The United Auto Workers (UAW) have come to an agreement with General Motors (GM), marking a significant milestone in the resolution of the ongoing strike. This news comes just days after the union reached a tentative deal with Stellantis (STLA) and expanded its strike at GM.
Tentative Agreement Reached
According to sources familiar with the negotiations, GM and the UAW reached a tentative agreement on Monday, although the official announcement will be made by the UAW later today. This development signals progress in bringing an end to the strike that has impacted more than 50,000 workers at GM, Ford Motor (F), and Stellantis.
A Step Towards Ending the Strike
The strike initially began on September 15th when approximately 12,000 workers walked out at one facility per automaker. With the tentative agreement now in place between GM and the UAW, all three automakers have secured agreements. However, it is important to note that union members must still vote to accept the deals. Nevertheless, the UAW has urged workers to return to work at Ford and Stellantis while the ratification process takes place.
As news of the deal broke, GM’s stock experienced a slight decline of around 0.3% around noon. In contrast, the S&P 500 and Dow Jones Industrial Average saw gains of 0.6% and 1%, respectively. Despite this positive development, weak guidance from automotive chip supplier ON Semiconductor (ON) has raised concerns among investors regarding electric vehicle (EV) demand. As a result, Tesla (TSLA) stock has declined by 4.4%.
New Labor Deals Reached for Canadian and U.S. Auto Workers
Earlier on Monday morning, the union representing Stellantis workers in Canada, Unifor, announced a strike that was quickly resolved. This comes after new agreements have been reached with Stellantis and GM, giving both U.S. and Canadian auto workers new deals with all three automakers.
Typically lasting for three years, the Canadian agreements with Ford and GM include wage increases of about 15% over the course of the contract, with adjustments related to inflation.
The U.S. agreements have a longer duration of approximately four years. However, the 2023 contracts, currently under discussion, are expected to run through April 2028. The decision to extend the contract is partly motivated by the desire to allow workers the option to go on strike if necessary on May 1, known as May Day, which is recognized as a celebration of labor in many countries.
Wage Increases and Improvements
Workers can anticipate raises of around 25%, along with adjustments for inflation and various other enhancements.
The deals now await ratification, a process likely to occur within the next week or two. If members vote in favor, the contentious 2023 labor negotiation season will come to a close for the Detroit Three.