Cleveland, Ohio – Work has resumed as several General Motors plants following the ratification late last week of a contract between the automaker at the United Auto Workers (UAW). Workers had been on strike for six weeks, fighting for higher wages and plant investments.
As is typical with negotiations, neither side got everything that it wanted. UAW members won $11,000 ratification bonuses, a potentially richer profit sharing system, scheduled raises for some years in the four-year contract, bonuses for others, and a clear path to transition temporary workers into full-time employees.
But they couldn’t save most of the plants.
GM’s Lordstown Assembly in Ohio will remain closed as will plants in Baltimore, Maryland, and Warren, Michigan. The Detroit Hamtramck plant that had made the Chevy Volt plug-in hybrid stay open to build an electric pickup.
“General Motors members have spoken,” said Terry Dittes, UAW Vice President and Director of the UAW-GM Department. “Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working class Americans.”
Contract talks take place every four years, but strikes have been rare throughout the past 20 years. Some recent strikes have lasted only a day. So, many industry watchers were surprised to see this strike stretch out to five weeks before a deal was reached and another week while workers voted on ratification.
The costs for the prolonged work stoppage will fall almost entirely in GM. The $11,000 ratification bonus that workers will receive will cover the bulk of their lost wages (although signing bonuses are standard, so a quicker resolution could have led to bonuses without lost wages). Estimates on the cost to the automaker vary, ranging from $1 billion to $2 billion in lost income. As the work stoppage wore on, plants in Canada and Mexico closed because of a lack of U.S.-made components.
GM CEO Mary Barra, who got involved in talks toward the end of negotiations, said the new deal “recognizes our employees for the important contributions they make to the overall success of the company, with a strong wage and benefit package and additional investment and job growth in our U.S. operations.”
With the GM contract finalized, UAW officials say they’ll turn their attention to Ford next. Typically, the union picks one company to create a standard contract and works with Detroit’s other major automakers to accept variations on that deal – a practice known as pattern bargaining.
Like GM, Ford has slashed production in recent years on small cars and sedans in favor of trucks and SUVs. But the practice wasn’t as problematic for the UAW because when Ford cancelled the Focus small car, it replaced that vehicle with the Ranger pickup and Bronco SUV at the Michigan Assembly Plant in Wayne, Michigan. The cancellation of the Fusion sedan scheduled for next year cuts production in Hermosillo, Mexico.
So, it remains to be seen if Ford will be willing to offer the large signing bonuses, higher wages, generous health care plans, and new product guarantees if it does not feel it has to make good with its workers for closing plants.
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.