The United Auto Workers faces a surprisingly difficult ratification fight over its tentative labor pact with General Motors despite making significant financial gains for new hires and temporary workers.
Union members displaced by GM’s decision to close the big assembly plant in Lordstown, Ohio, are vowing to oppose the tentative contract, which does nothing to break the 2015 contract and close the plant, which built the compact Chevrolet Cruze.
The frustration about the Lordstown issue contributed to the UAW’s decision to remain on strike until the contract is officially ratified. More than a dozen displaced Lordstown workers stood outside the room where the UAW’s GM National Council met in Detroit to give voice to their complaints about the tentative agreement’s failure to address the issue.
The 48,000 UAW members at GM went on strike Sept. 16, and the walkout is now the longest national strike the company since 1970.
The decision to leave the pickets in place for another week will add to the cost of walkout to GM, which has now lost more than $2 billion before earnings interest and taxes, according to Bank of America’s John Murphy. Murphy’s estimate was based on production lost by the beginning of the week and does not include production lost this week or next as the strike continue while union members vote on the tentative deal.
But Jeremy Ladd, a union member from Lordstown, urged a no vote on the proposed agreement because the job security provisions don’t have any real teeth.
“We were the plant that saved GM. We built a world class small car that could compete with Toyota/Honda in a time when gas was approaching $5 a gallon,” Ladd said. “We were three shifts/max overtime (sound familiar?). GM signed a commitment to build the Cruze until 2022-23, title 13 of the (2015) National Agreement to not close/Idle any plants during the duration, and also had an agreement with the state of Ohio (which) was committed to infrastructure upgrades and tax abatements.”
“The only ‘legal’ way to shutter a facility was due to market demand or act of god. (GM) stated the demand for the Cruze was the reason for the idling of Lordstown, even though it sold over 150,000 units in 2018 without marketing or incentives, outselling the Mexican made Trax by around 90,000 units (gee, wonder why THEY aren’t shut down because of lack of consumer demand?).
“So do you believe you’re still safe? Maybe because you build a truck or SUV?” Ladd said.
Besides Lordstown, GM also now has the right to close permanently vacant plants in Baltimore, Maryland, and Warren, Michigan. Like Lordstown, GM shuttered plants earlier this year.
The tentative agreement also states that GM’s Detroit-Hamtramck assembly will remain open for all-electric pickup production, which is slated to begin before the tentative agreement would expire in September 2014.
The agreement, however, is does include a bundle of cash and while the conventional wisdom for the past four decades is that strikes never pay, this one will for GM’s new hires and temporary workers.
The agreement would also pay full-time including the new hires a ratification bonus of $11,000. In addition, the new or in progression workers would move up quickly to top wage of $32.32, As far as wages, GM workers are set for 3% wage increases in the second and fourth years of the contract and 4% lump sum bonuses in the first and third years for eligible permanent manufacturing employees.
UAW members also keep their current health insurance benefits. In addition, temporary GM workers with three years of credited service are eligible to move up to full-time employment status in January 2020, reaching the top wage of $32.32 by end of the agreement, more than double the $15.78 they currently make.
The UAW also disclosed that the scandal ridden Center for Human Resources underutilized headquarters building on the Detroit River will be sold and the money put back into the training programs, which will continue. The joint program is also being overhauled in response to the scandal.