The United Auto Workers (UAW) union and General Motors (GM) have reportedly reached a tentative pay deal, marking a significant step towards the resolution of the six-week-long strike that has plagued the US car industry. This deal follows earlier agreements between the UAW and Ford and Stellantis, the other two major automakers impacted by the strikes. With nearly 50,000 workers and dozens of sites involved, this strike was historic as it targeted all three companies simultaneously.
The news of the potential resolution has been well-received by President Joe Biden, who had shown support for the striking workers by visiting a picket line at the beginning of the strike—a first for a sitting president. However, both GM and the UAW have refrained from commenting on reports of the deal, and the specific terms of the agreement remain undisclosed. Nevertheless, Ford and Stellantis have already committed to pay raises of approximately 25% over the four-year term of the new contracts, along with other changes that address workers’ concerns.
One significant aspect of these agreements is the improved prospects for temporary workers transitioning to full-time positions with full benefits—a longstanding demand of the union. For the lowest-paid workers, these changes could mean substantial pay increases exceeding 150% by the end of the contract period, according to the UAW. However, it is worth noting that these agreements are still subject to worker approval.
The potential deal with GM, along with the earlier agreements at Ford and Stellantis, is expected to significantly increase costs for these automotive companies. Credit rating agency Moody’s estimates that each carmaker may face more than $1 billion in additional expenses due to this deal. Concerns have been raised that this added financial burden could put the companies at a disadvantage against non-unionized rivals.
Despite these concerns, labor experts, like Art Wheaton from Cornell University’s School of Industrial and Labor Relations, believe that these agreements will raise wage expectations across the entire US car industry. Wheaton regards the UAW’s negotiation success as a major win for all workers and commends UAW President Shawn Fain’s tactics during the strike, which he describes as “masterful.” Fain has taken a tough stance against the “billionaire class,” positioning the car workers’ battle as part of a broader fight for workers’ rights.
Throughout the strike, the UAW strategically escalated the situation by selectively adding new plants to the walkout, leaving the companies on the defensive. Another GM facility was hit with a walkout just recently. GM has already reported that the strike has cost the company $800 million to date, highlighting the significant financial impact of the labor fight.
This strike has drawn considerable attention, occurring during a period of low unemployment and high inflation, which has emboldened workers nationwide to demand better pay and benefits. It follows other high-profile labor disputes at companies such as UPS, Amazon, and Starbucks.
The resolution of the GM strike is a positive development for both the workers and the company. It paves the way for the resumption of normal operations, bringing much-needed relief to the US car industry. As the agreements reached by the UAW and the carmakers are put to worker approval, the outcome will shape the labor landscape within the industry, setting a precedent for higher wages and improved conditions for workers. However, the potential impact on the companies’ financial performance and their competitiveness against non-unionized rivals remains a point of caution.
