The United Auto Workers has summoned its General Motors Council leaders from around the country to Detroit for special meeting this week for an update on the costly monthlong strike against GM.
The official agenda for the meeting issued by the union calls for an a “Contract update and another agenda item to be determined.”
“I wouldn’t read too much into it,” said a source familiar with the progress of the talks but who is not authorized to speak publicly. “There is no tentative agreement,” they said despite a series of meetings during the weekend to review the details of a UAW contract proposal.
Harley Shaiken, a labor expert from the University of California, said there still appears to be serious differences on key issues such as the wages, the status of temporary workers and investment and production allocation to plants covered by the UAW contract.
Meanwhile, Morgan Stanley Analyst Adam Jonas said in a note to investors that he believes GM has the upper hand in the strike.
“In our view, today’s concerns about lost unit volume, cash drain, potential credit downgrades and impact on suppliers and SAAR will at some stage flip to ‘tight’ inventory levels, replenishing dealer stocks and improved working capital. We do not expect GM’s 2020 outlook to be radically impacted,” Jonas said.
Morgan Stanley has an Overweight rating on General Motors despite the rising cost of the strike, putting pressure on both sides to end the walkout.
The typical GM blue-collar workers hired before 2007, make about $30 per hour, or $1,220 per week, not including overtime pay. So far, the four weeks of the strike roughly $4,800 each. Strike pay has cost the union roughly $48 million so far, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.
In a new study, CAR estimated GM was losing $450 million each week, or $1.8 billion, since the strike began Sept. 16. GM made more than $8 billion last year and has racked up more than $30 billion in profits in the past five years.
CAR also said the cost of the strike focuses on how much the work stoppage is costing GM, but few have estimated the broader costs of the strike to the U.S. economy or individual states.
Automotive manufacturing employment multipliers are among the highest of any sector of the U.S. economy.
The UAW-GM strike is sufficiently large enough to not only affect many sectors of the U.S. economy, but also to reach beyond the borders of the nine states that are hosts to UAW-represented GM manufacturing facilities. GM, the UAW, GM suppliers, federal, state, and local governments, and many other businesses incur losses each day the strike continues, noted CAR Analyst Kristin Dziczek.