GM workers staying on strike as members vote on new contract

Bloomberg

The United Auto Workers (UAW) will continue striking against General Motors Co until a tentative deal is ratified by members, extending its walkout for at least another week.
Voting on the proposed contract was expected to begin on October 19 and ballots will
be due by October 25, Brian Rothenberg, the UAW’s spokesman, said during a press conference in Detroit. The strike began on September 16 and has cost GM an estimated $2 billion.
GM shares fell 0.5% to $36.02 in late trading. The stock is down about 7% since the strike began.
The walkout has already had a profound effect on the US economy, contributing to the steepest drop in US factory production in five months. By deciding to stay on strike until ratification, the union may be acknowledging the challenge it will have convincing the rank-and-file it’s squeezed all the concessions it possibly can out of the company.
Keeping workers on the picket line “is an indication they don’t feel like it’s a slam dunk,” said Arthur Wheaton, director of the Worker Institute at Cornell University. “They better get it out to a vote because it’s a nightmare if it gets voted down.”
After reaching a tentative agreement, the UAW released highlights of the accord. While it notably doesn’t throw a lifeline to GM’s Lordstown assembly plant in Ohio, the automaker is offering to pay $11,000 ratification bonuses to senior workers. It’s also dangling $60,000 early retirement buyouts for up to 2,060 employees and providing lump-sum payouts and annual raises that will take hourly production wages up to $32.32 an hour by 2023.
Every day the strike continues costs GM about $100 million of profit, Bank of America Merrill Lynch analyst John Murphy wrote in a report.
“We encourage the UAW to move as quickly as possible through the ratification process, so we can resume operations and get back to producing vehicles for our customers,” GM said.
The union’s local presidents and chairmen — roughly 200 officials — met after being called to Detroit earlier this week when the two sides began to make major progress hammering out a new contract.