GM was the last holdout of the Big Three, after Stellantis reached a tentative deal Saturday.
On Monday, General Motors and the United Auto Workers (UAW) union tentatively reached a deal to end the ongoing strike, according to reports citing sources familiar with the matter. After Stellantis COO Mark Stewart announced a deal Saturday evening, it appears the simultaneous strike against the Detroit Three is at an end after 46 days.
At the time Ford struck a tentative deal with the union last week, nearly 50,000 of the UAW’s 150,000-strong member base among the three automakers were on the picket line. Workers struck General Motors’ Spring Hill, Tennessee plants after negotiations reached an impasse this weekend, though the parties came to terms after less than 48 hours. While now have and will continue to return to work, UAW President Shawn Fain still needs workers to ratify all three contracts to truly end the weeks-long labor action.
Leaders of the Ford-UAW local unions and the automaker began the process of ratifying Ford’s contract on Sunday.
Details on GM’s deal with the union are not available, at time of writing, as company spokespeople declined to comment and neither side published a release, as of the morning of October 30.
Stellantis’ deal with the UAW
On the other hand, the UAW did publish a transcript of union leaders’ remarks after reaching a deal with Stellantis. In terms of wage increases, the headline figure mirrors the deal with Ford: a 25% general wage increase over the 4-1/2-year contract term. Fain and UAW Vice President Rich Boyer included more wins for workers in their remarks, including:
- Belvidere, Illinois manufacturing plant will reopen
- Workers will build a new mid-size truck (possibly a Ram Dakota or Rampage?) and will have two shifts
- Stellantis will add 5,000 jobs company-wide
- Trenton Engine and Toledo Machining plants will not shut down, as Stellantis originally planned
- 25% general wage increase over the contract term
- With COLA, top rates will increase by over 30%, to more than $40/hour
- Starting rates will rise 67%
- Workers will receive an 11% raise immediately upon ratification
- Lower-tier Mopar workers will get a 76% raise upon ratification
- Cost-of-living adjustments (COLA) reintroduced
- Wage tiers eliminated
- “Perma-temps” system ended
- No one will remain a temp at Stellantis for more than a 9-month period
- Better retirement benefits for current retirees, members with pensions and workers with 401(k)s
Stellantis shares rose substantially in early Monday morning trading, before falling again to represent a slight bump from where share prices ended last week. GM shares also rose by about 0.2% in Moday’s trading.
A win for the UAW’s “Stand Up Strategy”
Rather than its entire member base striking at the same time, Fain’s strategy targeted less important plants earlier on. However, it ratcheted up the economic pain for all Big Three automakers as it targeted huge revenue generators over the past two weeks. After the UAW struck Ford’s highly profitable Kentucky Truck Plant, it also knocked Stellantis’ Sterling Heights Assembly and GM’s Arlington and Spring Hill plants offline. In total, workers from nine North American assembly plants joined the picket lines before each made a tentative deal with the union.
Over the course of the strike, automakers argued that the UAW’s higher demands — including 40% wage increases over the 4-1/2-year period — would put them at significant disadvantage against non-unionized manufacturers like Tesla and Toyota.
Workers win, but EVs lose?
While we have yet to see whether workers will ratify the deals, it’s decently likely that will happen in the next few weeks, given the historic contract gains achieve through the union leadership’s strategy.
Apart from the immediate cost of the strike, however, the labor action may contribute to a different landscape than we otherwise might have seen, had the UAW quickly reached a less significant contract with the Big Three. Thanks to slower sales, cooling customer demand and high costs, lost productivity from the strike has compelled automakers to pull back spending and reinforce higher-margin products to soften the blow to shareholders.
Both GM and Ford, for their part, said they would slow their electric model rollouts, in light of the lower demand.
