GM sweetens UAW contract offer with $7.7 billion in direct US factory investment

DETROIT — General Motors sweetened its latest contract offer to the United Auto Workers by upping the amount of money it’s committing to invest in U.S. factories to $7.7 billion in an attempt to end the union’s 26-day strike, a person familiar with the deal said Friday.

The proposal ups GM’s planned investment from $7 billion originally offered before the UAW started picketing Sept. 16. GM also told the union all $7.7 billion would be “direct” investments, rather than a mix of direct and “indirect” investments in its previous commitment, the person said, asking not to be named because the details aren’t yet public. Indirect investments could include joint ventures with other companies, like a battery maker.

The company said the offer, extended on Monday, is beneficial for both sides and “fair and worthy” of the union’s support to end its nearly four-week-old strike.

In a company-wide message to employees Friday, Executive Vice President of Global Manufacturing Gerald Johnson says the proposal addresses the UAW’s top concerns, including preserving health costs and a “clear path” for temporary workers to reach permanent employment.

“Our offer builds on the winning formula we have all benefited from over the past several years,” he wrote. “We remain focused on building a stronger future for everyone.”

The offer, he said, “commits to thousands of new jobs right here in the U.S. and billions of dollars in new investments.” Johnson did not include specifics, but an offer GM submitted to the union before the strike included more than $7 billion in new investments and more than 5,400 new or retained jobs.

Since that offer, Johnson said, GM has “done even more to address the issues the UAW has brought forward.” GM, according to Johnson, has told the union that “it’s critical” the sides come to a resolution to end the UAW’s strike.

“From the outset, General Motors has been committed to an agreement that is fair and worthy of our team members’ support,” he said. “That’s why before the contract deadline, we made an offer that we felt was strong. And since that offer, we’ve done even more to address the issues the UAW has brought forward.”

The most recent proposal, according to Johnson, also includes increases in worker compensation through wages and lump sum payments as well as improved profit-sharing and contract ratification bonuses. GM’s proposal prior to the strike included an $8,000 ratification bonus and wage or lump-sum pay increases in all four years of the deal.

The union declined to comment directly on Friday’s letter, referring questions to a Thursday afternoon letter to GM from UAW Vice President Terry Dittes that said the union’s subcommittees have been deliberating on several issues that were part of GM’s most recent proposal.

GM, in response to Dittes’ letter, urged the union to agree to “around-the-clock” bargaining in an attempt to reach a tentative agreement.

A potential deal wouldn’t mean an immediate end to the strike. The pact would still need approval from local union leaders as well as rank-and-file members. The local leaders also would decide whether workers would remain on picket lines or return to work during the voting process.

About 48,000 UAW members have been picketing outside GM’s U.S. facilities since Sept. 16.

The work stoppage has rippled throughout the automaker’s North American operations, causing thousands of additional layoffs. Wall Street analysts estimate GM is losing roughly $50 million to $100 million per day in lost production.

It also has contributed to substantial declines in GM shares during the past four weeks. The stock is down about 9% since Sept.13, the last trading day before the strike. GM shares were trading up 3% late Friday morning after opening at $35.22.