GM to Pay $8 Million to 800 UAW Members for Improper 2019 Plant Closures

Jamie L. LaReau / The Detroit Free Press
GM to Pay $8 Million to 800 UAW Members for Improper 2019 Plant Closures United Auto Workers members attend a solidarity rally as the UAW strikes the Big Three automakers on September 15, 2023, in Detroit, Michigan. (photo: Bill Pugliano/Getty Images)

The United Auto Workers said Thursday that about 800 of its members at General Motors will share nearly $8 million in back pay due to an arbitration ruling that found GM violated the union's 2015 contract when it closed three plants in 2019.

The plants were Lordstown Assembly in Ohio and two transmission plants — one in Warren and one in Baltimore, Maryland.

The ruling on the compensation was announced Tuesday by Mike Booth, the UAW's vice president for the union's GM Department, in a letter to members that the UAW posted on its site.

"This is a remedy to the negative effects of management closing facilities, uprooting people's lives and forcing them to relocate to other markets to keep their GM jobs," Booth told the Free Press Thursday. "This payout can be life-changing to the members and their families impacted by GM's decision."

Retirement issue not addressed by arbitrator

In the letter, Booth told union members they will receive payments for lost overtime, 401(k) and pension contributions and performance bonuses, as well as cumulative interest of nearly $800,000.

"The arbitrator awarded nearly everything the UAW sought as a remedy for GM's breach," Booth wrote. "The union is pushing the company to implement the award as soon as possible."

The ruling did not resolve an issue with mutually satisfactory retirement, a plan that allows workers with at least 10 years on the job who have reached age 50 to begin benefits. The arbitrator found the issue not to be subject to arbitration, according to Booth's letter. But Booth said the union will continue to fight for that benefit for all eligible members.

GM spokesman Kevin Kelly said in a statement to the Detroit Free Press: "GM is pleased with the arbitrator’s decision related to the mutually satisfactory retirement benefits. We plan no further legal action regarding the arbitrator’s ruling on Doc 13."

This ruling comes about 18 months after the arbitrator first ruled that GM breached a provision of its 2015 contract with the UAW and that workers deserved to be compensated. According to the 29-page award ruling on the UAW's website, the provision said GM could not "close, idle ... partially or wholly sell, spin-off, split-off, consolidate or otherwise dispose any plants during the term of the agreement, which ran through mid-September 2019."

How GM explained the plant closures

GM permanently idled the three plants between March and August 2019. The union struck GM for 40 days starting that September.

As the Detroit Free Press previously reported, the UAW had initially sued GM in 2019 over the plant closings, but then dropped that lawsuit in lieu of arbitration after reaching a new tentative contract agreement with GM in October 2019. GM had characterized the plant closures as having "unallocated" product to the facilities, therefore it was different from a closure by GM's definition.

"Nowhere in the 2015, 2019 or 2023 contracts will you find the word 'unallocated,'" Booth told the Free Press. "The UAW GM Department will continue to fight for all the rights and benefits of our contract that our members deserve."

This expense comes a week after GM said its newly ratified contracts with the UAW and Unifor — the union that represents autoworkers in Canada — will increase its labor costs by $1.5 billion next year. In the U.S., the added costs amount to an average $575 per vehicle across the duration of the 4½-year UAW contract. But GM leaders have said they can afford it and have found ways to offset the added costs.

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