UAW reaches deal with GM, ending strike against Detroit automakers

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Oct 30 (Reuters) – General Motors (GM.N) and the United Auto Workers (UAW) union have reached a tentative agreement, two people familiar with the matter told Reuters on Monday, winning record pay hikes to end six weeks of a coordinated strike against the Detroit Three automakers.

The accord follows deals reached in the last few days by the union with Ford Motor (F.N) and Chrysler-owner Stellantis (STLAM.MI), in what amounts to significant victories for auto workers after years of stagnant wages and painful concessions made by the union following the 2008 financial crisis.

Details of the GM deal were not announced, but sources said the UAW won the same package of wage increases it agreed at the other two automakers, which raises top pay for veteran workers by 33%.

Nearly 50,000 workers out of nearly 150,000 union members at the Detroit Three eventually joined a series of walkouts that began on Sept. 15. The UAW’s strategy of escalating, targeted strikes cost the Detroit Three and suppliers billions of dollars over more than 40 days.

UAW leaders argued their contract fight was part of a much larger movement to reverse decades of economic setbacks for working-class Americans and analysts said the union’s success in Detroit would advance that effort.

“This is more than an auto industry story; it is a signal to the entire country that unionized workers can demand and get big wage increases,” said Patrick Anderson of the Anderson Economic Group.

The GM workers will return to work after an official announcement of the deal, two sources said. A GM spokesperson declined to comment.

Talks at GM stalled Saturday because of issues such as pension benefits how fast temporary workers would get permanent work and the treatment of battery plant workers, sources have said.

The three tentative deals are a win for the precedent-breaking strategy orchestrated by UAW President Shawn Fain that involved bargaining with all three automakers at the same time and using the threat of strikes at key factories to accelerate a bidding war among the companies to avoid a new walkout.

Fain then kept most UAW members working to hoard strike funds. He expanded the strike slowly when he decided that progress in talks had stalled.

Fain must now get the contracts ratified by rank-and-file UAW members. That process began on Sunday as Fain met with leaders of Ford-UAW local unions.

U.S. President Joe Biden on Monday lauded the tentative agreement. “I think it’s great,” Biden, who has touted himself as pro-union and backed the UAW, said when asked about the reported deal.

Aides to Biden had worried that a prolonged auto strike and drop in production would damage both the U.S. economy and the Democratic president’s chances of re-election in 2024.

The UAW, in a series of social media posts prior to the GM announcement, said it is committed to expanding to other carmakers, saying it wants negotiations in 2028 to be between the union and the “Big Five or Big Six.”

“The strike result is as likely to lead to non-union car companies doing everything they can to keep the UAW out, including voluntarily increasing benefits to their workers, as it is to lead to the UAW unionizing their plants,” University of Michigan professor Erik Gordon said.

The strike against the Detroit Three began at relatively unimportant plants, spreading to the biggest money-makers that produce pickup trucks and SUVs, ratcheting up the pain.

Momentum toward deals accelerated over the past two weeks after UAW workers walked out at three of the most profitable factories in the world: GM’s Arlington, Texas, assembly plant, which makes the Chevy Tahoe and Suburban; Ford’s Kentucky Truck heavy-duty pickup factory and Stellantis’ Ram pickup plant in Sterling Heights, Michigan.

The UAW eventually struck against nine plants, most recently GM’s Spring Hill, Tenn. manufacturing complex with makes engines for a total of nine North American assembly plants, seven of which were not already on strike.

“The Street is glad to have this UAW nightmare in the rear view mirror with a less onerous deal than originally feared for the Detroit Big 3,” Wedbush analyst Daniel Ives said.