UAW sets midnight Sunday deadline for GM contract

DETROIT -- The UAW has given General Motors a late Sunday deadline to reach a tentative agreement on a new four-year contract, the union said.

The union on Saturday notified GM of an 11:59 p.m. ET Sunday contract termination. The notice did not threaten a strike, though the UAW could call one if an agreement isn’t reached.

The sides last month extended the deadline past its original Sept. 14 expiration and have been negotiating since then, although the union’s main focus had been on hammering out a new contract with Fiat Chrysler Automobiles, ratified this week.

The UAW used a similar strategy earlier this month when talks with FCA intensified. On Tuesday, Oct. 6, it set a midnight deadline for Wednesday. The two sides announced the new contract agreement just a few minutes after they hit the deadline. 

The fresh GM contract deadline strengthens the possibility that an agreement will be reached by late Sunday, although there are still some “significant issues” being hashed over in marathon bargaining sessions this weekend, a person familiar with the matter said.

GM issued a statement confirming the new deadline.

“We are working with them to address the issues and remain committed to obtaining an agreement that is good for employees and the business,” GM said.

About 200 negotiators, divided into 13 subcommittees focusing on issues including health care, safety and training programs, are meeting in Detroit’s UAW-GM Center for Human Resources, a GM spokeswoman said. Talks were expected to go late into the night on Saturday and may run up against Sunday night’s deadline.

The FCA agreement for its 37,000 UAW-represented workers is being viewed as a template for contracts with GM and, eventually, Ford Motor Co. It eliminates the divisive Tier-2 wage for entry-level workers by providing them with an eight-year ladder of pre-determined annual raises until they reach full wages of $30 an hour.

It also includes the first wage increase that legacy Tier 1 workers will have seen in more than a decade.

The UAW represents 52,600 GM workers and 53,000 at Ford.

Starting point

UAW President Dennis Williams has hinted that he views the terms of the FCA deal as a starting point for what the union would like to get from GM and Ford, which are larger and more profitable than FCA.

But GM and Ford also cut far more lucrative profit-sharing checks to its workers -- more than $30,000 over the four years of the most recent contract, vs. about $9,000 for FCA workers.

Art Schwartz, a labor consultant and former GM negotiator, said Williams must be careful not to set his members’ expectations too high for extracting significantly more out of GM and Ford.

“If he goes for a radically richer contract, I think that’s taking a risk,” Schwartz said. “There’s a tradeoff between cost and jobs. Anything that drives up labor costs over time would risk job security and new-job creation. That could be self-defeating for the UAW."

GM negotiators are likely dangling the prospect of new jobs -- and peace-of-mind for existing workers -- through a product plan that calls for several new vehicles in coming years.

They’re also likely pointing out the investment the company has made in U.S. facilities. In recent months, GM has disclosed plans to spend $5.4 billion on plant upgrades and expansions over the next three years. The company spent $16.8 billion on its U.S. facilities since its mid-2009 bankruptcy through 2014.

Ready in Fort Wayne

GM workers are prepared to strike at the Fort Wayne, Ind., plant that makes profitable GM pickup trucks, said Brian Hartman, president of the UAW local there.

"We have everything ready to roll if it comes," said Hartman, referring to a possible order to strike from Williams or Cindy Estrada, UAW vice president for GM affairs.

Hartman said workers at the Fort Wayne plant were pleased that the FCA deal ratified last week gave a clear path for workers hired after 2007 to reach top pay. But, he said, they want it to take four years not eight from hiring to reach top pay, which will be about $30 per hour by the end of the four-year Fiat Chrysler contract.

"GM being in a different (more profitable) position than Chrysler, our members are looking for a bigger pie, not a bigger piece of the pie," Hartman said, referring to words of Walter Reuther, UAW president from 1946 to 1970.

'Our time'

The UAW has said often "this is our time" to receive remuneration from concessions in 2007 and 2009 that helped GM to survive a bankruptcy in a government-sponsored bailout. 

However, GM executives have made clear that its continued health largely depends on its ability to keep labor costs competitive with foreign-owned companies with U.S. plants. The rivals have eroded the No. 1 U.S. automaker' s market share for decades.

Average U.S. labor costs for Toyota Motor Corp. are about $48 per hour, and those of Nissan Motor Co are $42, according to estimates by the Center for Automotive Research.

Reuters and Bloomberg contributed to this report.