The United Auto Workers (UAW) union and General Motors Co (GM) have reached a preliminary agreement on a four-year labor contract, which will avert the threat of a strike. The tentative agreement was announced late Sunday evening.
Several hundred UAW union leaders from different GM plants will vote on the proposed deal during a meeting on Wednesday. After the labor leaders approve of the measure, the contract will be voted on by the union's 52,700 GM workers.
Just last week another UAW contract was approved by Fiat Chrysler Automobiles workers.
Union President Showed His Approval for the Agreement
According to UAW President Dennis Williams, "We believe that this agreement will present stable long-term significant wage gains and job security commitments to UAW members now and in the future ... We look forward to presenting the details of these gains to local union leaders and the membership."
At this time, details of the proposed agreement have not been released. However, GM's head of North American GM manufacturing and labor, Cathy Clegg, has confirmed the proposed agreement by saying, "The new UAW-GM national agreement is good for employees and the business."
General Motors Seeks to Maintain 10 Percent Profit Margin
GM's primary concern in the negotiations was to ensure that the company would not be overburdened by high fixed costs, which could prove problematic in the event of an automotive industry downturn. At the moment, the industry is at the height of its business cycle. Auto sales are high, at 17.3 million so far this year. In 2009, during the economic recession, figures dropped to 10.4 million vehicles sold.
During talks over the union agreement, GM negotiators were strict about not sacrificing a 10 percent profit margin that they are currently making in the North American market. By finalizing this agreement, GM and the union workers will avoid strikes, which would be extremely costly for the company and the workers as well.
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