Oct 25, 2019

40-day GM strike ends with new labor contract

General Motors workers and supporters in Bowling Green, Kentucky on Sept. 20. Photo: Reuters/Bryan Woolston/File Photo

The first U.S. auto strike in 12 years came to an end on Friday after the United Auto Workers and General Motors approved a four-year labor contract, CNBC reports.

Where it stands: UAW secured "annual lump-sum bonuses" or raises plus $11,000 ratification bonuses, per CNBC, and said it would not block GMs' plans to close four facilities across the U.S. GM committed to adding thousands of new jobs and said it would decrease the number of years required for workers to earn more than $32 an hour. Some of the union’s 48,000 members employed at GM are expected to return to work as soon as Saturday.

What they're saying: “We delivered a contract that recognizes our employees for the important contributions they make to the overall success of the company, with a strong wage and benefit package and additional investment and job growth in our U.S. operations,” said Mary Barra, GM chair and CEO.

Go deeper: GM strike complicated by union probe and political points

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Detroit's gamble on the future

Illustration: Eniola Odetunde/Axios

The deal between one of Detroit's biggest automakers and striking workers is a calculated bet on a vision for the auto industry that's far from certain.

The big picture: GM can afford the rich contract terms negotiated with the United Auto Workers — as long as nothing goes wrong. Higher gas prices, an economic downturn or a new president with different priorities could throw off the entire equation and put GM and other domestic automakers in a financial bind.

Go deeperArrowOct 25, 2019

UAW president to take leave of absence during corruption probe

Gary Jones in July 2019 in Detroit. Photo: Bill Pugliano/Getty Images

United Auto Workers President Gary Jones will begin a leave of absence on Sunday in the midst of a federal corruption probe, CNBC reports.

The backdrop: Twelve people have been charged in the ongoing investigation as of this week, per CNBC. UAW and General Motors approved a four-year labor contract on Oct. 25, ending the first U.S. auto strike in 12 years. Five days later, the union reached a tentative agreement with Ford Motor Company, as well.

Go deeper: 40-day GM strike ends with new labor contract

UAW strike is a $3 billion hit to GM's 2019 earnings

Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

GM announced Tuesday that it had earned $2.3 billion in the third quarter, down 8.7%, adding that the 40-day UAW labor strike will reduce its 2019 earnings by about $2 per share — or nearly $3 billion.

Driving the news: About one-third of the strike impact was felt in the third quarter, which ended September 30. Workers returned to factories last Friday after ratifying a new four-year contract. GM said the financial results, driven by truck and SUV profits, demonstrate its ongoing resilience and said the labor agreement allows it to maintain its operating flexibility in the future.

Go deeper: GM, Michigan and 2020

Keep ReadingArrowOct 29, 2019