UAW Finalizes Contract Deals

The United Auto Workers and Big 3 have been back and forth for several months, but an agreement has finally been made with all three automakers.

UAW’s contract expired September 14. Ford and Fiat-Chrysler’s contracts were temporarily extended. GM wasn’t as lucky, and the UAW strike officially began on September 15. It included 50,000 GM workers across the country. It’s been more than ten years since we had seen a strike like this.

For the entire union, it was time to negotiate higher pay, but the issues went deeper than that. After the recession, the union had agreed to a two-tiered pay system where new workers were paid less than tenured workers. After 12 years of the pay gap, enough was enough. It was time to level the playing field, but the Big 3 weren’t quite ready to concede. A 40-day strike changed their minds.

The new GM contract, approved October 25, will close the pay gap over the next four years. It confirmed signing bonuses, performance bonuses, a 3% annual raise, 4% lump sum payments and low-premium healthcare costs. The deal also allows time off and a roadmap to full-time employment for temporary workers. GM will still be closing 4 of its plants, and the union agreed to these terms.

Ford agreed to a similar contract November 15, but with lower signing bonuses, $9,000 compared to GM’s $11,000, and with a clause that temporary workers can only account for 8% of its workforce. Chrysler-Fiat struck a similar deal last week, so all is well in Detroit - for now.

There are still many unknowns about the future of the auto industry. With technology advancing, there could be less need for general technicians, which would call for lay-offs. New technology may require specific talent, transitioning GM’s need from general labor to skilled engineers who require higher pay.

This technological boom has affected many companies positively and negatively, but the unions are concerned about the future of their jobs.  December 4, GM announced it would cut 800 jobs at its Detroit-Hamtramck plant as it shifts to EV. These employees will likely be offered transfers, but it makes the point that the industry is changing.

The FCA-Peugeot merger raises more questions. They agreed to a 50-50 merger on Tuesday. Some are leery of what this means for plant employees, but this merger is hopefully beneficial for the UAW. It will bring back some trust and opportunities for expansion. Productivity and job security are some of the biggest goals for the merger. We are all rooting for its success.