GM shares rise as sources say automaker, union nearing deal to end strike
CEO's involvement raises hopes of more pressure to end weekslong strike
General Motors Co. and the United Auto Workers union were near a deal on Tuesday to end a 30-day strike that has cost the automaker about $2 billion US after chief executive Mary Barra and president Mark Reuss took part in contract talks, according to two people briefed on the matter.
While a final agreement has not been announced, the No. 1 U.S. automaker and the union have agreed to terms on most issues but were finalizing the wording on some matters, said the people, who asked not to be identified as the talks were continuing.
A deal was expected to be announced on Wednesday.
GM declined to comment on the involvement of its top two executives in the negotiations. A UAW spokesperson declined to comment.
The union has summoned its national council of factory-level leaders to Detroit for a meeting Thursday, billed as an update on contract talks. The group could be assembling to vote on a tentative agreement. It also will decide if workers should return to their jobs before or after they vote on the deal.
"I don't think Mary Barra would have returned unless they were making progress," said Art Wheaton, an auto industry expert at the Worker Institute at Cornell University in Ithaca, N.Y. "And I don't think they'd have told everybody to return to Detroit on Thursday."
Shares of GM rose on news of a potential settlement, closing Tuesday up 2.1 per cent at $36.26 US.
The UAW strike began on Sept. 16, with the union's members at GM seeking higher pay, greater job security, a bigger share of profit and protection of health-care benefits. Other issues include the fate of plants GM has indicated could close and the use of temporary workers.
It is the longest strike against an automaker since a 54-day strike in 1998 in Flint, Mich., which cost GM $2 billion US. The union also went on a brief two-day strike against General Motors in 2007.
After GM angered the UAW negotiators last week by appealing directly to workers and revealing details of the Detroit automaker's latest offer, the sides have continued talking. The UAW made a counter offer to GM on Friday.
Details of GM's revised offer emerged over the weekend and included an increase of its proposed ratification bonus by $1,000 to $9,000. GM also proposed three per cent pay raises in the second and fourth year of the four-year-contract and three per cent and four per cent lump sum payments in the first and fourth year respectively.
It agreed to make temporary workers with three years of service permanent and give those workers a $3,000 ratification bonus.
The Center for Automotive Research in Michigan has estimated the strike's weekly costs to GM and the UAW strike fund at $450 million US and $12 million, respectively.
The strike has led to hundreds of temporary job cuts at GM's Ontario locations, though production restarted last week at the company's assembly plant in Ingersoll, Ont.
In addition, suppliers are feeling the effects of the work stoppage.
Guelph, Ont.-based parts producer Linamar Corp. has said the strike was costing it about $1 million Cdn a day, while Canadian-based auto parts giants Magna International Inc. and Martinrea International Inc. are also being impacted in terms of lost revenue.
The strike has also seen production at two plants in Mexico halted.
With files from CBC News and The Associated Press