GM agrees to put EV battery plants under labour contract, union says

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General Motors has agreed to include battery manufacturing plants in its overarching contract with the United Auto Workers, the union said, meeting a crucial demand for employees anxious over the industry’s shift to electric vehicles.

The announcement by UAW president Shawn Fain came as the union’s strike against GM, Ford and Stellantis entered its fourth week, hobbling operations at certain facilities owned by the three Detroit carmakers.

The UAW has been pushing for higher wages and other concessions in a new contract after a previous one expired last month. It has also sought to extend contract protections at the plants that will provide many of the batteries for a wave of EVs hitting the market in the next several years.

“We’ve been told for months this was impossible,” Fain said on a livestream on Friday. “We’ve been told the EV future must be a race to the bottom, and now we’ve called their bluff.”

The union had been planning to shut down a GM assembly plant in Arlington, Texas, “and that threat has provided a transformative win”, said Fain, wearing a T-shirt printed with the words “Eat the rich”.

GM said: “Negotiations remain ongoing, and we will continue to work towards finding solutions to address outstanding issues. Our goal remains to reach an agreement that rewards our employees and allows GM to be successful into the future.”

The Detroit carmakers have been manufacturing batteries in the US through joint ventures with Korean battery makers that employ non-union labour at lower pay rates. They have opposed adding the joint ventures to their master agreements with the union.

GM has one battery joint venture in Lordstown, Ohio and another three are planned or are under construction. The Lordstown plant voted in December to unionise, but adding battery plants to the master agreement will eliminate the need for the union to win plant-by-plant elections, greatly easing the process of unionising workers.

A week ago, Ford chief executive Jim Farley said that the UAW was holding a deal on pay and working conditions “hostage” because it would not budge on its demand to add battery plants to Ford’s master agreement with the union.

GM had been “falling behind” Ford and Stellantis in its offer to the union, but “they leapfrogged the pack in terms of a just transition”, Fain said.

“Our strike is working,” he said. “But we’re not there yet.”

The strike began when about 13,000 workers walked off the job at assembly plants in Michigan, Ohio and Missouri, before spreading to parts depots and then additional assembly plants. About 25,000 workers are now on strike out of the 146,000 workers the UAW represents at the Detroit carmakers. The UAW did not announce plans to widen the strike to new locations this week.

The rolling nature of the strike has sown chaos in each carmaker’s highly interconnected operations. So far the companies have furloughed nearly 4,000 workers who are not on strike, saying the work stoppages elsewhere prevent normal manufacturing.

GM earlier this week said the strike had so far cost it $200mn.

The union is demanding a 36 per cent wage increase over four years, down from an initial 46 per cent request, as well as for all workers to be paid on the same wage scale. Carworkers’ pay decreased by about 20 per cent in real terms in the five years to 2022, largely driven by a pay cut at Ford.

Pay for UAW employees starts at $16.67 an hour for temporary workers and tops out at $32.32 an hour, according to Kristin Dziczek, a policy adviser at the Federal Reserve Bank of Chicago. At 40 hours a week, that ranges from $35,000 to $67,000 a year.

Workers can earn more through overtime or profit-sharing, which limits the companies’ payout to workers in lean years. Dziczek estimated labour costs per employee, including all remuneration, statutory costs and retiree benefits, at $66 per hour.

Ford made an offer on Tuesday that included a “more than 20 per cent” pay rise for employees as well as restoring a cost-of-living adjustment and to shorten the four-year timeframe it currently takes to reach top pay. GM made a counter-offer to the union on Thursday, while Stellantis’ last offer came on September 29, but neither carmaker provided details.