DETROIT (CN) – The United Auto Workers and General Motors on Wednesday reached a tentative four-year labor agreement to end the longest automaker strike since 1970 and the first in 12 years.
The union summoned senior leadership to Detroit this week and GM CEO Mary Barra entered the fray, in what was considered a good sign that meaningful progress was made in the often contentious negotiations.
The agreement was announced by UAW Vice President Terry Dittes on Wednesday morning.
“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” he said in a statement. “Out of respect for our members, we will refrain from commenting on the details until the UAW GM leaders gather together and receive all details.”
The Detroit Free Press reported that several issues were settled early but there were some sticking points that bogged down the negotiations as the strike reached a total of 31 days.
GM agreed to give temporary workers a process to become permanent that was acceptable to union officials. Temporary employees were previously hired in at $15 an hour but received no profit-sharing benefits or paid time off and had reduced health benefits.
When GM suggested that workers pay 15% of health care costs instead of the current 3%, the answer was no way. The current plan with workers remains unchanged, but profit-sharing limits were relaxed in the agreement.
Under the profit-sharing agreement, hourly workers are paid $1,000 for every $1 billion in GM earnings from pretax profits in North America. There used to be a cap at $12 billion but that has since been removed.
The automaker also agreed to raise ratification bonuses and make general wage increases.
One major discussion centered on GM’s plans to commit to producing internal combustion cars in North America in an era when electric vehicles are expected to supplant them in the years ahead. The automaker also was widely criticized for building trucks and SUVs in Mexico to cut costs as several plants in the United States were shuttered.
In a report published days ago, the Center for Automotive Research estimated the strike cost GM $450 million a week.
The agreement is set to be reviewed by the National GM Council. If approved, the deal will be submitted to UAW-represented GM employees for ratification.
Dittes stressed in his statement that the strike was technically not over until those approvals were finalized.
“Until the Council reviews and votes to approve the proposed tentative agreement the strike will continue. During the October 17 meeting, the Council will decide whether to continue the strike until ratification concludes or to stop the strike at the time of the Council’s approval of the agreement,” he said.
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