DETROIT -- Bargainers for General Motors and the United Auto Workers reached a tentative contract deal Wednesday, signaling a potential end to the monthlong strike that brought the company's U.S. factories to a standstill.
The deal, which the union says offers "major gains" for workers, was reached after months of bargaining but won't bring an immediate end to the strike of 49,000 hourly workers. They will likely stay on the picket lines as two union committees vote on the deal, after which the members will have to approve it.
Terms of the tentative four-year contract were not released, but it's likely to include some pay raises, lump sum payments to workers and requirements that GM build new vehicles in U.S. factories.
The stakes were rising for both sides as the strike entered a fifth week, costing GM billions of dollars, forcing workers to live on $275 a week and denting the economy in Michigan and the Midwest. Analysts at Bank of America Merrill Lynch estimate that the strike has cost GM about $2 billion of earnings, and its striking workers may have lost $2,000 of profit sharing and as much as $4,000 in take-home pay.
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The walkout also became a national political issue, coming up during Tuesday night's Democratic presidential debate in Ohio, which has lost thousands of auto industry jobs.
The strike reached deep into GM's supply chain, including Arkansas. Daniel Cushman, president of Tontitown-based P.A.M. Transportation Services, said Tuesday that the trucking company had to find other work for about 400 company drivers affected by the strike.
The walkout meant P.A.M.'s largest customer "essentially shut down operations without warning," Cushman said in the company's quarterly earnings report.
If approved, the deal will be used as a template for talks with GM's crosstown rivals, Ford and Fiat Chrysler. Normally the major provisions carry over to the other two companies and cover about 140,000 autoworkers nationwide. It wasn't clear which company the union would bargain with next or whether there would be another strike.
Art Schwartz, a former GM negotiator who now runs a labor consulting business, said depending on the contents, the contract could influence wages and benefits at other manufacturers. But he said foreign automakers with U.S. factories, mainly in the South, always give pay raises and shouldn't be affected much.
"They're located in low-wage areas, and they pay well," he said. "The people who work there are kings of the locality."
The strike did show that the union still has power in the auto industry. "I think economically the UAW will do just fine in this agreement," Schwartz said.
Early on, GM offered new products in Detroit and Lordstown, Ohio, two of the four U.S. cities where it planned to close factories.
The company said it would build a new electric pickup to keep the Detroit-Hamtramck plant open and build an electric vehicle battery factory in or near Lordstown, Ohio, where GM is closing an assembly plant. The battery factory would employ far fewer workers and pay less money than the assembly plant.
Mark Wakefield, a managing director at AlixPartners, a consulting firm with a large automotive practice, said automakers were expected to spend some $225 billion over the next five years on development of electric and self-driving vehicles.
"Industry profit is still good, but it's down from its peak of a few years ago," he said. The combination of heavy spending and slowing sales "has created some problems for them."
UAW Vice President Terry Dittes said in a statement Wednesday that the "number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve." He said the union's bargaining committee recommends that the GM National Council -- comprised of presidents and chairmen of locals around the country -- vote in favor of putting the deal up for a ratification vote.
Clarence Trinity, a worker at GM's engine and transmission plant in the Detroit suburb of Romulus, Mich., said the deal sounds good, "But I have to see it in writing or hear from the leaders."
Trinity said he can't figure out why it took 31 days for the strike to end. "I don't understand what General Motors was expecting to get out of us. Maybe they didn't expect us to strike. Maybe they didn't expect us to strike this long."
It's unclear if GM will be able to make up some of the production lost to the strike by increasing assembly line speeds or paying workers overtime. Many GM dealers reported still healthy inventories of vehicles even with the strike.
If all of the committees bless the deal, it's likely to take several days for GM to get its factories restarted.
Matt Himes, a worker at the GM plant in Spring Hill, Tenn., heard news of the deal in Ohio, where he's trying to help his wife sell their house after the Lordstown GM plant where he used to work was closed.
He hopes good news keeps coming. If they can sell their house, his wife can finally move to Tennessee with him.
"I'm proud that we stuck our ground and everybody stuck together," Himes said of the union workers during a phone interview. "And I'm relieved that hopefully it worked out, got us a good contract, and we can move on and get back to work making cars like we should be."
The union's bargainers have voted to recommend the deal to the UAW International Executive Board, which will vote on the agreement. Union leaders from factories nationwide are to travel to Detroit for a vote today. The earliest workers could return would be after that.
In past years, it's taken a minimum of three or four days and as long as several weeks for the national ratification vote. Workers took almost two weeks to finish voting on their previous GM agreement, in October 2015. Then skilled-trades workers rejected it, causing further delays.
"The No. 1 priority of the national negotiation team has been to secure a strong and fair contract that our members deserve," union Vice President Terry Dittes, the chief bargainer with GM, said in a statement Wednesday. The agreement, he said, has "major gains" for UAW workers.
The strike had shut down 33 GM manufacturing plants in nine states across the U.S., and took down factories in Canada and Mexico. It was the first national strike by the union since a two-day walkout in 2007, and the longest since a 54-day strike in Flint, Mich., in 1998 that also halted most of GM's production.
Information for this article was contributed by Tom Krisher, Mike Householder, John Seewer and Jonathan Mattise of The Associated Press; by David Welch and Keith Naughton of Bloomberg News; and by Neal E. Boudette of The New York Times.
A Section on 10/17/2019