Auto Workers Set Sunday Strike Deadline in GM Contract Talks

  • UAW said it will terminate contract at 11:59 p.m. Sunday
  • Auto union's move follows agreement with Fiat Chrysler

The United Auto Workers said it informed General Motors Co. that it will terminate its contract with the automaker at 11:59 p.m. on Sunday, effectively setting a strike deadline for talks to reach a four-year agreement.

The Detroit-based company confirmed in a statement that it had received the deadline from the UAW, saying it was “working with them to address the issues and remain committed to obtaining an agreement that is good for employees and the business.”

UAW spokesman Brian Rothenberg didn’t immediately return a telephone call and e-mail on Saturday seeking comment on the GM negotiations.

The move follows the union’s agreement with Fiat Chrysler Automobiles NV. That accord will likely provide a starting point for the GM negotiations.

UAW President Dennis Williams has sought richer agreements with GM and Ford Motor Co. after first gaining the Fiat Chrysler deal, approved by a 3-to-1 margin announced Oct. 22. Union members at FCA got raises across the board, including increases for so-called Tier 2 employees that would eventually boost their maximum wage from about $19 an hour to the more than $29 rate of more senior members. The Fiat Chrysler pact will cost the company close to $2 billion over four years, people familiar with the matter have said.

Adding Costs

The UAW is reaching agreements that add substantially to the automakers’ costs for the first time in a decade. After settling with Fiat Chrysler, which has smaller earnings than GM and Ford, the union is aiming for more lucrative contracts with those larger companies.

GM goes into the talks after posting its most profitable quarter ever. The UAW may win greater profit-sharing and bonuses and more jobs. 

GM and Ford may have to provide more for senior workers, who account for about 80 percent of union members at GM and and 72 percent at Ford. The UAW will need to make them happy to get any deal ratified.

GM’s workforce is seeking to phase out the two-tier pay system of previous contracts, increased job security and more money, said Erik Gordon, a law and business professor at the University of Michigan. GM has been building goodwill with its workers in hopes of avoiding a contract rejection like Fiat Chrysler’s, he said.

“The lights will be on late,” Gordon said. “Neither side wants a strike.”

Late-Night Bargaining

The Fiat Chrysler contract was approved after UAW members there rejected an initial agreement and sent their leaders back to the bargaining table, where they secured larger signing bonuses and bigger raises for the second-tier workers.

About 200 negotiators, divided into 13 subcommittees focusing on issues including health care, safety and training programs, are meeting in Detroit’s UAW-GM Center for Human Resources, a GM spokeswoman said. Talks are expected to go late into the night on Saturday and may run up against Sunday night’s deadline.

If the two sides fail to reach an agreement before the end of the weekend, they may agree to extend the deadline to continue talks.

Should GM and the union fail to reach an agreement, the UAW could call a strike targeting a plant that makes key parts, such as engine or transmission components, to choke off production companywide, said Bloomberg Intelligence automotive analyst Kevin Tynan. The union’s strategy would be to minimize the number of workers it has to pay from its strike fund, he said.

GM said Thursday that it will add 1,200 jobs at a car factory in Detroit before announcing Friday that it plans to lay off about 500 hourly employees at its small-car plant north of the city.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE