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October 18, 2019 10:30 AM, EDT

GM Workers Stay on Strike as Members Vote on New Contract

GM workers continue to strike. General Motors employees picket outside the General Motors Fabrication Division in Parma, Ohio. (Associated Press/Tony Dejak)

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The United Auto Workers will continue striking against General Motors Co. until a tentative deal is ratified by members, extending its walkout for at least another week.

Voting on the proposed contract will begin Oct. 19 and ballots will be due by Oct. 25, Brian Rothenberg, the UAW’s spokesman, said during a press conference Oct. 17 in Detroit. The strike began Sept. 16 and has cost GM an estimated $2 billion.

GM shares fell 0.5% to $36.02 in late trading. The stock is down about 7% since the strike began.

The walkout has already had a profound effect on the U.S. economy, contributing to the steepest drop in U.S. factory production in five months. By deciding to stay on strike until ratification, the union may be acknowledging the challenge it will have convincing the rank-and-file it’s squeezed all the concessions it possibly can out of the company.

Keeping workers on the picket line “is an indication they don’t feel like it’s a slam dunk,” said Arthur Wheaton, director of the Worker Institute at Cornell University. “They better get it out to a vote because it’s a nightmare if it gets voted down.”

After reaching a tentative agreement Oct. 16, the UAW released highlights of the accord Oct. 17. While it notably doesn’t throw a lifeline to GM’s Lordstown assembly plant in Ohio, the automaker is offering to pay $11,000 ratification bonuses to senior workers. It’s also dangling $60,000 early retirement buyouts for up to 2,060 employees and providing lump-sum payouts and annual raises that will take hourly production wages up to $32.32 an hour by 2023.

Every day the strike continues costs GM about $100 million of profit, Bank of America Merrill Lynch analyst John Murphy wrote in a report this week.

“We encourage the UAW to move as quickly as possible through the ratification process, so we can resume operations and get back to producing vehicles for our customers,” GM said in a statement.

The union’s local presidents and chairmen — roughly 200 officials — met Oct. 17 after being called to Detroit earlier this week when the two sides began to make major progress hammering out a new contract.

‘Generous’ Deal

The proposed agreement shortens the length of time temporary employees need to work before converting to permanent status, a major sticking point in the negotiations. Workers will get 3% wage increases in the second and fourth years of the contract, and 4% lump sums in the others.

“It’s certainly a generous economic deal,” said Art Schwartz, a former GM labor negotiator who is now a consultant in Ann Arbor, Mich. The one issue that could derail the deal is the automaker’s decision to follow through with closing three U.S. factories.

“The UAW kind of got everything the members wanted, except those three plants,” Schwartz said.

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