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G.M. Contract Terms May Be a Tougher Fit for Its Rivals

Submitted by jhartgen@abi.org on

The tentative contract that General Motors has worked out with the United Automobile Workers union is going to raise the automaker’s cost of labor and require a significant cash outlay. But G.M. won something that it had rarely attained in the past outside of bankruptcy: the ability to close three plants economically, the New York Times reported. Now the union is likely to try to win similar monetary gains from Ford Motor and Fiat Chrysler. And those companies may find them more costly, on a relative basis, said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich. G.M. workers will vote on the contract this week, with a result expected on Friday. Most union locals will hold seminars to outline the contract’s details to members, and they allow voting over two or three days. If the contract is ratified, it will end a strike that has idled 34 G.M. factories in the United States for more than a month and disrupted operations in Canada and Mexico. Analysts estimate that the walkout has cost G.M. at least $2 billion in operating profit. Under the proposed contract, the company’s 49,000 U.A.W. workers would get higher wages and bonuses, with no change in health benefits. Reducing the company’s health care costs, by shifting more to employees, was a concession that G.M. had hoped to win. In addition, G.M. pledged to invest $7.7 billion in United States factories, and to make additional investments of $1.3 billion through joint ventures. In the last contract, negotiated in 2015, G.M. made a commitment to invest $1.9 billion on top of $6.4 billion that it had announced before those talks began.

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