Following months of tense negotiations, General Motors (GM) Union Workers have voted to ratify a new United Auto Workers (UAW) deal, despite strong opposition amongst some workers.
The agreement, which was reached in October of 2019, grants workers higher wages and an additional $9 000 signing bonus, in exchange for increased work flexibility and lower healthcare benefits for retired employees. The net result is that current workers will receive a net pay increase of over 3.5%, although retired employees may find their healthcare coverage less favorable with the shift in provider.
Prior to the agreement, union negotiators and GM officials had gone back-and-forth for months in an attempt to develop a mutually beneficial contract framework which addressed the needs of the union’s active members while also recognizing the challenges posed by GM’s long-standing financial issues. A primary point of concern in the negotiations had been GM’s insistence that recent rounds of store and dealership closures gave them the right to reduce the amount in their payroll expenses.
In order to reach a final agreement, negotiators had to make compromises on both sides. The result was a highly contentious agreement, with some union workers feeling like the terms were too lenient on GM and their corporate concerns, while others believed the new terms were more favorable to the unions active members.
Ultimately, the agreement was passed by a slim majority, with just over half of union members voting in favor. The agreement was widely seen as a victory for current employees, with the net pay increase of over 3.5% ranking among the highest wage increases seen in recent years, as well as the signing bonus included in the deal.
However, the divisive nature of the vote was also cause for concern in some quarters. Critics of the agreement point to the lack of healthcare coverage for retirees as being particularly concerning, and have argued that a better deal could have been achieved through further negotiations.
As it stands, GM Union workers have passed the new UAW deal, and both parties are now preparing to implement the new terms. It will take some time to assess the full extent of the contract in both the short and long term, but it’s clear that the agreement marks a major shift in relationships between GM and the United Auto Workers Union.