Walkout, which began Sept. 16, has cost automaker estimated US$2 billion
DETROIT, Mich. (Bloomberg) — General Motors (GM) employees near Nashville, Tennessee, narrowly rejected a proposed contract with the United Auto Workers (UAW), an early indication that the union’s vote to end a more than five-week strike could be a close call.
In one of the first votes by a major union local, a 51 per cent majority of GM’s roughly 3,300 workers at its Spring Hill assembly plant cast ballots against the tentative agreement reached last week. Most UAW locals won’t post results until Friday. At least three smaller locals have voted overwhelmingly in favor of the deal since Monday.
The Tennessee results probably are “casting some market doubt over whether deal will be ratified by the Friday deadline,” Arndt Ellinghorst, an analyst at Evercore ISI, wrote in a report. The agreement requires the approval of a majority of UAW members nationwide.
The Spring Hill vote is a setback for GM, which is seeking approval for a deal that would give workers three per cent raises in two of the four years of the contract and an US$11,000 signing bonuses. While the UAW also managed to keep their generous health-care benefits intact and secure commitments for the company to invest US$7.7 billion in U.S. plants, some workers are upset GM intends to follow through with plans to close three factories at a time when it’s earning near-record profits.
GM shares traded down 0.8 per cent to US$35.65 as of 9:57 a.m. in New York on Tuesday.
The fate of the agreement will rest on larger locals that have yet to vote, including at GM’s three largest plants: Arlington, Texas, which employs 5,078 hourly workers; Flint, Michigan, with 4,800 hourly workers; and Fort Wayne, Indiana, with 4,500 employees. Smaller locals in Toledo, Ohio, and Warren and Saginaw, Michigan, have said that big majorities of their members cast ballots in favor of the agreement.
Other key concessions the company made to the UAW include retirement buyouts and a path for temporary workers to become permanent. But GM refused to save the car factory it’s idled in Lordstown, Ohio, or to shift work from Mexico. Many Lordstown workers are disgruntled the union was unable to secure a future for their factory, and Spring Hill has 142 workers who transferred from that Ohio plant.
UAW, Local 1853 production workers in Spring Hill rejected the deal 51 per cent to 49 per cent, while skilled workers approved the pact by 55 per cent to 45 per cent. The total against exceeded those in favor by just seven votes, despite GM’s vow to spend US$1 billion on Spring Hill and a Michigan plant for a next-generation family of mid-size SUVs.
Spring Hill builds the GMC Acadia and Cadillac XT5 and XT6 SUVs, plus several engines, including a V8. The money for the new models will be shared with a plant in Lansing, Michigan, that manufactures the Buick Enclave and Chevrolet Traverse SUVs.The UAW strike began Sept. 16 and has cost GM an estimated US$2 billion. It’s weighed on the broader economy, contributing to the steepest drop in factory production in five months.