G.M. Workers Approve Contract and End U.A.W. Strike

By Neal E. Boudette

United Auto Workers on Friday embrace after hearing the news that the contract was ratified outside of the Flint Assembly Plant.
United Auto Workers on Friday embrace after hearing the news that the contract was ratified outside of the Flint Assembly Plant.Credit...Erin Kirkland for The New York Times

The longest nationwide strike against General Motors in half a century ended on Friday after a solid majority of the company’s union members delivered their support for the four-year contract hammered out by their leaders.

The United Auto Workers union emerged with substantial wage increases and succeeded in ending a two-tier wage structure that had been a particular irritant in its ranks. It also won commitments to new G.M. investments in United States factories, while accepting the permanent shutdown of three plants already idled.

After almost six weeks on picket lines, some of G.M.’s 49,000 union workers could be back on the job Saturday morning, though it may take days to get back to full production.

“We delivered a contract that recognizes our employees for the important contributions they make to the overall success of the company,” G.M.’s chief executive, Mary T. Barra, said in a statement.

The U.A.W. said 57 percent of the nearly 41,000 members voting had backed the contract proposal. Now it will turn its attention to the other big Detroit automakers, Ford Motor and Fiat Chrysler. The union usually seeks to reach similar terms in a process known as pattern bargaining.

Patrick Anderson, the chief executive of Anderson Economic Group, a research and consulting firm, said that G.M. lost an estimated $1.75 billion as a result of the strike. But the walkout inflicted a wider economic toll, particularly in the Upper Midwest and other areas dependent on the auto industry, causing layoffs at G.M. suppliers like Lear Corporation.

In total, striking G.M. employees and workers at the suppliers lost an estimated $988 million in wages, Mr. Anderson said. “It’s already affecting home repairs, vacations, savings for college, holiday shopping, restaurant purchases,” he said.

For G.M. workers, the contract will yield wage increases of 3 percent in the second and fourth years and 4 percent lump sum payments in the first and third years, similar to what the union obtained in 2015.

Even larger gains are in store for those in a category called “in progression,” the lower scale of a two-tier wage system negotiated in 2007 when the Detroit automakers were financially reeling.

Workers hired after that date, about a third of the overall work force, started at about half the pay of veteran employees and had no prospect of reaching the top wage, currently $31 an hour. Over the course of the new contract, the disparity will be phased out, and those with four years’ experience will rise along with more senior workers to the new top level of $32 an hour.

“Yeah, that part is nice,” said Chaz Akers, 24, a worker at the Detroit-Hamtramck plant who earns $19.50 an hour after three and a half years with the company. “Everybody will be at the top.”

In addition to pay increases, G.M. workers will get bonuses of $11,000 for ratifying the contract. They will continue to pay 3 percent of their cost of health care, well below the percentage that G.M.’s salaried workers contribute.

“It’s a rich contract for workers,” Mr. Anderson said. “The health care coverage would be the envy of nearly every worker in America.”

There were also rewards for temporary workers, about 7 percent of G.M.’s union work force, who will have a path to permanent employment after three years. About 900 of them will become full employees in January, the union said, and 2,000 more by 2021.

U.A.W. members were once the best-paid manufacturing workers in the country, and could count on steadily rising wages and benefits. But as the fortunes of the Detroit automakers slumped in the 1990s, wage growth slowed, and union ranks declined as the companies closed plants and automation reduced the need for laborers on the assembly line. The U.A.W. now has just under 400,000 members, down from 1.5 million in 1979, and 540,000 in 2006.

As part of the new contract, the company pledged to invest $7.7 billion in its United States plants, and another $1.3 billion in ventures with partners, providing a measure of job security. G.M. will put $3 billion toward overhauling the Detroit-Hamtramck plant, which had been scheduled to close in January. Three-quarters of the 700 workers there voted in favor of the contract.

At the same time, the agreement allows G.M. to close three idled factories permanently, including one in Lordstown, Ohio, eliminating excess manufacturing capacity at a time when auto sales are slowing. It also puts the company in a more stable position if the economy goes into a recession.

But the agreement, estimated to increase labor costs by $100 million per year, will deepen G.M.’s disadvantage compared with some competitors. Before the strike, labor — including wages, benefits and other expenses — cost G.M. about $63 an hour, according to the Center for Automotive Research. The cost for foreign automakers that operate nonunion plants in the South is about $50 an hour. Many of their plants pay less than $20 an hour.

Harley Shaiken, a labor relations professor at the University of California, Berkeley, said the U.A.W.’s wage gains and new rules for temporary workers could help the union’s efforts to organize Southern auto plants. Foreign-owned plants “have largely been impregnable to the U.A.W., but these gains well could put them over the top in future votes.”

In June, workers at the Volkswagen plant in Chattanooga, Tenn., narrowly rejected joining the U.A.W. The union was rebuffed by a significant margin in a 2017 vote at a Nissan plant in Mississippi.

Michelle Kaminski, a professor of labor relations at Michigan State University, said the G.M. strike and the terms won by the U.A.W. were a sign of labor’s renewed strength in recent years, along with teachers’ strikes in a number of places.

“Labor is still vibrant, and when it fights, it wins,” she added.

The contract was backed by substantial margins at several truck factories that have been earmarked for upgrades. At G.M.’s Flint plant, which has about 4,800 hourly workers, members of U.A.W. Local 598 approved the contract with 61 percent of the votes in favor.

At Local 652, which represents about 1,400 workers at a plant making sport utility vehicles in Lansing, Mich., the contract was approved with a 75 percent majority.

The closing of the Lordstown plant was one of the main sticking points for some workers voting against the contract. “We did everything that G.M. ever asked of us at times of concessions,” said Bill Goodchild, a member of Local 1112 in Lordstown. “We feel we deserve a product.”