Dive Brief:
- General Motors and the UAW have reached a tentative labor agreement that would end the strike, Bloomberg reported first on Monday. Stellantis and the UAW reached their own deal on Saturday.
- The deal comes after the UAW on Saturday launched a surprise strike at GM's Spring Hill Manufacturing plant in Tennessee, directing another 4,000 workers to walk off the job. The Spring Hill plant builds the Cadillac XT5, XT6, Lyriq electric SUV and GMC Acadia. It also assembles propulsion systems for GM’s highly profitable large trucks.
- GM is the last of the Big Three to reach a tentative deal with the UAW.
Dive Insight:
Since the strike began Sept. 15, the UAW has targeted three of GM’s most profitable assembly plants, wreaking havoc on the automaker’s operations and hurting its finances.
According to a Cox Automotive report in October, GM was the Detroit Three automaker most vulnerable to the UAW strike due to low vehicle inventories. The report said GM had a 60-day supply of new vehicles, while Ford and Stellantis had 90- and 111-day supplies, respectively.
During GM’s earnings call on Oct. 24, CFO Paul Jacobson said the company had earned $3.6 billion in profits and that the UAW strike had cost it $800 million since the strike began.
Hours later, 5,000 UAW-represented autoworkers launched a surprise strike at the automaker's most profitable plant in Arlington, Texas, shutting down production of full-size SUVs like the Chevrolet Tahoe and Cadillac Escalade, pressuring GM to reach an agreement and end the strike.
Once Ford and the UAW reached a tentative agreement Thursday, GM and the UAW began negotiating constantly, sometimes into the wee hours of the morning, to work through the final details of a deal, according to news reports. But after Stellantis struck a deal with the union Saturday, and the UAW launched yet another strike against GM’s largest facility, the sides worked out a deal.
GM reportedly agreed to terms that are similar to those the UAW negotiated with Ford and Stellantis, including a 25% base wage over four-and-a-half years, cost-of-living adjustments and the ability to strike against plant closures.
Deutsche Bank estimated last week that the total costs of a new labor agreement with the UAW would cost GM $7.2 billion if the terms were similar to the Ford agreement. The investment bank also said the UAW strike against GM would have cost the automaker an estimated $400 million per week after the strike at the Spring Hill Manufacturing plant.
GM hasn’t responded to a request for comment as of press time.
