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General Motors has reached a tentative deal with the United Auto Workers union to end a six-week strike that also hit Ford and Stellantis, in what was the first co-ordinated walkout by workers at the three largest US carmakers.
GM has agreed to a 25 per cent hourly pay rise over the course of its four-year deal, which has not yet been confirmed by the union or the carmaker, according to people familiar with the details. The agreement also brings back cost-of-living allowances for workers, the people added.
The terms are similar to a tentative deal struck with Ford and the union last week. Stellantis reached its own deal over the weekend, and GM was the last of the three to reach an agreement.
GM declined to comment. The UAW did not immediately respond to a request for comment.
Starting on September 15, UAW members employed at the Detroit’s Big Three began to walk off the job as their employment contracts expired without a new agreement in place.
Workers walked out at selected plants and parts warehouses with no advance warning to the automakers, a strategy that disrupted carmakers’ operations while preserving the fund the union uses to pay striking workers. The strike eventually expanded to nearly 50,000 of the UAW’s 146,000 members.
Union leaders announced new plants to target when they decided that negotiations were stalling, eventually expanding the strike to the most profitable assembly plants that manufacture pick-up trucks and SUVs.
The tactics, masterminded by new UAW president Shawn Fain, served to pit the three carmakers directly against each other as bargaining wore on.
The autoworkers sought to restart annual cost of living wage increases that ended during the global financial crisis and improve job security as the industry transitions to electric cars that require significantly less labour to manufacture.
The tentative agreement is the latest in a series of new contracts offering substantial pay raises to unionised workers in a variety of occupations, from nurses and UPS drivers to Hollywood screenwriters.
Hours after announcing a deal with Stellantis on Saturday, the UAW escalated action against GM over the weekend, hitting its Spring Hill, Tennessee, plant. GM told analysts last Tuesday that the strike was costing the company $200mn a week, totalling $800mn in earnings before interest and taxes.
Ford said on Thursday that the strike had cost it $1.3bn in operating earnings, while Stellantis has not said how much the strike has cost the company.
The prospective deal will raise perennial questions about the competitiveness of the Detroit Three’s plants compared with non-unionised factories run by Honda, Toyota and Tesla in the US.
The UAW’s deals with all three carmakers still need to be ratified in a vote by union members before going into effect, but 18,000 GM workers are expected to return to work after the agreement is formally announced. Union members who participated in the strike at Ford and Stellantis are already returning to work.
President Joe Biden flashed a thumbs-up when reporters asked about the deal as he boarded Air Force One on Monday, saying: “I think it’s great.”
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