Relief In Sight for GM Dealers as UAW Strike Comes to a Close

By Mia Bevacqua 

It’s been over a month since the United Auto Workers (UAW) went on strike against General Motors. The demonstration has affected OEMs, suppliers and dealers. Thankfully, there may finally be an end in sight.

On Wednesday, October 16, 2019, the Union’s negotiators struck a tentative deal with GM to bring the strike to a halt. At the time of this writing, an official agreement is still in the works and the strike is still in effect. But things are looking up.

The Proposed Agreement
The UAW has not released details regarding the proposed four-year agreement yet. According to the Detroit News, however, the terms are likely to mirror those revealed by GM over the last month.

Details include a 3% base-wage increase during two of the four years, as well as 4% lump-sum bonuses in the other two years. Plus, the proposed deal includes an increase in ratification bonuses from $8,000 to $9,500 for permanent employees. Temporary employees would see a $3,000 ratification bonus.

Furthermore, the deal will likely include at least $9 billion in new investments and the creation of 9,000 jobs. The UAW will also have access to increased profit-sharing, as GM plans to eliminate a $12,000 cap. And temporary employees who have worked at least three years will be hired on permanently. Health care benefits will also be increased.

Relief in Sight for GM Dealerships
The settlement may come just in time for GM dealers who were starting to feel the pinch. While most dealerships still have an ample supply of new cars on the lot, service centers were beginning to see a gradual decline in available parts.

It’s worth noting, however, that the parts squeeze isn’t nearly as severe as it could have been. Like most other automakers, GM now farms out a great deal of its work to various independent parts suppliers. And although suppliers have been affected by the strike in numerous ways – including suffering as many as 12,000 temporary layoffs – they have continued to output product.

In essence, it’s helped that GM didn’t put all of its eggs in one basket. Though if the strike were to continue, dealers and consumers would likely see a substantial decrease in parts availability. But that scenario is unlikely to come to fruition as the strike draws to a close. Soon, it may be back to business as usual.