General Motors (GM) - Get General Motors Company (GM) Report shares jumped higher Wednesday after the United Auto Workers union said it had reached a tentative agreement to end a month-long strike at the country's biggest carmaker.
The deal, which will now be voted on by the UAW leadership in the next 24 hours, would then be sent to the UAW rank-and-file for final approval. Workers could return to work while they're voting on the agreement, a move that could end the near month-long strike, which started on September 16 is estimated to have cost GM nearly $2 billion.
"The No. 1 priority of the national negotiation team has been to secure a strong and fair contract that our members deserve," said UAW vice president Terry Dittes in a statement.
General Motors shares rose 1.24% on Wednesday to $36.71.
Around 48,000 UAW members walked off the job in mid-Septembr Monday after talks over a new four-year contract broke down as the two side sparred over key issues such as profit sharing, healthcare benefits and plant closures under CEO Mary Barra.
The strike action, the first since 2007, rippled through GM's supply chain, as well, triggering layoffs at its assembly plant in Oshawa, Ontario, and caused political consternation when company executives shifted the healthcare insurance costs of the striking workers to the UAW itself.
GM was further pressured by figures last week which showed a sharp third-quarter slump in China sales, which fell 17.5% over the three months ending in September, the fifth consecutive decline that takes its nine-month total to around 2.26 million.
Slowing growth in China, as well as the impact of its year-long trade dispute with the United States, has clipped American carmarker's share of the the world's biggest car market to just under 10%, according to official industry data, while German and Japanese rivals have seen solid year-to-date gains.
GM's China woes also highlight a key proposal in the UAW's bargaining position, which called on the carmaker to produce its entire fleet in domestic plants and assembly facilities.
"We have made it clear that there is no job security for us when GM products are made in other countries for the purpose of selling them here in the USA.," Dittes wrote last week. "We believe that the vehicles GM sells here should be built here. We don't understand GM's opposition to this proposition."
At present, around three quarters of GM's U.S. sales are made from cars built in plants based in Mexico, with a smaller portion coming from a factory in Oshawa, Ontario.
Last year, GM said it would shutter five plants in North America, including in Maryland, Michigan and Ohio and cut 15% of the salaried workforce, including 25% fewer executives, as part of an effort to streamline decision making.