In what could quickly become the longest national strike against General Motors in nearly 50 years, the United Auto Workers set up picket lines at GM factories from Michigan to Texas.
The strike, which involves 49,000 full and part-time workers, began on the heels of an impasse that developed almost immediately after the negotiations opened in July. Only about 2% of the voluminous contract language was in place as the strike deadline approached on Sept. 14, according to a UAW source familiar with the talks but not authorized to speak publicly.
Some of GM proposals didn’t arrive until 90 minutes before the deadline, the source added.
GM said it tried to meet the union’s economic concerns by offering a mix of what it described as best-in-class wages, a richer profit-sharing formula, a ratification bonus of $8,000 and additional health-care benefits, including autism therapy care, chiropractic care and allergy testing.
In addition, GM said it would discuss solutions for the “unallocated” assembly plants in Detroit and Lordstown, Ohio, and investments in eight plants in four different states. The $7 billion represented all new money and was not a repackaging of investments already in the GM pipeline for plant modernization.
The list included the introduction of all-new electric trucks and an opportunity to become the first union-represented battery cell manufacturing site in the U.S. as well as additional new vehicle and propulsion programs, according to a GM statement distributed to the press after the UAW press conference announcing the strike.
However, major unresolved issues revolve around the wages and status of new workers and temporary workers, who now account for up to half the workforce in the U.S. auto industry.
Before the talks began, company representatives said during background briefings, leading up to the bargaining that a flexible workforce helped hold down labor cost of Detroit automakers, which still exceed those of non-union transplants.
The UAW was founded in the 1930s on the principal of equal pay for equal work, noted Gary Walkowicz, a UAW committeeman who represents union members at the Ford Motor Co. plant in Dearborn, Michigan. The two-tier system, where workers are paid a lower wage than “legacy” workers, who make $31 per hour.
Last time around in 2015, UAW’s top officers and negotiators underestimated the frustration of the two-tier issue, which created rifts at the plant level. The frustration about the “two-tier” system ultimately led to rejection of the first “pattern” contract with Fiat Chrysler Automobiles N.V.
The UAW was forced back to the bargaining table and it negotiated an eight-year “grow-in” period that put lower-tier union members on a path to the top wage. In-progression workers want the grow-in period shortened and temporary workers want to become full-time workers with a chance for better pay, profit sharing and better benefits.
“If you’re full-time you have a chance for a career,” said Quentin Williams, a 26-year old temp worker from the Ford Rouge complex in Dearborn, who turned up a rally demanding a Fair Contract organized by the Auto Workers Caravan, which has pushed the UAW leadership to become more militant and to end concessions given during the industry-wide recession in 2007 through 2009.
“You shouldn’t have to have a second job to work for the Big Three,” he said.
The UAW staged a two-day strike against GM but ultimately led was resolved on the company’s terms when the union agreed to create a separate trust, the VEBA, to pay the cost of retiree health care, relieving the GM, and later Ford and Fiat Chrysler of the obligation to cover the doctor bills of retirees.
The union has staged selective and local strikes several times in recent years, but the last full-blown national strike was an epic struggle in 1970 when GM was a very different company and employed more than 450,000 across the U.S.
Nonetheless, after the picket lines went up, union members said the strike was necessary.
“It’s about time,” said Rick Sugden as he organized pickets outside the main gate at the GM assembly plant in Orion Township, where the automaker builds electric vehicles.
“GM doesn’t want to pay our health care,” said Aaron Edwards of UAW Local 653 as he passed around a sign-up sheet among pickets on a darkened street corner outside the GM complex in Pontiac, Michigan. “We’re to protect our wages and our health care,” he said.
“I walked out. They didn’t push me out. I believe GM has treated us unjustly,” said another of the group of pickets in Pontiac after the strike began Monday morning.
GM has earned more than $35 billion during the past three years and the company’s guidance to investors prior to the strike indicated the trend was expected continue through the third and fourth quarters since vehicles sales in the U.S. remain relatively healthy
However, shutting down North American production will cost GM $400 million per day, noted the investor website Seeking Alpha, which quoted from the Center for Automotive Research in Ann Arbor, Michigan. Seeking Alpha also noted CAR estimated GM has enough inventory for a short strike of one or two weeks, but after that it starts to get “painful.”
Meanwhile, International Brotherhood of Teamsters announced that its member would not cross picket lines to haul cars stockpiled at GM assembly plants for shipment to dealers around the country.