UPDATED: 11/20/15 11:50 pm ET - adds Ford ratification
DETROIT -- The UAW has ratified a new four-year labor agreement with General Motors, ending two weeks of deliberations amid opposition to the deal from skilled-trades workers.
The union’s 14-member International Executive Board decided to approve the contract after a meeting Friday with officials from local UAW chapters across the country.
The contract secures the first wage increases for GM’s hourly workers in more than a decade and creates a pathway for entry-level, Tier 2 workers to reach the full wage of around $30 after eight years on the job.
Earlier this month, skilled trades workers voted against the tentative contract, even though a 55 percent majority of hourly workers overall voted in favor. Skilled-trades workers, who include electricians, mechanics and other more-senior workers with specialized skills, account for about 8,500 of GM’s overall hourly work force of 52,700.
In a statement late Friday, the union said that discussions with GM led to changes that “protect core trades classifications and seniority rights,” paving the way for the the Executive Board’s approval.
After the skilled-trades workers voted against the tentative pact, UAW leadership held meetings at each GM facility across the country to find out more about their concerns. That process led to the additional talks with GM to iron out those issues, the union said in its statement.
The union’s UAW-GM Council -- made up of local-chapter officials from around the country -- decided in its meeting Friday that the changes should quell the skilled-trades workers concerns, the union said.
The union’s constitution requires passage by both production and skilled-trades workers for ratification, but allows the International Executive Board to override a no vote.
Had the board not ratified the agreement Friday, it would have had to extend the deadline with GM for a second time. The outcome has been in limbo for two weeks since a majority of hourly workers approved it despite the skilled-trades workers’ objection.
In a statement, GM said it is “pleased that the UAW membership ratified the 2015 UAW-GM National Agreement, which is good for employees and the business. We will continue to work with our UAW partners to implement the agreement, and engage our employees in improving the business and building great vehicles for our customers.”
The contract establishes an eight-year grow-in period for Tier 2 workers, who were hired in recent years and are paid an hourly wage of about $16-$19, slightly more than half that of their Tier 1 counterparts. About 20 percent of GM’s hourly UAW workers fall under the lower-paid Tier 2 wage scale.
New hires start at $17 an hour and see wage increases each year through the eighth year of employment, when their hourly wage will reach nearly $30. That will match Tier 1 workers, who also are getting their first wage increases in more than a decade: 3 percent raises in the first and third years of the contract, with lump-sum bonuses in the second and fourth years.
GM also committed to spend about $8 billion across 12 U.S. facilities over the life of the contract. That spending should “create and/or retain” more than 3,300 jobs, the UAW said.
The deal, which takes effect Monday, also includes an $8,000 signing bonus. Workers also will be eligible for lump-sum performance bonuses of $1,000, in addition to an annual $500 bonus if GM hits vehicle-quality targets.
Hours after the GM result was disclosed, the UAW said its tentative agreement with Ford Motor Co. had been ratified, meaning each of the Detroit 3 now has a new four-year contract.