tentative agreement on day 31 of a nationwide strike.
The proposal does not end the strike. Workers were told to remain on the picket line at least until the union’s National GM Council reviews the proposal Thursday and decides whether to submit it to members for ratification.
Some details of the agreement were leaking out, and the creation and retention of 9,000 jobs is a boost from GM’s initial proposal to the union that offered a $7 billion investment in U.S. facilities over four years, resulting in 5,400 new or retained jobs.
Here are some other details of the proposed four-year contract:
- Increases of 3-4% in wages and lump sum payments. Precise details of the raises were not known. In the 2015 contract, workers got a 3% wage increase on years one and three and 4% lump sum payments on the alternate years.
- A ratification bonus of at least $9,000.
- Detroit-Hamtramck Assembly Plant will remain open. The plant will build an electric pickup, but it is unclear how many jobs the pickup would create or retain.
- Newer union workers who currently get only two weeks’ vacation a year will be able to take one of those weeks at a time of their choosing. In the previous contract, these employees were required to take both paid vacation weeks during scheduled plant shutdowns. Under the proposal, the second week of a plant shutdown would be considered a layoff and the workers could qualify for unemployment.
- As the Free Press previously reported, a deal was struck on a path to permanent employment for temporary workers, a key UAW demand.
The auto workers walked off the job at 12:01 a.m. Sept. 16, launching the union’s first nationwide strike in 12 years. Their four-year contract had expired at midnight Sept. 14.
UAW members were bitter about GM announcing plans in November 2018 to idle four U.S. plants. The workers argued it was time for them to be rewarded after making concessions a decade ago to help the automaker rebound from bankruptcy.
During negotiations, it became evident that workers were adamant that temporary workers should get a better deal from GM. The union during the recession a decade ago agreed to expanded hiring of temps by GM, Ford and what then was Chrysler. Those workers are paid $15-$19 an hour with no profit sharing, little time off and no job protection.
The final days of negotiations focused on what the automaker would commit to build at U.S. plants over the four-year life of the new contract. The union pressed for internal combustion vehicle commitments even as GM says it is moving toward an electric future and continues low-cost Mexican production of SUVs and pickups for U.S. sale.
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What’s next
If the National Council approves it Thursday, the proposal officially becomes a tentative agreement submitted to GM hourly workers for ratification. That process is expected to take a week or two.
UAW strikers were relieved to hear of the proposal but said they needed to learn details before they’re ready to ratify.
“My hope is that they release the white book, which is where all the language is. It’s the full contract with the changes that have been made and anything added,” said Dave Green, former president of UAW Local 1112 in Lordstown, Ohio, an assembly plant shuttered earlier this year. “I’ve been working at GM for many years. The (contract) highlights are great, but I want to know the lowlights too, so I need to go through the white book before I make a decision.”
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Green has been working at GM’s Bedford Casting Operations in Indiana since Aug. 19, after GM idled Lordstown.
“Obviously, I’m interested to see if there’s going to be any product allocated to Lordstown and a path for a lot of our brothers and sisters to find their way home to Lordstown,” said Green.
Sean Crawford, a union worker at Flint Assembly, said if the proposal details fall short of what he has been on strike over, he’s ready to continue to walk the picket lines.
“The devil is in the detail,” said Crawford. “I’m ready for a long strike, so if the contract’s bad, I’m going to vote no and most of the people I talk to feel the same way.”
‘Major gains for workers’
The UAW said late Wednesday morning that elected national negotiators voted to recommend that the National Council accept the proposal, which “represents major gains for UAW workers.”
“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” said UAW Vice President Terry Dittes, director of the union’s GM Department. “Out of respect for our members, we will refrain from commenting on the details until the UAW GM leaders gather together and receive all details.”
GM confirmed that a proposed agreement had been reached and provided no additional detail. GM stock closed up about 1% on the day at $36.65, but is down about 6% compared with the share price before the strike. The Center for Automotive Research estimated that the company is losing $450 million a week from the strike.
Confidence in Dittes
Flint Assembly worker Tommy Wolikow said he was confident the proposed tentative contract will be good, but a key issue for him to be able to ratify it is if it gives assurance that more products will be built in the U.S., rather than Mexico and Canada.
