SOUTHFIELD, Mich. – General Motors and the United Auto Workers reached a tentative four-year agreement that is expected to provide raises across the board, averting a potential strike.
The union announced the deal in an emailed statement without giving details. Local union leaders at Detroit-based GM are set to vote on Wednesday whether to send the accord to rank- and-file members for ratification.
UAW President Dennis Williams sought richer agreements with GM and Ford after gaining a deal on Oct. 22 with Fiat Chrysler Automobiles. In that accord, the union won raises for all members at Fiat Chrysler and a path to bring wages of so-called Tier 2 employees equal to those of senior workers. That pact will cost Fiat Chrysler close to $2 billion over four years, people familiar with the matter have said.
“GM is in far stronger economic shape than Chrysler, and the union wanted to see more in what they got from them,” said Harley Shaiken, a labor professor at the University of California at Berkeley, before tonight’s agreement. “These contracts provide an entrance ramp to the middle class. That’s a contrast to the contracts we’ve seen in recent years that provided exit ramps.”
The UAW for the first time in a decade is reaching agreements that add substantially to the Detroit-area automakers’ costs. In the agreement at Fiat Chrysler, which has smaller earnings than GM and Ford, Tier 2 workers’ hourly rate will eventually climb above $29 from a previous maximum of about $19.
The union’s deal with GM averted a potential strike. The UAW last struck GM in 2007 for two days before reaching agreement on a four-year contract that included a lower wage for new hires — the Tier 2 workers — to help the automaker through an economic downturn. GM and Chrysler ultimately went through government-sponsored bankruptcies in 2009.
“There is a profound difference between now and 2007 because GM and the UAW have built a solid working relationship,” Shaiken said. “The experience of the bankruptcy was searing for both sides.”
GM shares slipped 0.3 percent to $35.83 at 10:17 a.m. New York time.
The Fiat Chrysler contract was approved by a 3-1 margin last week, after UAW members there rejected an earlier agreement and sent their leaders back to the bargaining table. The revised deal secured larger signing bonuses for senior workers and bigger raises for those in the second tier.