GM, UAW agree on tentative labor contract that could end a monthlong strike by 48,000 workers

DETROIT — General Motors and union leaders have reached a tentative deal on a new labor contract that could end the United Auto Workers’ monthlong strike against the automaker, the UAW said Wednesday.

Details of the proposed four-year deal were not disclosed. However, the union’s members with GM are expected to receive raises of 3% to 4% or lump-sum bonuses each year as part of the accord. The deal also will include the addition or retention of 9,000 hourly U.S. jobs and a “clear path” for temporary workers with three or more years to become full-time employees, according to two people briefed on the pact.

The company’s shares jumped by about 2.5% in morning trading before leveling off to close up by just over 1% at $36.65 a share. The stock of crosstown rival Ford Motor was flat, closing at $9.07 a share.

Under the deal, GM also will invest at least $9 billion in its manufacturing operations over the life of the contract, including production of an all-electric pickup for a plant in Detroit that was potentially slated for closure. UAW members also are expected to maintain their health insurance, which is considered “gold standard” and requires employees to cover roughly 3% of the total costs, according to one person familiar with the talks.

“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” UAW Vice President Terry Dittes, director of the UAW GM department, said in a statement. The UAW’s national negotiating team is recommending that union members take the deal.

Dittes said he is refraining from discussing details until local union leaders can meet in Detroit on Thursday to review the proposed tentative agreement.

GM confirmed the proposed deal and said details of the accord “will be provided at the appropriate time.” Spokespeople with the union and company declined to disclose additional details.

The deal is likely about two weeks away from being finalized by rank-and-file union members. It still needs approval from local union leaders, who will vote whether to approve the deal during a private meeting Thursday in Detroit. The local leaders will also decide whether workers will remain on picket lines or return to work during the voting process.

If the local UAW leaders approve the proposed contract, GM’s unionized workforce must then vote on it. The new contract, if ratified by members, will be used as a template by the union for negotiations with Ford and Fiat Chrysler.

While the tentative agreement could end the strike against GM, negotiators aren’t likely breathing sighs of relief just yet. Ratification of leadership-approved tentative agreements has traditionally been a guarantee; however, workers with Fiat Chrysler four years ago rejected an initial deal, sending negotiators back to the table.

Ahead of a deal being reached this year, industry experts cautioned that the ratification of any agreement could be challenging amid a widening federal probe into corruption at the UAW’s highest ranks involving bribery, kickbacks and embezzlement of union funds.

“The federal investigation swirling around the contract makes getting that contract ratified much more difficult,” said Art Wheaton, a labor professor at the Worker Institute at Cornell University. “It is not in the company’s interest to have UAW’s leadership not be able to deliver a ratified contract.”

Former Ford CEO Mark Fields last month said the widening corruption probe will make it harder for union leaders to get their members to approve any potential new labor deals with the Detroit automakers.

“When you reach a tentative deal, the [companies] are relying on the union leadership to sell that to their rank and file,” Fields said on CNBC’s “Closing Bell.” “So it doesn’t weaken the UAW’s negotiating power, but what it does do is weaken the loyalty and the trust that the rank and file have in the leadership.”

About 48,000 UAW members have been picketing outside GM’s U.S. facilities since Sept. 16.

The work stoppage has rippled throughout the automaker’s North American operations, causing thousands of additional layoffs. Bank of America analysts estimate GM has lost more than $2 billion due to the strike.

It also has contributed to substantial declines in GM’s stock during the past four weeks. The shares fell by double digits earlier this month. They’re now down by about 4% since Sept.13, the last trading day before workers started picketing.

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