GM: Pattern Bargaining May Be Back on if Tentative Unifor Agreement Ratified

The Canadian union Unifor announced on Oct. 10 that it has reached a tentative agreement with General Motors. The GM Canada strike started earlier on Oct. 10 is stopping so members can vote on the agreement that we expect will take about a week as members need to be educated on the deal. This contract covers about 4,300 workers across three facilities: the Oshawa assembly plant that makes light duty and heavy duty Silverado pickups, the Woodstock parts distribution center, and the St. Catharines engine and transmission plant. Unifor in a press release said GM is matching the pattern agreement ratified by Ford members on Sept. 24, which includes base wage increases for production workers of 20% over the contract’s three years to CAD 44.52 an hour, plus another CAD 1.61 an hour cost of living increase, retirement benefit increases, halving the time to get to the maximum hourly wage to four years, and moving all workers on a defined contribution plan and new hires to a “Defined Benefits style pension” on Jan. 1, 2025. We speculate this may be some type of hybrid pension plan rather than a resumption of a traditional defined benefit plan that GM closed to hourly Canadian workers in October 2016. The contract also has a CAD 10,000 ratification bonus and a CAD 4,000 bonus for part time temporary workers. We are not changing our fair value estimate until we see the valuation impact, if any, of the United Auto Workers strike.