Bill Pugliano / Getty Images

UAW, GM reach tentative contract

The United Auto Workers and General Motors Co. have reached a tentative agreement, avoiding a strike for now

Negotiators for the United Auto Workers and General Motors Co. (GM) reached a tentative agreement on undisclosed terms for a new four-year labor contract, averting a threatened strike, the union said late on Sunday night

The UAW said the agreement was reached at 11:43 p.m. Sunday, 16 minutes before the deadline it had set to either reach an agreement or call a strike at GM's U.S. plants.

Details of the proposed contract weren't immediately available. The UAW said local union leaders will meet Wednesday in Detroit to vote on the tentative agreement. If they approve it, GM's U.S. hourly workers will vote on it.

The agreement covers 52,600 U.S. auto workers at 62 GM facilities in the U.S.

UAW President Dennis Williams said the tentative deal with GM " will present stable long-term significant

UAW President Dennis Williams said the proposed deal will provide "long-term, significant wage gains and job security benefits now and in the future." The union also hinted that this agreement — like a contract passed last week by Fiat Chrysler workers — gradually will eliminate the two-tier wage system in the plants.

GM confirmed in a separate statement that it had reached a tentative accord with UAW negotiators. "The new UAW-GM national agreement is good for employees and the business," Cathy Clegg, head of North American GM manufacturing and labor, said in the statement.

One of GM's key goals in the talks was to make sure that the agreement would not saddle it with high fixed costs that could overburden the company if the cyclical automotive industry takes a downturn.

The industry sits at the top of that business cycle now, as U.S. auto sales are seen hitting 17.3 million vehicles this year. That's well up from the 10.4 million vehicles sold in 2009 in the depths of recession when GM went through a government-sponsored bankruptcy and bailout.

On Thursday, union members at Fiat Chrysler voted to approve a four-year contract that includes pay raises and phases out the two-tier wage system over eight years.  The strict two-tier wage system paid newer hires considerably less than veteran workers, and failed to provide a clear path to top pay.

While details of the GM-UAW pact were not released, the Fiat Chrysler contract set a pattern that was used for GM and is expected to also set the broad outlines of a deal with Ford. The latter is expected to come to the table with the UAW after the worker ratification vote at GM.

Williams indicated at that time that the union wanted even better deals from GM and Ford Motor Co. because they are more profitable. The UAW hasn't yet reached a tentative agreement with Ford.

GM reported last week that it earned $1.36 billion in the third quarter, including a record $3.3 billion pretax profit in North America. The company overcame $1.5 billion in costs from recalls over deadly ignition switches and beat Wall Street profit forecasts by a wide margin.

Wire services

Related News

Find Al Jazeera America on your TV

Get email updates from Al Jazeera America

Sign up for our weekly newsletter

Get email updates from Al Jazeera America

Sign up for our weekly newsletter