The tentative contract must still be ratified by officers of the union and by members of the rank-and-file. The new labor agreement, the Times claims, “halts the long downward pull on wages in the auto industry that has persisted even as the industry recovered from the recession”.
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Despite GM being back on much better financial footing, a few analysts indicated the union and GM could opt to keep the plant on standby and effectively delay any decision on the plant.
Industry insiders told Automotive News the new deal with GM will all but certainly eliminate any limits on the percentage of second-tier workers who are paid inferior wages and benefits.
More than 40 percent of the Fiat Chrysler’s workforce is entry level. “I am regretful that we had to do anything and I think it’s a disgrace we had to do anything”, Gettelfinger said. Under the new deal, they will make roughly $29 an hour after eight years.
The tentative agreement came Sunday night, just minutes before a midnight deadline the union had set to strike at GM plants across the US if the two sides did not come to terms. The new contract will likely explain those plans in greater detail, as well as prevent a work stoppage which could drain up to $1.2 billion per week in revenue from the company.
Union officials claim to have achieved “significant” wage gains and “job security protections”, though specific details of the proposed contract are being kept confidential until after Wednesday’s ratification vote.
Any deal between GM and the UAW was expected to follow the outlines of one reached with Fiat Chrysler on October 7.
Ford on Tuesday reports its latest earnings, and Wall Street expects similarly rich results. GM last week reported a record third-quarter North American operating profit, and said the region’s operating margin will exceed 10% of sales in 2015, rivaling European luxury brands.
The automaker did note, however, that it would not comment further until the agreement is ratified. GM expressed a similar sentiment about its contract talks.
“We developed constructive solutions that benefit employees and provide flexibility for the company to respond to the needs of the marketplace”, she said. The two-tier wage system was unanticipated to be as enormous an issue at GM.
“There’s a larger message here”, said Shaiken, the labor relations expert.
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The UAW formally began negotiations with all three automakers in July.
