GM has tentative deal with UAW, though strike may continue
General Motors Co. and the United Auto Workers have reached a tentative agreement on a new contract, and the union will decide Thursday whether to continue a more than month-long strike while the deal is voted on by members.
The accord, announced by the UAW on Wednesday, may bring an end to the union’s first national walkout against the carmaker in a dozen years. The UAW’s national council will decide Thursday whether to recommend the agreement for a ratification vote, and if the strike will continue while members cast ballots.
“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” UAW Vice President Terry Dittes said in a statement. He said the union’s bargaining committee voted to recommend that the GM National Council — which is comprised of presidents and chairmen of locals around the country — vote in favor of putting the deal up for a ratification vote.
GM shares rose as much as 2.6% to $37.22, the highest intraday in two weeks. The UAW’s statement didn’t provide details on the deal reached with the company.
Ratification Challenge
Getting the new four-year agreement approved by the rank-and-file could be a challenge. GM outraged union workers last year by threatening four U.S. plants with possible closure, though it’s offered to keep at least one of those factories open.
UAW leaders also have credibility issues: President Gary Jones was implicated last month by federal prosecutors in an indictment of a former confidant who conspired to embezzle member dues and spend the money on stays at luxury villas, golf gear and cigars.
Issues that have divided the automaker and union since the strike took effect Sept. 16 included allocation of future product to plants GM said last year no longer have vehicles to build, the treatment of temporary workers and the rising cost of health-care coverage.
Once the UAW’s GM membership ratifies the contract, the union will turn its attention to either Ford Motor Co. or Fiat Chrysler Automobiles NV. The UAW typically tries to use the first agreement as a pattern for the others. The union extended its contracts with Ford and Fiat Chrysler on Sept. 13 to focus on GM.
— By David Welch (Bloomberg)
