U.S. union, GM reach tentative agreement on labor contract

Mon Oct 26, 2015 11:19am EDT
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By Bernie Woodall

DETROIT (Reuters) - Negotiators for the United Auto Workers and General Motors Co (GM.N: Quote) reached a tentative agreement on undisclosed terms for a new four-year labor contract, averting a threatened strike, the union said late on Sunday night.

The proposed deal will now go to a council of several hundred UAW leaders from GM's U.S. plants meeting on Wednesday, who are expected to approve it. The contract then goes to a ratification vote of the UAW's 52,700 workers at GM. Last week, the union's new contract with Fiat Chrysler Automobiles NV (FCAU.N: Quote) (FCHA.MI: Quote) was overwhelmingly ratified by worker vote.

"We believe that this agreement will present stable long-term significant wage gains and job security commitments to UAW members now and in the future," said UAW President Dennis Williams. "We look forward to presenting the details of these gains to local union leaders and the membership."

GM confirmed in a separate statement that it had reached a tentative accord with UAW negotiators. "The new UAW-GM national agreement is good for employees and the business," Cathy Clegg, head of North American GM manufacturing and labor, said in the statement.

Clegg also said the contract will give GM the flexibility "for the company to respond to the needs of the marketplace."

One of GM's key goals in the talks was to make sure that the agreement would not saddle it with high fixed costs that could overburden the company if the cyclical automotive industry takes a downturn.

The industry sits at the top of that business cycle now, as U.S. auto sales are seen hitting 17.3 million vehicles this year. That's well up from the 10.4 million vehicles sold in 2009 in the depths of recession when GM went through a government-sponsored bankruptcy and bailout.

While details of the GM-UAW pact were not released, the Fiat Chrysler contract set a pattern that was used for GM and is expected to also set the broad outlines of a deal with Ford. The latter is expected to come to the table with the UAW after the worker ratification vote at GM.   Continued...

General Motors Co. headquarters is seen in Detroit, Michigan, September 17, 2015.   REUTERS/Rebecca Cook