Autos

UAW members approve labor deal to end strike with GM; union selects Ford next

Key Points
  • The UAW's strike against GM will end at 40 days following a majority of union members voting in support of a new four-year contract.
  • Some of the union's 48,000 members with GM are expected to return to work as early as Saturday.
  • The strike, which started Sept. 16, is estimated to have cost the company more than $2 billion.
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United Auto Workers and General Motors ratifiy a four-year contract

DETROIT — The United Auto Workers gave final approval Friday for a new four-year labor contract with General Motors. The ratification brings to an end the union's 40-day strike, which cost the automaker well over $2 billion.

Some of the union's 48,000 members with GM are expected to return to work as early as Saturday, showing the automaker is wasting no time in recouping lost production from the work stoppage, which started Sept. 16.

The contract was supported by 57% of members who voted, according to final results from the union. Less than 41,000 of the UAW's roughly 48,000 workers with GM cast ballots. 

GM CEO and Chairman Mary Barra, in a statement, said the deal recognizes the company's 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 shares were up about 1% during after-market trading following reports of the ratification. The stock closed at $36.74, up 2.57%.

The union on Friday said it will negotiate with Ford next, followed by Fiat Chrysler. Both companies had agreed to contract extensions so the union could concentrate on talks with GM. The union will use the GM deal as a template for negotiations with the other Detroit automakers.

Mary Barra, chairman and chief executive officer of General Motors Co. (GM), right, and Gary Jones, president of the United Auto Workers (UAW), shake hands during a GM event at the Renaissance Center in Detroit, Michigan, U.S., on Tuesday, July 16, 2019.
Jeff Kowalsky | Bloomberg | Getty Images

"As America's No. 1 producer of vehicles and largest employer of UAW-represented autoworkers, we look forward to reaching a fair agreement that helps Ford enhance its competitiveness and preserve and protect good-paying manufacturing jobs," the company said in an emailed statement.

UAW Vice President Terry Dittes thanked the union's GM members for their sacrifice during the strike, which was the longest national walkout for the union against any Detroit automaker since the 1970s.

"We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation," he said in a release. "Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working class Americans."

The UAW won several financial gains for members as part of the deal, including annual lump-sum bonuses or raises and $11,000 ratification bonuses, but it also agreed to not block the company's plans to close four U.S. facilities, including three plants and a parts distribution center.

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UAW strike to continue till members ratify deal: Report

GM also agreed to invest $7.7 billion in current plants, add thousands of new jobs and shorten the time period for workers to achieve top pay of more than $32 an hour. Union members also maintain their health insurance, which is considered "gold standard" and requires employees to cover roughly 3% of the total costs.

The national strike, which caused widespread layoffs at auto suppliers and GM's operations in Canada and Mexico, was the longest for UAW members against GM since a 67-day walkout in 1970.

Many expected GM workers to ratify the agreement, but there was some doubt due to the planned plant closures and growing mistrust of union leadership amid a widening federal probe into corruption in the UAW.

The union on Friday also confirmed ratification of a new contract with Aramark, a third-party company that provides janitorial and maintenance services to GM's plants. The contract covers 850 Aramark employees who have been on strike since Sept. 15, a day before the GM workers.