General Motors joined Ford and Stellantis in reaching a preliminary agreement for a new agreement with the automobile union in the United States, opening the door to ending the worst workers’ strike in the sector in the last 25 years. The white smoke between the parties comes two days after the United Automobile Workers (UAW) extended the strikes to the main General Motors plant in the United States, the one in Spring Hill, Tennessee, where engines are manufactured.
Although the exact terms of the agreement are still unknown, they are expected to be similar to what was agreed with Ford on Wednesday and Stellantis on Saturday, including an immediate 11% increase in the hourly wage of union workers and an additional 14% during the four and a half years of contract. The agreement would also include a cost of living adjustment to protect employees from inflationary increases.
It seems like the end of six weeks of strike that have not only hit the waterline of Detroit’s Big Three but have left historic moments such as President Joe Biden’s visit to one of the workers’ picket lines in Michigan, the first time that a president was joining a union demonstration.
Since the agreement expired on September 15, the union has called on more than 14,000 workers to stop production at GM plants in Missouri, Texas, Tennessee and Texas, which will surely be reflected in their production numbers. this year and the performance of its actions. The strike has halted factories where some of its best-selling models are produced, including the Cadillac Escalade, Chevrolet Colorado and Chevrolet Traverse.
The agreement reached by the union chaired by Shawn Fein, although far from the 40% increase they initially requested, is historic. If ratified, the agreement will allow the salary of more senior employees to go from the current $32 per hour to $40, raising their salaries to $84,000 annually. In the case of the least experienced, the increase in payroll could be up to 150%.
The Ford and Stellantis concessions are along the same lines. Not only have they agreed to pay more for labor in their factories, but the union has been promised new models at plants they had already threatened to close.
The victory of the unions is an implicit defeat for the three motor giants in the United States, which will see their ability to compete with Tesla and other non-union brands limited. Its operating costs were already higher than those of Toyota and Honda before the strike, a situation that has now worsened significantly. This is in the midst of the transition towards electric fleets, with multimillion-dollar investments in batteries and new battery-powered models.
Mary Barra, CEO of GM, had already warned of the potential impact that an agreement of this nature could have. “We have to make sure we have an agreement that allows us to compete and win in what is already a challenging electric market,” she said. In the end, they had to give in. Continuing with the strike would have been much worse.