UAW, GM Have Until Sunday To Avoid Shutdown

The UAW has set a deadline for its negotiations with GM — 11:50 p.m. ET on Sunday night. Should the negotiations go over that time limit, the workers in GM plants could strike. Coming off of a big win with Fiat, union negotiators are likely seeking an even more lucrative deal, especially after GM posted strong profits. Will they get it?

The odds are in favor of avoiding a strike, according to the Detroit Free Press.

Art Schwartz, former GM negotiator and labor consultant, agrees, explaining, “I don’t think there will be a strike; I don’t think anyone wants one.”

He believes that there is no issue on the table that would be worth the cost of a worker walkout, especially in a time when the auto industry is booming, and the demand for SUVs and trucks is soaring.

GM CEO Mary Barra (left) stands with UAW leader Dennis Williams at the launch of worker negotiations in July. [Image Credit: Bill Pugliano] GM CEO Mary Barra (left) stands with UAW leader Dennis Williams at the launch of worker negotiations in July. [Image Credit: Bill Pugliano]That environment might allow the UAW to gain choice concessions from the auto giant, using the four-year agreement with Fiat Chrysler Automobiles (FCA) as a model.

In that deal, the base pay for entry level workers was raised from $15.78 to $19.28 per hour and grants a path from base to $29 per hour in eight years — eventually phasing out the “two-tier” pay system for newer employees.

Likewise, junior employees received a $3,000 signing bonus and more senior workers got $4,000. The contract also dealt with a plethora of issues, including work schedules, profit-sharing, and health care.

The total pricetag on the UAW-FCA contract is about $2 billion for the automaker.

Fiat released thorough details on its plans to invest $5.3 billion in its U.S. plants as well.

How closely the GM deal with follow in FCA’s footsteps is difficult to judge, but UAW President Dennis Williams announced that they are seeking richer deals with Ford and GM. With good reason too; according to Bloomberg, General Motors recently posted its most profitable quarter ever.

Still, threatening a strike without a late-night deal is not uncommon. In the FCA negotiations, the UAW set a deadline for 11:59 p.m., October 7; negotiators came up with a deal at 11:41 p.m. that day.

That last-minute deal came after union workers rejected a previous contract drawn up by the company and the UAW. GM hopes to avoid a similar issue by building goodwill with its workers.

There are some final sticking points remaining according to Kristin Dziczek, director of the Center for Automotive Research.

“It sounds like maybe there are some sticking points that they need to get over. The UAW has been negotiating the entire time that the contract with Fiat Chrysler was being ratified so there may just be a few remaining items they need to agree on.”

One area that could be holding up an agreement is profit sharing. Fiat changed its formula in its new deal, but GM and Ford may want to keep their old model, which is easier to calculate.

Another issue is health care. At Fiat, major health care contentions were postponed, but GM has 400,000 retirees still receiving benefits (about 300,000 more than FCA), making the subject more pressing.

GM World Headquarters in Detroit GM World Headquarters in Detroit. [Image Credit: Bill Pugliano]In the unlikely event of a strike, the UAW will likely have workers walk out of a plant that makes certain key parts, like engine or transmission parts, according to Bloomberg Intelligence. That way production grinds to a halt company-wide, while the UAW gets to minimize the amount of workers receiving payments from the union’s strike fund.

After the GM negotiations are complete, the UAW will move on to Ford.

[Image Credit: Bill Pugliano/Getty Images]