General Motors (GM) is set to pay $8 million to United Auto Workers (UAW) members as compensation following an arbitration process related to the closure of plants in 2019. The ruling, which was reached in September, was recently announced by UAW-GM Vice President Mike Booth in a letter addressed to the union members.
According to Booth, the compensation covers various aspects, including lost overtime, 401(k) and pension contributions, performance bonuses, and nearly $800,000 in interest. He stated that the arbitrator awarded nearly everything the UAW sought as a remedy for GM’s breach of its 2015 contract with the UAW.
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The arbitration process unfolded over a year and a half, starting with an initial finding in which the arbitrator determined that GM violated Document 13 of its 2015 contract with the UAW. Document 13 explicitly stated that the company could not close, idle, or dispose of any plants during the term of the agreement, which extended through mid-September 2019.
GM had idled several plants, including those in Lordstown, Ohio, Baltimore, and Warren, Michigan, in violation of the contract. The company had also announced plans to close additional plants, but negotiations with the UAW and Canadian union Unifor resulted in securing new products for those sites.
Initially, the UAW had filed a lawsuit against GM over the plant closures but later agreed to drop the lawsuit in favor of arbitration when a new tentative contract agreement was reached in October 2019. GM had argued that it did not violate the previous contract, as it considered the action as “unallocating” rather than closing or idling.
While Booth expressed satisfaction with the arbitrator’s decision, he noted that certain compensation, such as “mutually satisfactory retirement benefits,” was dismissed as beyond the arbitrator’s jurisdiction. The UAW intends to continue the fight for this award on behalf of eligible members.
In response to the ruling, GM stated that it is pleased with the decision regarding retirement benefits and has no plans for further legal action regarding Document 13.
The $8 million payout comes on the heels of GM announcing that its newly ratified contracts with the UAW and Unifor will increase costs by $9.3 billion, averaging $575 per vehicle. Despite the added expenses, GM executives express confidence in offsetting these costs through other means.
Source: Automotive News (subscription required)
