Yahoo Finance General Motors' (GM) JV Plant Strikes a Tentative Deal With UAW
General Motors’ GM battery supplier plant has reached a tentative local agreement with the United Auto Workers (“UAW”). The facility, which is operated by Ultium Cells and is a joint venture (JV) between GM and South Korea's LG Energy Solution, saw its workforce unionize in December 2022, five months after production began.
Per Shawn Fain, president of UAW, the agreement would raise most workers' hourly wages by $3.59 upon ratification. The agreement increases the top production wage from $20 to $35 after one year, raises the starting wage from $16.50 to $26.91 and includes improved health and safety measures.
The plant, employing 1,700 people, is near GM's former Lordstown Assembly Plant, which was idled in 2019 and sold to Lordstown Motors. A key issue in the UAW's recent negotiations with Detroit automakers was whether JV battery plant employees would be included in the national agreement with GM, granting them equal pay and benefits as assembly plant workers. During a 46-day strike last fall, GM agreed to include Ultium Cells employees in the master contract. When UAW members ratified the new contract with GM, Ultium Cells employees received an immediate pay raise of $6 to $8 per hour. The agreement also allowed former GM workers to transfer back to the area.
Per Kevin Kelly, spokesperson of General Motors, the tentative agreement will now move to the ratification process. UAW posted highlights of the tentative agreement online, including 30% raises over three years, a $3,000 ratification bonus, immediate pay increases for skilled trades and enhanced health and safety provisions.
The two other Ultium Cells facilities are located in Spring Hill, Tennessee, and Lansing, which is currently under construction.
As automakers shift to EVs, battery plants have become key union battlegrounds, with UAW officials prioritizing job security and plant organization.
After a six-week strike last fall, the UAW secured new labor deals with General Motors, Ford and Stellantis, including a 25% wage increase and the return of cost-of-living adjustments. The agreement with GM brought Ultium workers under the master agreement, but the 1,600 UAW members at the plant must still approve the contract.
The UAW has faced challenges in organizing outside Detroit, including a defeat at a Mercedes plant in Alabama after a win at a Volkswagen plant in Tennessee.
Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Blue Bird Corporation BLBD, Oshkosh Corporation OSK and American Axle & Manufacturing Holdings, Inc. AXL, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 9.86% and 11.92%, respectively. The EPS estimates for 2024 and 2025 have improved 12 cents and 10 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for AXL’s 2024 sales and earnings suggests year-over-year growth of 3.05% and 544.44%, respectively. The EPS estimates for 2024 and 2025 have moved up 3 cents and 9 cents, respectively, in the past 30 days.
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