“Terry Dittes was doing an excellent job and he wouldn’t settle for less and so it should be a pretty good contract,” said Wolikow. “I’m still holding out to see it for myself, so I can vote on it. I really want GM to invest in Lordstown and Detroit-Hamtramck instead of investing in Mexico and Canada.”
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The deal was struck only after an acrimonious strike that included bickering over whether the company or union would pay strikers’ health care costs and GM obtaining a court order barring picketers from blocking entry at the company’s Spring Hill, Tennessee, assembly plant. Ten strikers were arrested there in two incidents.
Strikers in several locations in the early days of the stoppage temporarily held up nonunion workers, including salaried GM staff and employees with contractors, assigned to work in the strike-idled plants.
A heated beginning
After the union said its roughly 46,000 GM workers would strike at 55 U.S. locations, GM took the unusual step of making public an overview of what it said was its initial offer to the union.
“We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight,” the company said not long after the union said it would strike. “We have negotiated in good faith and with a sense of urgency.”
GM said that prestrike offer included more than $7 billion in U.S. investments over the four-year life of a new deal, more than 5,400 jobs, higher pay and what the company said would be improved benefits.
The union countered the next day that GM might have avoided a strike had it not “waited until just two hours before the contract expired to make what we regard as its first serious offer.”
Teamsters said they would honor UAW picket lines and not deliver vehicles finished before the strike to dealerships, but GM used non-Teamster truckers to move vehicles out of plants, at times prompting confrontations with picketers.
That was Day One.
The next day, GM ended health care for the strikers, kicking that cost to the union’s strike fund, which held nearly $800 million for costs such as health care and strike pay of $250 a week. While the union had anticipated taking over health care costs, it said it was blindsided by GM’s announcement.
GM backed off on the move 12 days into the strike, saying it would continue to cover health care.
Collateral damage
Many suppliers began temporary layoffs a few days into the strike, and GM plants in Canada and one in Ohio that is represented by an electrician’s union rather than the UAW shut down because they were short on parts.
On Oct. 1, GM’s Silao Assembly in Mexico, which builds the highly profitable Chevrolet Silverado and GMC Sierra pickups, was forced to shut down because of a parts shortage, bringing to at least 10,000 the number of workers laid off in North America because of the strike.
The Center for Automotive Research estimated:
- More than 575,000 workers nationwide are in industries directly or indirectly affected by the UAW strike, including supplier firms to GM and firms in the broader economy where striking and laid-off workers shop.
- Lost wages each week of some $857 million.
- Lost tax revenue includes $114 million in personal income tax and $108 million in lost revenue that supports social insurance programs such as Medicare and unemployment insurance.
Despite the tension, negotiators worked into the evening each day of the strike.
On Oct. 9, GM CEO Mary Barra, concerned about the lack of progress, met with UAW President Gary Jones and Dittes for an hour.
Sources at the time said that meeting reinvigorated talks that had slowed, but Oct. 10-11 were among the most acrimonious days of the monthlong strike. The union said GM was “playing games” and not taking it seriously. GM said the union was dragging its heels and outlined its latest offer in a letter to all its employees, including the strikers.
What happens next
The proposed tentative agreement will be reviewed by the National GM Council, which has been summoned to a meeting Thursday morning in Detroit. If the council approves it, the proposed pact will be submitted to UAW-represented GM employees for ratification.
The negotiations have been conducted under a cloud cast by a corruption investigation that has led to nine convictions of union and auto officials. Days before the contract expired, regional director Vance Pearson was charged with lavish spending of union money for himself, and court documents in the case implicated union president Jones, whose house was raided by FBI and IRS agents. Pearson was suspended from his position three weeks into the strike.
The ratification vote will be a measure of members’ trust of their leaders to negotiate a good deal that they must live with for the next four years.
The union chose to negotiation first with GM to create a template that it will soon take to Ford and Fiat Chrysler Automobiles, whose UAW contracts were extended while the union negotiated with GM.
All told, the UAW represents 148,000 workers for the three Detroit automakers.
Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.
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