US carworkers suspend strike after reaching tentative deal with GM

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General Motors has reached a tentative deal with the United Auto Workers union to end a six-week strike that also hit Ford and Stellantis, an agreement that will bring to an end the first co-ordinated walkout at the three largest US carmakers.

GM has agreed to a 25 per cent hourly pay rise over the course of its four-year deal, the union announced on Monday. The agreement also brings back cost-of-living allowances for workers and includes one-time bonuses for retirees, according to people familiar with the details.

The terms are similar to a tentative deal struck with Ford and the union last week. Stellantis reached its own agreement on Saturday.

“We wholeheartedly believe that our strike squeezed every last dime out of General Motors,” Shawn Fain, UAW president, said in a video released late on Monday. The union was “officially suspending” its strike against Detroit’s three automakers, he added.

Starting on September 15, UAW members began to walk off the job as their employment contracts expired without a new agreement in place.

Workers picketed selected plants and parts warehouses with no advance warning to the automakers, a strategy that disrupted carmakers’ operations while preserving the fund the union uses to pay striking workers. Nearly 50,000 of the UAW’s 146,000 members eventually walked out.

Union leaders announced new plants to target when they decided that negotiations were stalling, eventually expanding the strike to the most profitable assembly plants that manufacture pick-up trucks and SUVs.

The tactics, masterminded by the newly elected Fain, served to pit the carmakers directly against each other as bargaining wore on.

The autoworkers sought to restart annual cost of living wage increases that ended during the global financial crisis and to improve job security as the industry transitions to electric cars that require significantly less labour to produce.

The tentative agreement is the latest in a series of new contracts offering substantial pay raises to unionised workers in occupations from nurses and UPS drivers to Hollywood screenwriters.

“[UAW’s deal] is a sign of changing times,” said Marick Masters, a labour relations professor at Michigan’s Wayne State University. “The labour movement has been emboldened by recent activism, and this adds to that in a very significant way because of the losses associated with the strike and the success that the union had.”

Hours after announcing its deal with Stellantis, the UAW escalated action against GM over the weekend, hitting its Spring Hill, Tennessee, plant. GM told analysts last week that the strike was costing the company $200mn a week, totalling $800mn in earnings before interest and taxes.

“GM is pleased to have reached a tentative agreement with the UAW that reflects the contributions of the team while enabling us to continue to invest in our future and provide good jobs in the US,” Mary Barra, GM chief executive, said on Monday.

The prospective deal will raise perennial questions about the competitiveness of the Detroit Three’s plants compared with non-unionised factories run by Honda, Toyota and Tesla in the US.

Ford said last week that the strike had cost it $1.3bn in operating earnings, while Stellantis has not said how much the strike has cost the company. However, debt rating agency S&P on Monday upgraded Ford to investment-grade, citing its improving margins and a cost reduction programme that will “more than offset higher labour-related costs”.

The UAW’s deals with all three carmakers still need to be ratified in a vote by union members before going into effect, but Fain directed 18,000 striking GM workers to return to their jobs. Union members who participated in the strike at Ford and Stellantis are already returning to work.

Masters said that he expected rank-and-file members to vote in favour of the deal by “a significant majority”.

US president Joe Biden flashed a thumbs-up when reporters asked about the deal as he boarded Air Force One on Monday, saying: “I think it’s great.”

“These record agreements reward auto workers who gave up much to keep the industry going during the financial crisis, more than a decade ago,” Biden later said at a White House event. “These agreements ensure the iconic Big Three can still lead the world in quality and innovation.”

Fain said: “For the last several weeks, analysts and pundits were crying that our union was going too far, that we were demanding too much. We didn’t listen to them and we never let up.”