General Motors And The UAW May Be Closing In On A Deal

General Motors Company GM and the United Auto Workers union may be closing in on a deal after Thursday evenings's negotiations continued into the early morning hours on Friday. Both sides reconvened on Friday to continue discussions. 

What To Know:

According to a report from CNBC, negotiations "appear to be nearing the finish line" based on information from three sources who agreed to speak on the condition of anonymity due to the confidential nature of the discussions.

According to the same CNBC report, the potential deal is based on the tentative agreement reached earlier this week between Ford Motor Company F and the UAW which increases the top wage rate by more than 30% to over $40 an hour.

Why It Matters: 

If General Motors and the UAW reach a tentative agreement, it would likely end the costly work stoppages that have plagued GM since the strike began on Sept. 15.

General Motors will also face a significant increase in labor costs as a result of a deal with the UAW. Deutsche Bank has estimated the overall cost increase of the tentative UAW agreement at Ford to be $6.2 billion over the term of the agreement, $7.2 billion at GM and $6.4 billion at Stellantis.

Leadership of General Motors and the United Auto Workers are meeting on Friday to continue discussions, and any tentative deal that is reached must be approved by local UAW leaders and then ratified by a majority of the union-represented workers.

Related News: Is the Ford UAW Deal The End For Tesla? 

GM Price Action: According to Benzinga Pro, shares of General Motors are down 4.8% at $27.18 at the time of publication.

Image: Courtesy of General Motors Company