UAW in Talks With Ford as GM Rushes to Resume Production

The GM agreement, with its higher wage structure, generous health-care benefits, quicker route to top wages for new workers and limits on temporary workers, will place new burdens on Ford and Fiat Chrysler, which will be required to match its key terms.

Joseph Szczesny

October 28, 2019

4 Min Read
web-promo-gm-uaw-strike 091619 (getty)
UAW members picket outside General Motors’ Flint, MI, assembly complex Sept. 16.

The UAW is moving into the final phase of contract talks with Ford following the ratification of its new labor agreement with General Motors, which is scrambling to make up for lost production in the wake of a 6-week strike. 

The strike by GM’s 48,000 hourly workers, the longest in nearly a half-century, cost GM roughly $3 billion, according to Bank of America analysts. The GM agreement, with its higher wage structure, generous health-care benefits, quicker route to top wages for new workers and limits on temporary workers, will place new burdens on Ford and Fiat Chrysler, which will be required to match its key terms. 

The ratified 4-year contract includes a signing bonus of $11,000 per member, performance bonuses, two 3% annual raises and two 4% lump-sum payments and holding the line on health-care costs. 

“We can confirm the UAW notified Ford it plans to negotiate with us next. As America’s No. 1 producer of vehicles and largest employer of UAW-represented autoworkers, we look forward to reaching a fair agreement that helps Ford enhance its competitiveness and preserve and protect good-paying manufacturing jobs,” Ford says in a statement. 

Much of the new contract already is in place at Ford. 

GM is moving quickly to restart its critical pickup-truck plants in Flint, MI (below, left), and Fort Wayne, IN, spokesman David Barnas says, adding other GM workers will return to work as soon as practicable. 

Harley Shaiken, a labor expert with the University of California, says the fight over temporary workers, which led to an agreement making them full-time employees after three years of service and ensures them vacation time and a $4,500 ratification bonus, could make it easier for the UAW to sign up supporters in the non-union transplant factories in the South where temporary workers are common. 

The UAW’s willingness to advocate for the temporary workers during the GM talks should bolster the union’s organizing efforts in the South, Shaiken says. 

Union organizing drives at Nissan in 2017 and Volkswagen earlier this year have been undermined by the federal corruption charges that have haunted the UAW for the past two years. Last week, a seventh former UAW official identified in the probe, Jeff Pietzyrk, 74, of Grand Island, NY, pleaded guilty to charges of money laundering and wire fraud. 

But Shaiken suggests the union’s fight on behalf of GM temporary workers changes the discussion. 

The ratification was closer than might have been expected after union members had spent 40 days on the picket line. The UAW’s final tally showed 57% of the striking GM workers approved the new contract while 43% did not. The turnout, roughly 83% of the eligible voters, was higher than expected, UAW spokesman Brian Rothenberg says. 

The new contract was more popular among skilled-trades workers, who got a $1,000 payment to cover the cost of new tools as part of the agreement in addition to the $11,000 ratification bonus. Some 66% of GM’s skilled-trades workers voted for the contract, providing a crucial measure of support for the agreement. 

“General Motors members have spoken. We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation. Their sacrifice and courageous stand addressed the two-tier wage structure and permanent temporary worker classification that has plagued working-class Americans,” says UAW vice president Terry Dittes, director of the UAW-GM Dept. 

GM Chairman Mary Barra says the new contract will benefit both GM and its employees. 

“We delivered a contract that 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,” Barra says in a statement. 

“The new, 4-year agreement rewards the hard work of GM’s hourly employees, helping support families and communities across the U.S.” 

GM Flint Assembly.jpg

GM Flint Assembly_0

The new contract does not erase GM’s cost gap with its domestic competitors building vehicles in the Midwest or international rivals that build vehicles in the southern U.S. as the company paid dearly for the right to move ahead with closing three plants in the U.S., including the massive assembly complex in Lordstown, OH. 

The GM agreement will put more pressure on Ford and, further down the road, FCA. Ford beat analyst estimates when it reported third-quarter earnings last week, but it revised its 2019 earnings guidance downward and its margins remain under pressure. 

The pressure already has led the Moody’s credit-rating service to downgrade Ford’s credit rating and put pressure on the value of its stock. An expensive settlement with the UAW will only add to the burdens weighing on Ford, according to Bank of America. 

“The UAW made progress for temps and in-transition workers and made improvements in the ratification bonus,” Arthur Wheaton, a labor expert from Cornell University, says in an email to Wards. “They avoided concessions on health care and live to fight another day. 

“I think the UAW will be around for a while. New leadership is very likely, but the union is still necessary to fight for workers’ rights. Hopefully it will be smoother at Ford and no one knows about Fiat Chrysler.” 

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