DETROIT – General Motors and union leaders have reached a preliminary agreement on a new employment contract that could end the United Auto Workers' monthly strike against the automaker, the UAW said Wednesday.
Details of the proposed agreement were not immediately available. However, it is expected that the approximately 48,000 members of the union will receive increases and bonuses with GM under the agreement.
The company's shares rose by about 2.5% in the morning trade. Inventory by Ford Motor, a competitor from the neighborhood, increased by less than 1
Based on previous proposals, the company will also invest at least $ 7-7.7 billion in production and create thousands of new union jobs per hour over the next four years. The company also previously agreed to maintain its gold standard health insurance, which requires employees to pay approximately 3% of their total costs.
"The top priority of the national negotiating team was to make a strong and fair contract that our company has completed earning members," said UAW Vice President Terry Dittes, director of the GM department of the UAW, in a statement. The UAW's national negotiating team recommends that union members sign the agreement.
Dittes said he will refrain from discussing details until local union leaders meet in Detroit on Thursday to review the proposed interim agreement.
GM confirmed the proposed agreement and the details of the agreement "will be made available in due course."
The deal is expected to be completed in just two weeks by ordinary union members. It still requires the approval of local union leaders, who will vote at a private meeting in Detroit on Thursday to approve the deal. The local leaders will also decide if the workers will stay on picket or return to work during the voting process.
If the local UAW leaders approve the proposed contract, the unionized GM workers must vote on it. The new contract, if ratified by members, will be used by the union as a template for negotiations with Ford and Fiat Chrysler.
While the tentative agreement could end the strike against GM, the negotiators are only likely to breathe again. Ratification of interim arrangements approved by the leadership has traditionally been a guarantee. However, four years ago, Fiat Chrysler employees rejected a first agreement and sent the negotiators back to the table.
Before an agreement was reached this year, industry experts warned that ratifying an agreement could become challenging in the face of an expanding US federal investigation into corruption in the UAW's highest ranks with bribery, setbacks and embezzlement of union funds.
"The investigations surrounding the treaty make it difficult to ratify this treaty significantly," said Art Wheaton, a laboratory professor at the Worker Institute at Cornell University. "It is not in the company's interest that the leadership of the UAW be unable to deliver a ratified contract."
Former Ford boss Mark Fields said last month that the increasing corruption test would make it difficult for union leaders to get their members to agree to potential new employment contracts with Detroit automakers.
"When you make a preliminary contract, [companies] rely on the union leadership to sell it to their base," Fields said in CNBC's "Closing Bell." "It does not weaken the bargaining power of the UAW, but it weakens the loyalty and trust the base has in leadership."
About 48,000 UAW members have since been stalked before GM's US facilities Sept. 16.
The work stoppage has led to thousands of additional layoffs throughout the automaker's North American operations. Wall Street analysts estimate that GM has lost $ 50 to $ 100 million per day over the past four weeks.
In addition, this has contributed to a significant decline in GM shares. The stock had fallen by double digits since the beginning of the strike. Since 13 September, the last trading day on which the workers started the strike, they have fallen by about 4%.