General Motors and the United Automobile Workers union reached a tentative agreement on a new labor contract on Monday, setting the stage for an end to the union’s six-week strike against the Big Three U.S. automakers, according to two people familiar with the matter. ,
The agreement comes days after the union announced tentative agreements on new contracts with Ford Motor and Stellantis. The three deals include many of the same or similar terms, including a 25 percent general wage increase for UAW members as well as the possibility of wage adjustments to the cost of living as inflation increases.
The tentative agreement with GM, the largest U.S. car company by sales, requires approval by the union council that oversees negotiations with the company, and then ratification by a majority of its 46,000 UAW workers.
The union’s contracts with the three automakers expired on September 15. Since then, the union has called on more than 14,000 GM workers to walk off the job at factories and 18 spare-parts warehouses in Missouri, Michigan, Tennessee and Texas. Country. The most recent escalation in the strike came Saturday, when the union reached an agreement with Stellantis, the parent company of Chrysler, Jeep and Ram. That day, the UAW asked workers to go on strike at GM’s plant in Spring Hill, Tennessee, which makes several sport utility vehicle models.
The strike has halted production of some of GM’s most profitable vehicles, including the Cadillac Escalade SUV, the Chevrolet Colorado pickup truck and the Chevrolet Traverse SUV.
GM said last week that the strike reduced its earnings before interest and taxes by about $800 million, with some of the impact occurring in the third quarter and most of the impact in the fourth quarter.
For decades, the union has negotiated similar contracts with all three automakers, known as pattern bargaining. Like the contracts with Ford and Stellantis, the temporary GM deal would raise top UAW wages from $32 an hour to more than $40 over four and a half years. This would allow employees to earn approximately $84,000 per year working 40 hours per week.
GM, Ford and Stellantis began negotiations with the UAW in July. The companies have sought to limit increases in labor costs because they already have higher labor costs than automakers like Tesla, Toyota and Honda that operate nonunion plants in the United States.
The three big US automakers are also trying to control costs, investing tens of billions of dollars to develop new electric vehicles, build battery plants and retool factories.
“We need to make sure we have a contract that will allow us to compete and win in a challenging market for EVs,” Mary T. Barra, GM’s chief executive, said on an earnings call.