GM, UAW likely to reach tentative deal Wednesday, report says
DETROIT — General Motors and the UAW are likely to announce a tentative contract agreement on Wednesday that could soon end the union’s monthlong strike, Reuters reported, citing sources briefed on the negotiations.
The report said the two sides were nearing a deal Tuesday and “have agreed to terms on most issues but were finalizing the wording on some matters.” GM CEO Mary Barra and President Mark Reuss joined the talks Tuesday, signaling that a deal could be close.
The UAW has summoned leaders from plants around the country to Detroit for a Thursday meeting regarding a “contract update” and other yet-to-be-determined agenda items.
GM declined to comment on the potential for an agreement and on its top executives' involvement in bargaining.
“Talks continue,” a company spokesman said. Tuesday marks the 30th day of the union’s nationwide strike against GM.
The UAW’s Thursday council meeting, which it announced Monday evening, would offer the union’s leaders a chance to provide a face-to-face update on negotiations or to recommend presenting a tentative agreement to rank-and-file members for ratification.
The two sides traded jabs last week in public comments that accused each other of stalling the talks. GM submitted its most recent proposal to the union last week, which included a commitment to invest $7.7 billion in U.S. plants, a person with knowledge of the talks told Automotive News. The union presented its counterproposal Friday, but it has declined to provide details.
GM has not commented on the UAW counteroffer.
The contentious talks have been hung up by a number of topics, including the future of temporary workers, preservation of health care benefits and commitment to U.S. investment. The national strike, set to enter Day 30 on Tuesday, is the longest against a Detroit 3 automaker since 1970.
When a tentative deal is finally reached, the GM national council will also vote on whether to send some 46,000 hourly employees back to work or to continue the strike until the tentative agreement is ratified.
Losses are beginning to pile up for all parties, and the strike’s impact has ballooned to include suppliers, dealers and other businesses.
But GM continues to maintain a higher-than-average inventory, according to a report last week by Cox Automotive.
Despite the estimated tens of millions of dollars GM stands to lose each day the strike continues, Morgan Stanley analyst Adam Jonas wrote in a research note Monday that he doesn't "expect GM’s 2020 outlook to be radically impacted” by the work stoppage.
With plants across the U.S. idled and shutdowns spilling over into Mexico and Canada, the automaker is losing about $100 million a day in earnings before interest and taxes, John Murphy, a BofA analyst who recommends buying GM shares, wrote in a research report Tuesday. UAW members have probably forgone about $2,000 of profit-sharing and as much as $4,000 in net take-home pay.
“A prolonged strike could burn significant cash and bring GM to its knees,” Murphy wrote. “But investors likely will also react negatively if management is perceived to have caved into labor’s demands and GM’s long-term competitiveness is threatened.”
A GM spokesman declined to comment on the BofA report.
GM and the strike ended up being fodder for presidential candidates in Tuesday night’s Democratic debate in Westerville, Ohio, with New Jersey Senator Cory Booker criticizing trade deals that don’t put workers “at the center,” an oblique reference to U.S. President Donald Trump’s accord to replace NAFTA.
Beto O’Rourke, the former congressman from Texas, said workers striking outside GM’s idled Chevy Cruze plant in Lordstown, Ohio -- about 150 miles northeast from where the debate took place -- had been “devastated by GM and their malfeasance.” The automaker ranks No. 72 among the largest employers in Ohio, one of the moderators noted; it was No. 1 less than 25 years ago.
Candidate Pete Buttigieg, the mayor of South Bend, Ind., said it was common to see closed-down factories out the windows of his dad’s Chevy Cavalier during drives to school growing up. “Now I drive my own Chevy -- it’s a Chevy Cruze, used to be built right in Lordstown -- which is now one more symbol of the broken promises that this president has made to workers.”
It was still the most prominent role the auto industry has played in any of the debates thus far -- despite Detroit hosting one of them in late July.
GM shares rose 1.5 percent to $36.80 in morning trading on Wednesday.
Hannah Lutz, Michael Martinez, Reuters and Bloomberg contributed to this report.
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