Production workers approve contract by 58.3%, while 59.5% of skilled-trades members rejected the deal

The United Auto Workers (UAW) union on 6 November announced the initial results of voting on the proposed four-year labour contract with General Motors (GM) in the United States. A majority of UAW workers at GM have voted in favour of the agreement, with 55.43% in favour and 44.57% against. However, UAW workers fall into two categories, production workers and skilled trades. Within that breakout, production workers approved the contract by 58.3%, while 59.5% of skilled-trades members rejected the deal. A salaried master agreement was approved by 100% of employees who voted, which is now classified as ratified by the UAW. In a UAW statement, the organisation said it "will hold meetings with its UAW-GM skilled-trades membership at each worksite over the next several days in order to determine what reason(s) they had for rejection of the tentative agreement. Once that inquiry has concluded, the UAW's International Executive Board shall meet to determine what appropriate steps shall be taken."

UAW rules require the approval of both production and skilled-trades workers for contract ratification, because there are elements of each contract specific to each group, report several media sources. However, the UAW leadership can overrule the skilled-trades members' rejection if it determines that they voted against the deal based on its economics or other reasons beyond ones unique to skilled-trades workers. Automotive News reports that the UAW overrode a rejection of a proposed contract by Chrysler's skilled-trades workers on that basis. MyEastTexas.com, citing CNN.com, reports that at least one objection from the skilled-trades workers is that the classification is not eligible for the USD60,000 early retirement bonus available to 4,000 production workers. The Detroit Free Press reports that skilled-trades members also object to a change in the range of jobs skilled-trades workers perform. Over the past several contracts at GM and other automakers, the number of skilled-trades categories has been reduced. The newspaper also reports there are between three and four production workers for every skilled-trades job.

In Ford's case, the UAW-Ford bargaining committee has reached a tentative agreement to present a contract to the UAW National Ford Council (NFC) for approval to propose it to members. The NFC is scheduled to meet on the morning of 9 November; if the NFC approves the tentative agreement, the contract will be proposed to Ford's UAW membership. Ford's agreement covers 53,000 workers at 22 US plants.

In a UAW statement, union vice president Jimmy Settles said, "We negotiated for a proposal that will solidify job security and create substantial economic gains for our hard-working members and their families. This agreement is significant for our members in that it creates a clear path for economic advancement for active members and rewards veteran employees for their sacrifices in recent years. It is one of the richest agreements in the history of UAW-Ford."

While neither the UAW nor Ford has released details of the tentative agreement, several media outlets, citing sources close to the negotiations, have reported key elements of the agreement. The Detroit News reports that Ford's agreement includes a USD10,000 total signing bonus (USD8,500 plus a USD1,500 advance on profit sharing), as well as USD9 billion in US plant investments by Ford. The same source reports the Ford agreement includes a provision for increasing wages for traditional workers in a similar eight-year pattern as the union contract agreed with Fiat Chrysler Automobiles (FCA) and included in GM's proposed agreement, along with USD1,750 in additional bonuses. Regarding the issue of entry-level, tier-2 workers, the Ford agreement is said to include moving them to the traditional, tier-1 workers' healthcare plans, as does the proposed GM agreement. It is also said to include USD70,000 early retirement buyouts, based on seniority, but does not change Ford's profit-sharing formula, which pays hourly workers USD1 for every USD1 million in North American profits. By comparison, the GM contract offered USD60,000 for early retirement buyouts. The Detroit Free Press reports the Ford agreement also includes a commitment to add up to 1,200 skilled-trades apprentices, the removal of a cap on profit sharing, and 3% raises for workers in the first and third years of the agreement and 4% lump-sum bonuses in the second and fourth years.

Ford issued a short statement on the union talks, saying, "Working with our UAW partners, we have reached a tentative agreement for the next four years for our employees and our business. The agreement, if ratified, will help lead the Ford Motor Company, our employees, and our communities into the future."

Outlook and implications

In GM's case, the UAW International Executive Board will determine the next steps; the board cannot change aspects of the agreement that are common to all members but, depending on the source of the skilled-trades objections, it can override them and ratify the contract. If it does not, options for the UAW include a strike or going back to the negotiating table. In Ford's case, if the NFC approves the proposal, it will go before the membership for ratification, with a vote possible later the same week. Initial indications are that Ford's agreement largely mirrors GM's, although with larger signing bonuses and a promise of a higher investment in future US production.

The partial ratification of the GM agreement follows the FCA agreement being first rejected, then approved only after it was reworked. However, the GM agreement appears to be more lucrative to members than the initial FCA agreement. While a strike is possible if the agreement is not ratified, it may be concluded from the 55% approval that the UAW is likely to choose to go back into negotiations to address the skilled-trades workers' concerns, rather than choosing the picket line. However, it is unclear at the time of writing what issues prompted the skilled-trades workers to reject the contract.

While Ford has made recent investment announcements, it was not as open in its plans for the near term as GM was going into the talks. Among the recent Ford investment announcements was a commitment to invest USD3.1 billion in its Michigan facilities through 2025, as well as plans to move a new Ranger into the Michigan assembly plant, which will lose the Ford Focus and C-Max in 2018, while production of small cars is being moved to Ford's plant in Mexico. That Michigan announcement was related to maintaining tax credits in the state, although the details were not announced. It is unclear if some or all of that would be part of the commitments in the UAW contract. GM's proposed contract included a commitment for USD1.9 billion in investment, above the USD6.4 billion the automaker has announced throughout 2015.

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