G.M. and U.A.W. Reach Deal That Could End Strike

With negotiations at an impasse last month, the union declared the first nationwide strike against a Detroit automaker since 2007. The talks appeared to turn rancorous, at least episodically, with the union negotiator declaring this month that the U.A.W. “could not be more disappointed with General Motors.” G.M.’s chief executive, Mary T. Barra, inserted herself directly into the talks on two occasions over the last week.

One of the union’s aims was to reduce pay disparities between those hired before and after 2007, when a two-tier pay scale was negotiated to help ease G.M.’s financial distress. The union also wanted G.M. to make firm commitments to producing future vehicles in the United States, but said the company had resisted doing so.

G.M. entered the talks hoping to reduce its health care costs and limit increases in wages and benefits. Last week the company said it had offered to invest $7.7 billion in its domestic plants from its own coffers, and $1.3 billion through ventures with other companies, including a battery plant that would hire union workers under a separate contract. It proposed to locate that plant near Lordstown, Ohio, where a G.M. factory assembling the Chevrolet Cruze ceased production this year.

The tentative agreement, if it becomes final, would solve the most immediate challenge facing Ms. Barra, and should provide certainty in calculating labor costs over the next four years.

“It’s critically important to have certainty about the costs the manufacturers have to plan for,” said Mark Wakefield, a managing director at AlixPartners, a consulting firm with a large automotive practice. “It’s important to get a deal that’s fair and equitable, but also one that doesn’t put you at a competitive imbalance.”

When G.M. and the U.A.W. last negotiated a contract in 2015, a tentative settlement failed to win ratification, and the terms had to be reworked. But the workers never walked out, as they had for 67 days in 1970, when their ranks exceeded 300,000.

Article source: https://www.nytimes.com/2019/10/16/business/gm-uaw-strike.html?emc=rss&partner=rss