Week 7: Tentative Deal Reached!

After a brief hiatus, I have returned from break to share some more news about General Motors. On October 16, 2019, Nora Naughton and Mike Colias, our old friends from the Wall Street Journal, reported that a tentative agreement had been reached between negotiators from the UAW and GM. The deal must be approved by a simple majority vote from the UAW members that work at GM, but until then, the strike will continue. Key parts of the deal include plans for GM to invest nearly $8 billion into its US factories, “which would create or preserve about 9,000 jobs,” (WSJ). The company will also invest around $1.3 billion in facilities in Lordstown, Ohio, where GM has an existing plant, “which the company hopes to sell to a startup electric-truck maker,” (WSJ). On the flip side, GM will, “move forward with plans to close or sell three now-idled U.S. factories,” (WSJ). The union also gets major wins, such as: no increase in workers contributions to their health-care payments, a path from temporary worker to full-time employee, and wage and bonus increases.

All of this sounds great, but still requires ratification by union members to end the now month-long strike. Naughton and Colias also wrote that the UAW leadership face a tough sell. This difficulty may be partly due to the fact that, “roughly 42% of GM’s factory workers have never seen an industry downturn and might be a harder sell on any deal that doesn’t fully meet all their demands,” (WSJ). Although General Motors made several important concessions in the deal, they will proceed with plant closure and have not made any, “commitment to relocate Mexico production to the U.S. – a change the UAW had pressed for during talks,” (WSJ).If the United Auto Workers reject the deal, it will hurt both sides even more. According to analysts cited by Naughton and Colias, “by the time final ballots are in on Oct. 25, GM’s losses could,” surpass, “$2.5 billion since the strike began … the average full-time worker will have missed take-home pay of about $6,000,” (WSJ). If the strike is prolonged, these numbers will only grow. Only time will tell, but a tentative deal is better than stalemated negotiations.

Sources:

https://www.wsj.com/articles/uaw-reaches-tentative-labor-deal-with-gm-11571240157

https://www.wsj.com/articles/uaw-reaches-tentative-labor-deal-with-gm-11571240157

One thought on “Week 7: Tentative Deal Reached!

  1. you got lucky in terms of being able to follow this topic from its beginning to its resolution; glad that it is just about over. I guess you are on a first-name basis with the WSJ reporters at this point…

    Like

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