SOUTHFIELD, MICHIGAN – The United Auto Workers will continue its strike against General Motors Co. until a tentative deal is ratified by its full membership, extending their walkout for at least another week.
Voting on the proposed contract will begin Oct. 19 and ballots will be due by Oct. 25, Brian Rothenberg, the UAW’s spokesman, said during a press conference Thursday in Detroit. The strike began Sept. 16 and has cost GM an estimated $2 billion.
GM shares fell 0.5 percent to $36.02 in late trading. The stock is down about 7 percent since the strike began.
After reaching a tentative agreement on Wednesday, the UAW released highlights of the accord on Thursday. While it notably doesn’t throw a lifeline to GM’s Lordstown assembly plant in Ohio, the automaker is offering to pay $11,000 ratification bonuses to senior workers. It’s also dangling $60,000 early retirement buyouts for up to 2,060 employees and providing annual raises and lump-sum payouts.
Keeping workers on strike “is an indication they don’t feel like it’s a slam dunk,” Arthur Wheaton, director of the Worker Institute at Cornell University, said in reference to the union. “They better get it out to a vote because it’s a nightmare if it gets voted down.”
Every day the strike continues costs GM about $100 million of profit, Bank of America Merrill Lynch analyst John Murphy wrote in a report this week.
“We encourage the UAW to move as quickly as possible through the ratification process, so we can resume operations and get back to producing vehicles for our customers,” GM said in a statement.
The union’s local presidents and chairmen — roughly 200 officials — met Thursday after being called to Detroit earlier this week when the two sides began to make major progress hammering out a new contract.
The proposed agreement shortens the length of time temporary employees need to work before converting to permanent status, a major sticking point in the negotiations. Workers will get 3 percent wage increases in the second and fourth years of the contract, and 4 percent lump sums in the others.
“It’s certainly a generous economic deal,” said Art Schwartz, a former GM labor negotiator who is now a consultant in Ann Arbor, Michigan. The one issue that could derail the deal is the automaker’s decision to follow through with closing three U.S. factories.
“The UAW kind of got everything the members wanted, except those three plants,” Schwartz said.