Workers ratify UAW-GM deal, ending 40 day strike

After more than a month on strike, UAW workers are expected to head back to work this weekend after voting to approve a deal between the union and General Motors on Friday, ending the longest automotive strike in 50 years.

Workers voted to ratify the new four-year labor deal that includes significant wage gains and bonuses plus makes it easier for temporary employees to attain full-time status.

The new four-year contract includes a mix of wage increases and annual lump-sum payments, as well as an $11,000 signing bonus. But it also allows GM to close three U.S. factories that made slow-selling cars and transmissions.

The deal that was reached last week offers no changes to healthcare but does give more stability for temporary workers hoping to become full time. It was announced last week but 49,000 workers had to vote for the deal. The deadline for that was 4 p.m. Friday.

Throughout the week, plants across the country voted on it and, by mid-week, it was expected that the deal would be accepted by workers.

“General Motors members have spoken,” said Terry Dittes, UAW Vice President and Director of the UAW-GM Department. “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 wages structure and permanent temporary worker classification that has plagued working-class Americans.”

Workers will be headed back to work when directed to do so by General Motors, according to the statement. That is expected to happen as soon as this weekend.

“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,” said Mary Barra, GM Chairman and CEO. “GM is proud to provide good-paying jobs to tens of thousands of employees in America and to grow our substantial investment in the U.S. As one team, we can move forward and stay focused on our priorities of safety and building high-quality cars, trucks and crossovers for our customers.”

Michigan Governor Gretchen Whitmer sent a statement saying "This is good news for our working families and our economy,” said Governor Whitmer.

“Michiganders are some of the hardest working people in this country, and they deserve to be treated with respect. I was proud to stand with the UAW as they negotiated for more American jobs, better wages, and good benefits, and my administration is committed to continuing our work to close the skills gap and protect hardworking Michigan families.”

— Michigan Gov. Gretchen Whitmer

Early results appeared the contract would be approved. Friday morning it was announced striking workers at the General Motors factory in Arlington, Texas - which has the most employees - approved the contract with a 78% vote from production workers and a 60% vote from skilled workers. Arlington is the United Auto Workers union's largest local, representing more than 5,000 people.

Earlier in the week, the second-largest local, United Auto Workers Local 598 at a pickup truck plant in Flint, also voted in favor.

WHAT HAPPENS NEXT

Some production workers could return to work as early as Friday night or Saturday morning, ending a walkout that was big enough to help push down September U.S.

Trades workers such as machinists and electricians likely will enter the plants quickly, restarting boilers and preparing paint shops, robots and other equipment to restart production.

The UAW will now negotiate with Ford for the next round of bargaining.

“Now that the General Motors strike has ended and the agreement has been ratified, we will proceed to Ford working with UAW Vice President Rory Gamble, Director of the UAW Ford Department and their staff," said UAW President Gary Jones

LOST PRODUCT

Although GM dealers had stocked up on vehicles before the strike and many still have decent supplies, analysts say GM won't be able to make up for the lost production. Had the strike been shorter, GM could have increased assembly line speeds and worked the plants on overtime to catch up and refill its stock. But many of the plants that make popular SUVs and pickup trucks already were working around the clock to keep up with demand before the strike began.

Also, companies that supply parts to the factories and halted production during the strike will need time to restart, although GM has some parts in stock.

Jeff Schuster, senior vice president of the consulting firm LMC Automotive, estimates that GM has lost production of 300,000 vehicles, and he said maybe only a quarter of it can be made up.

"You can't add days to the week and you can't add hours to the day," he said.

Some production losses will help thin inventory, especially of cars, Schuster said. But in late October and early November, GM will likely run short of colors and models of trucks and SUVs that are in high demand until stocks are replenished, he said. Although truck and SUV buyers generally are loyal to a brand, customers in a hurry for a new vehicle could go elsewhere, Schuster said.

"There are definitely going to be some limitations on choice, and that is a risk," Schuster said. "Consumers can opt to wait, or they can go down the street to their competitor."

FORD, FCA NEXT

Now the union will move on to bargain with either Ford or Fiat Chrysler, using the GM deal as a template. A decision on which company is next is expected Saturday. It's not clear yet if there will be another strike, but neither Ford nor FCA will be happy about being stuck with the GM terms.

GM traded the ability to close the three factories in Lordstown, Ohio; Warren, Michigan; and near Baltimore for higher labor costs, David Kudla, chief investment strategist for Mainstay Capital Management of Grand Blanc, Michigan, wrote in a note to investors. The contract maintains worker health benefits with low premiums, something that both Ford and FCA wanted to change when negotiations began.

"Ford and FCA didn't have three factories that they wanted to close, but will have to work around this new framework for higher wages and unchanged health care that the UAW and GM have set," wrote Kudla, whose firm manages investments for many auto industry workers.

Workers at factories that GM will close have been transferred to plants across the nation, and they campaigned against the deal, which was reached Oct. 16. Workers in Lordstown, for instance, voted 412-61 against it, with 88% of production workers voting "no."

In the end, economic gains and a $7.7 billion GM investment pledge for U.S. factories were too much to turn down.

Fox 2 reported on this story from Southfield, Mich. 

The Associated Press contributed to this report