GM workers will remain on strike while voting on UAW's four-year contract proposal

Key Points
  • Roughly 48,000 United Auto Workers members have been on strike against GM since Sept. 16.
  • The work stoppage is the longest UAW strike against GM since 1970.
  • GM agreed to pay union members a $11,000 "ratification" bonus once the contract is fully approved.
United Auto Workers members on strike picket outside General Motors' Detroit-Hamtramck Assembly plant on Sept. 25, 2019 with Vermont Sen. Bernie Sanders (far left) in Detroit.
Michael Wayland | CNBC

DETROIT – The United Auto Workers' strike against General Motors will continue while union members vote on a new four-year labor contract, adding to the work stoppage's estimated $2 billion cost for the automaker, the union announced Thursday.

The decision for the UAW's 48,000 members with GM to continue manning picket lines instead of returning to work was made by roughly 200 local union leaders from across the country during a more than six-hour meeting Thursday in Detroit. Workers have been on strike for 32 days.

UAW spokesman Brian Rothenberg during a news conference following the meeting said the voting will start Saturday and is expected to be completed by Oct. 25, adding up to $100 million per day to the automaker's production losses, according to estimates from Wall Street analysts.

In a statement, GM said officials "encourage the UAW to move as quickly as possible through the ratification process, so we can resume operations and get back to producing vehicles for our customers."

"Our goal during these negotiations was to ensure that the future of General Motors is one that works for our employees, dealers, suppliers and the communities where we operate," the company said. "The agreement reflects our commitment to U.S. manufacturing through the creation of new jobs and increased investment."

UAW strike to continue till members ratify deal: Report
UAW strike to continue till members ratify deal: Report

The union expedited the vote, which normally takes about two weeks. Rothenberg said that local union leaders "felt strongly" it was important for their members to remain on strike during the voting.

Shares of GM closed Thursday at $36.19, down 1.3%. The stock, which had fallen by double digits during the strike, is currently down by about 7% since Sept.13 — the last trading day before workers started picketing.

The decision about the monthlong strike was announced as local union leaders approved the tentative deal between the union and GM that was announced Wednesday. The leaders had to approve the deal before rank-and-file members can vote on it.

The union won several financial gains for members as part of the accord but agreed to close four U.S. facilities, including three plants and a parts distribution center.

The deal includes 3% to 4% raises or lump-sum bonuses, the addition or retention of 9,000 hourly U.S. jobs and $9 billion in new investments, including production of an all-electric pickup for a plant in Detroit that was potentially slated for closure. UAW members also are expected to maintain their health insurance, which is considered "gold standard" and requires employees to cover roughly 3% of the total costs.

The agreement would also pay most union members an $11,000 "ratification" bonus once the contract is signed. Temporary workers, who have a shortened path to become permanent employees as part of the deal, would receive $4,500 ratification bonuses.

The new contract, if ratified by GM members, will be used as a template by the union for negotiations with Ford Motor and Fiat Chrysler.

General Motors and UAW reach tentative deal to end strike
General Motors and UAW reach tentative deal to end strike

Correction: This article was updated to correct the timeline for the vote. It's expected to be completed by Oct. 25.