GM Strike Fate Hinges on Pickup Plants Voting In Favor at Polls

(Bloomberg) -- A tentative agreement between General Motors Co. and the United Auto Workers union to end a more than five-week strike hinges on ratification by a handful of large branches, including a pickup plant in Flint, Michigan, that votes on the deal Wednesday.

The factory’s 4,800 workers and two other big facilities -- another truck plant in Fort Wayne, Indiana, with 4,500 staff, and an Arlington, Texas, operation with more than 5,000 -- have yet to weigh in ahead of a Friday deadline. It may come down to “yes” votes at these busy GM factories edging out “no” votes from members at the carmaker’s idled plants and others that build smaller vehicles that are less secure.

Those three big plants make out well under the deal -- it provides them iron-clad job security over the four-year contract and beyond. The automaker is rolling out new Chevrolet Silverado and GMC Sierra pickups from Flint and Fort Wayne, where it’s adding staff. In Arlington, GM has invested $1.4 billion since 2015 to build the next generation of Cadillac Escalade, Chevy Tahoe and GMC Yukon SUVs.

Workers at those three factories -- which account for 30% of the UAW’s entire voting membership at GM -- may be content with promised concessions such as 3% raises in two years, 4% lump sums for the other two and $11,000 ratification bonuses. Those opposed are unswayed by pay bumps and angered that GM is closing three plants at a time of near-record profits.

“It’s more likely to pass than not,” said Harley Shaiken, professor of labor relations at the University of California at Berkeley. “You have workers in their fifth week on the picket line and want to get back. You have a big signing bonus, health-care benefits intact and a way to harmonize pay for workers.”

Still, Shaiken cautions that workers entered the negotiating period angry about GM threatening to close four U.S. plants -- three of which did not get new products as a result of the agreement -- and the company’s use of temporary workers. It will be close, he said.

On Tuesday, UAW Local 1097 in Rochester, N.Y., voted against the deal with 83% of its 636 workers saying no to the agreement. GM shares pared an early drop of as much as 1.3% to trade down 0.5% to $36.12 at 9:58 a.m. Wednesday in New York.

Spring Hill Scare

The carmaker is eager to end the strike, which began Sept. 16 and has cost it an estimated $2 billion. GM got a scare when workers at one of its larger plants, a former Saturn factory in Spring Hill, Tennessee, that makes SUVs, turned down the tentative labor agreement in a tight vote on Monday. Spring Hill’s 3,300 staff nixed the deal by a mere seven votes. Those who cast ballots included 142 employees who transferred -- many of them unhappily -- from an idled GM factory in Lordstown, Ohio.

Staff at GM plants with plenty of overtime have little fear of losing their jobs, said Rich LeTourneau, chairman of Local 2209, which represents Fort Wayne’s 4,500 workers. “I think it’ll pass based on the money,” he said in an interview. “People will look at this and say, how does it help me and how does it hurt me? They won’t go back out on strike for a little more money.”

Several smaller branches have overwhelmingly approved the agreement, including roughly 1,400 workers at a transmission plant in Toledo, 555 at a plant in Saginaw, Michigan, and 53 at the General Motors Tech Center in Warren, Michigan.

Another big voting bloc that could help get the deal over the line are GM’s 16,000 “in-progression” employees hired at $18 an hour. Under the existing 2015 labor agreement, it would take eight years for them to reach the top wage of about $30. But the new deal with GM would allow them to start earning the top wage of $32.32 an hour in four years or less, according to the union.

The deal mandates that GM hire temporary workers full-time after three years of service. For some workers, that isn’t good enough, since GM used to hire them after 90 days more than a decade ago. The issue will test solidarity since there are only about 3,000 temps voting. For that issue to weigh heavy on the ballot, other workers will have to sympathize with them.

‘Correcting a ‘Mistake’

In-progression workers don’t like making half the pay of veteran employees next to them on the assembly line, said Karlton Byas, a health and safety trainer at GM’s car plant that sits on the border between Detroit and the town of Hamtramck. He said he’ll vote in favor of the deal because he gets a raise and the plant has a new product coming in.

“That was a mistake eight years ago and we’ve corrected it,” Byas said while grilling hot dogs on a picket line Monday. “To me that was major. And personally for this plant, that’s major.”

Like Lordstown, GM designated its Detroit-Hamtramck plant “unallocated” -- meaning it had no new product planned for the facility. But unlike the Ohio factory, the Detroit-area plant will get a lifeline in the form of a pledge by GM to build electric trucks and SUVs there under the new contract. That helped grab Byas’ vote and that of others, he said.

The investment in Detroit-Hamtramck is part of $7.7 billion of investment GM is committing to its U.S. facilities, along with other sweeteners for UAW members such as keeping generous health-care benefits intact and offering early retirement packages to senior workers.

Another striker on the picket line, Marcellous Patterson, said he’s going to vote against the contract because he wants a better buyout package than the $60,000 GM is offering. But the 62-year-old thinks the agreement will be ratified because of support from younger workers. “It’ll pass because there are more young people, and young people want to start taking care of their families,” he said.

To contact the reporters on this story: David Welch in Southfield at dwelch12@bloomberg.net;Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson, Angus Whitley

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