General Motors Co. (NYSE:GM) and the United Auto Workers have reached a tentative deal to end a 31-day strike that has cost the company an estimated $2 billion U.S.
However, the 48,000 striking auto workers are likely to remain off the job during a ratification vote that could last another two weeks, the union said in a written statement. Even if fast-tracked, a vote could take a week to get all the ballots in and ratify the deal. At a cost of $100 million a day in lost profits, that could be another half a billion hit to GM’s balance sheet.
Voting on the deal will take place in GM automotive plants and during working hours to ensure the highest turnout for union ratification. A potential problem hanging over the process is a federal corruption probe that has implicated United Auto Workers President Gary Jones. Workers who have lost faith in the union leadership may vote against the contract on principle.
Whatever the outcome, GM’s stock price will likely be impacted by the results of the vote. Shares of GM rose 1% Wednesday on news of the tentative deal but are down about 6% since the labour stoppage began.
