General Motors and the UAW have reached a tentative agreement on a new national labour contract, covering approximately 74,000 represented employees, the automaker and union announced at 4am EDT on Wednesday (26 September).
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The agreement is still, however, subject to UAW member ratification but a majority of GM’s union-represented workers are expected to vote in favour.
In a statement, GM said the tentative agreement includes a memorandum of understanding to establish an independent retiree health care trust, as well as other changes to the national agreement.
“Following ratification, implementation of the memorandum of understanding is subject to approval by the courts, and satisfactory review of accounting treatment with the Securities and Exchange Commission,” the automaker added.
“There’s no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship,” said GM xhairman and CEO Rick Wagoner.
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By GlobalDataThe national agreement paves the way for GM to significantly improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States, the automaker added.
“This agreement helps us close the fundamental competitive gaps that exist in our business,” Wagoner said. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”
The Detroit News this morning observed that both sides had touted the deal as one that addresses the competitive gap that exists with foreign-based plants that operate in the United States while protecting US factory jobs.
“We have reached a tentative agreement with General Motors Corp.,” UAW President Ron Gettelfinger was reported to have said at a 4am press conference at UAW headquarters in downtown Detroit. “We are recessing the strike.”
Gettelfinger told the Detroit News the union hopes to win ratification over the weekend. He also said the strike – effective from 11am Monday – had broken a log jam with the company over commitments on job security the union was seeking from the automaker.
He said he did not know if the UAW would bargain next with Ford or Chrysler, according to the Detroit News.
The paper said specific details of the tentative pact were not released but quoted Gettelfinger as saying that the deal includes a voluntary employees’ beneficiary association, or VEBA, that locks in retiree health care benefits for the next 80 years.
The Detroit News noted that GM had been pushing hard for a trust that will allow it to offload $US50bn in retiree healthcare obligations on the union. but Gettlefinger reportedly said it was the union that initially wanted a trust, and that retirees would be “exceptionally pleased” with the contract.
“Sources familiar with the talks” told the Detroit News on Tuesday that the two sides had essentially agreed a two-tier wage structure for non-manufacturing jobs and cash bonuses over the next four years – the payments would be $3,000 to start followed by three years of lump-sum payments roughly equal to 3% of annual wages.
“Two words were used in the announcement — competitive and investment,” labour expert Harley Shaiken of the University of California at Berkeley told the Detroit News.
“That’s the framework of this contract. GM gets an agreement that will make it more competitive and the UAW achieves investment in new plants and product,” he added, according to the paper.
Bargaining has continued through a national strike – the union’s first against GM since 1970 – that began Monday after nine days of post-deadline bargaining couldn’t bring the two sides together.
GM’s hourly workforce walked off the job two days ago and have been manning picket lines across the country since.
While protests remained peaceful on Tuesday, the strike’s impact was beginning to be felt elsewhere, especially among parts makers and GM’s Canadian factories that supply the automaker with parts.
