- The United Auto Workers and General Motors have reached an agreement that will end collective bargaining between the union and automakers in Detroit.
- GM is the latest Detroit automaker to reach an agreement with the union after historically contentious talks.
- The four-and-a-half-year tentative agreements still need to be ratified by each automaker’s members.
The United Auto Workers and General Motors have agreed to an agreement that will end collective bargaining between the union and automakers in Detroit after more than six weeks of targeted U.S. labor strikes, sources told CNBC.
GM is the latest Detroit automaker to reach an agreement with the union after historically contentious talks. Tens of thousands of workers across the country went on strike after the sides failed to reach an agreement by September 14.
Two sources familiar with the GM-UAW talks said negotiations took place last night and into the early hours of the morning to reach an agreement. News of a deal was first reported on Monday from Bloomberg.
Spokespeople for UAW and GM declined to comment Monday.
The four-and-a-half-year tentative agreements still need to be ratified by each automaker’s members. The key economic aspects of the deals, such as 25% wage increases, were modeled on Ford’s original deal.
The raises and benefits bring the top wage overall to more than $40 an hour, including a 68% increase in starting wages to more than $28 an hour, the union said of the deals with Ford and Stellantis.
These agreements, among other things, reintroduced cost-of-living adjustments, shortened the eight-year path to top wages to three years, and enabled the right to strike during plant closures, among other significantly improved benefits.
Sources told CNBC that the GM deal is consistent with those improvements.
The strikes have cost GM, Ford and Stellantis billions of dollars in lost production. Ford said on Thursday that the strike had cost the union $1.3 billion and that the agreement, if ratified by members, would increase labor costs by about 1.5 billion euros $850 to $900 per vehicle produced.
GM said Tuesday the strike had cost the company about $800 million.
The proposed agreements are record-breaking for the union, which has been far more confrontational and strategic in the talks than in recent history.
The union began negotiations with all three automakers simultaneously, breaking from recent history when UAW leaders negotiated with each automaker individually, selected a leading company to focus their efforts on, and then negotiated the remaining contracts based on one drafted a preliminary peak agreement.
It is not immediately clear to what extent the collective agreements will increase labor costs for companies, which had argued that giving in to all the union’s demands would harm their competitiveness and even their long-term profitability.
Deutsche Bank recently estimated the total cost increase of Ford’s agreement at $6.2 billion over the life of the agreement; $7.2 billion at GM; and $6.4 billion at Stellantis.