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G.M. Workers Approve Contract and End Strike G.M. Workers Approve Contract and End U.A.W. Strike
(32 minutes later)
The United Auto Workers union approved a new contract with General Motors on Friday, ending a strike that idled tens of thousands of workers for almost six weeks. The longest nationwide strike against General Motors in half a century ended on Friday after a solid majority of the company’s union members delivered their support for the four-year contract hammered out by their leaders.
The union announced the result on its website. In a letter to local union officials, it said the contract was approved by about 57 percent of the nearly 41,000 members casting votes. The United Auto Workers union emerged with substantial wage increases and succeeded in ending a two-tier wage structure that had been a particular irritant in its ranks. It also won commitments to new G.M. investments in United States factories, while accepting the permanent shutdown of three plants already idled.
G.M. could call skilled-trades workers, who maintain production machinery, back to work as soon as Saturday to begin preparing plants to resume operations, two people with knowledge of the company’s plans said. After almost six weeks on picket lines, some of G.M.’s 49,000 union workers could be back on the job Saturday morning, though it may take days to get back to full production.
In some locations, production could resume as soon as Monday, they said. Other factories that ran short of parts during the strike may take more time to restart, they said. “We delivered a contract that recognizes our employees for the important contributions they make to the overall success of the company,” G.M.’s chief executive, Mary T. Barra, said in a statement.
The contract gives the union’s G.M. workers a series of wage increases and a path for temporary workers to become permanent employees. All full-time hourly workers will be able to reach the top wage of $32 an hour within four years, putting an end to a two-tier wage system that has chafed workers. Each U.A.W. worker will also be paid a bonus of $11,000. The U.A.W. said 57 percent of the nearly 41,000 members voting had backed the contract proposal. Now it will turn its attention to the other big Detroit automakers, Ford Motor and Fiat Chrysler. The union usually seeks to reach similar terms in a process known as pattern bargaining.
Health care terms are unchanged, with workers paying about 3 percent of the cost, well below the portion paid by G.M.’s salaried employees. Patrick Anderson, the chief executive of Anderson Economic Group, a research and consulting firm, said that G.M. lost an estimated $1.75 billion as a result of the strike. But the walkout inflicted a wider economic toll, particularly in the Upper Midwest and other areas dependent on the auto industry, causing layoffs at G.M. suppliers like Lear Corporation.
“It’s a rich contract for workers,” said Patrick Anderson, an economist based in East Lansing, Mich. “The health care coverage would be the envy of nearly every worker in America.” In total, striking G.M. employees and workers at the suppliers lost an estimated $988 million in wages, Mr. Anderson said. “It’s already affecting home repairs, vacations, savings for college, holiday shopping, restaurant purchases,” he said.
At the same time, the agreement allows G.M. to close three idled factories permanently, including one in Lordstown, Ohio. For G.M. workers, the contract will yield wage increases of 3 percent in the second and fourth years and 4 percent lump sum payments in the first and third years, similar to what the union obtained in 2015.
The closing of the Lordstown plant is one of the main sticking points for some workers voting against the contract. “We did everything that G.M. ever asked of us at times of concessions,” said Bill Goodchild, a member of Local 1112 in Lordstown. “We feel we deserve a product.” Even larger gains are in store for those in a category called “in progression,” the lower scale of a two-tier wage system negotiated in 2007 when the Detroit automakers were financially reeling.
But at the Detroit-Hamtramck factory, more than three-quarters of union members voted in favor. The plant was designated to close in January, but under the new contract, G.M. is supposed to invest $3 billion to upgrade and expand the factory. Workers hired after that date, about a third of the overall work force, started at about half the pay of veteran employees and had no prospect of reaching the top wage, currently $31 an hour. Over the course of the new contract, the disparity will be phased out, and those with four years’ experience will rise along with more senior workers to the new top level of $32 an hour.
The U.A.W. will now turn to negotiations with Ford Motor and Fiat Chrysler and seek similar terms. The union said Friday that it would announce soon which company it would approach next. “Yeah, that part is nice,” said Chaz Akers, 24, a worker at the Detroit-Hamtramck plant who earns $19.50 an hour after three and a half years with the company. “Everybody will be at the top.”
Michelle Kaminski, a professor of labor relations at Michigan State University, said the strike and the terms the U.A.W. won were a sign that organized labor was gaining strength. In addition to pay increases, G.M. workers will get bonuses of $11,000 for ratifying the contract. They will continue to pay 3 percent of their cost of health care, well below the percentage that G.M.’s salaried workers contribute.
“In the past couple of years, we’ve had quite a number of very successful teacher strikes around the country,” she said. The U.A.W. strike is a further example that “labor is still vibrant and when it fights, it wins,” she added. “It’s a rich contract for workers,” Mr. Anderson said. “The health care coverage would be the envy of nearly every worker in America.”
At G.M.’s Flint plant, which employees about 4,800 hourly workers, members of U.A.W. Local 598 approved the contract, with 61 percent of the votes in favor and 39 percent against. There were also rewards for temporary workers, about 7 percent of G.M.’s union work force, who will have a path to permanent employment after three years. About 900 of them will become full employees in January, the union said, and 2,000 more by 2021.
At Local 652, which represents about 1,400 workers at a sport-utility vehicle plant in Lansing, Mich., the contract was approved with a 75 percent majority. U.A.W. members were once the best-paid manufacturing workers in the country, and could count on steadily rising wages and benefits. But as the fortunes of the Detroit automakers slumped in the 1990s, wage growth slowed, and union ranks declined as the companies closed plants and automation reduced the need for laborers on the assembly line. The U.A.W. now has just under 400,000 members, down from 1.5 million in 1979, and 540,000 in 2006.
Workers in Spring Hill, Tenn., rejected the agreement by seven votes, while others in Bowling Green, Ky., voted it down by fewer than 100 votes. As part of the new contract, the company pledged to invest $7.7 billion in its United States plants, and another $1.3 billion in ventures with partners, providing a measure of job security. G.M. will put $3 billion toward overhauling the Detroit-Hamtramck plant, which had been scheduled to close in January. Three-quarters of the 700 workers there voted in favor of the contract.
This is a developing story and will be updated. At the same time, the agreement allows G.M. to close three idled factories permanently, including one in Lordstown, Ohio, eliminating excess manufacturing capacity at a time when auto sales are slowing. It also puts the company in a more stable position if the economy goes into a recession.
But the agreement, estimated to increase labor costs by $100 million per year, will deepen G.M.’s disadvantage compared with some competitors. Before the strike, labor — including wages, benefits and other expenses — cost G.M. about $63 an hour, according to the Center for Automotive Research. The cost for foreign automakers that operate nonunion plants in the South is about $50 an hour. Many of their plants pay less than $20 an hour.
Harley Shaiken, a labor relations professor at the University of California, Berkeley, said the U.A.W.’s wage gains and new rules for temporary workers could help the union’s efforts to organize Southern auto plants. Foreign-owned plants “have largely been impregnable to the U.A.W., but these gains well could put them over the top in future votes.”
In June, workers at the Volkswagen plant in Chattanooga, Tenn., narrowly rejected joining the U.A.W. The union was rebuffed by a significant margin in a 2017 vote at a Nissan plant in Mississippi.
Michelle Kaminski, a professor of labor relations at Michigan State University, said the G.M. strike and the terms won by the U.A.W. were a sign of labor’s renewed strength in recent years, along with teachers’ strikes in a number of places.
“Labor is still vibrant, and when it fights, it wins,” she added.
The contract was backed by substantial margins at several truck factories that have been earmarked for upgrades. At G.M.’s Flint plant, which has about 4,800 hourly workers, members of U.A.W. Local 598 approved the contract with 61 percent of the votes in favor.
At Local 652, which represents about 1,400 workers at a plant making sport utility vehicles in Lansing, Mich., the contract was approved with a 75 percent majority.
The closing of the Lordstown plant was one of the main sticking points for some workers voting against the contract. “We did everything that G.M. ever asked of us at times of concessions,” said Bill Goodchild, a member of Local 1112 in Lordstown. “We feel we deserve a product.”