UAW calls national strike against GM; 46,000 workers to stay out
DETROIT – The UAW Sunday morning called a nationwide strike against General Motors, which was set to start at midnight.
It’s the first national UAW strike since 2007, coming against the backdrop of a federal corruption investigation that has implicated union President Gary Jones and his predecessor, Dennis Williams.
The action does not include Ford and Fiat Chrysler Automobiles, whose UAW contracts were extended while the union tries to negotiate a deal with GM that would be template for talks with the other two companies. The union let the GM contract expire at midnight Saturday, but told autoworkers with Sunday shifts to report.
The union represents about 46,000 GM autoworkers at 55 facilities in the United States. No talks were known to be scheduled.
A prolonged strike against GM could be painful for both sides, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor.
Shutting down North American production costs GM about $400 million a day, said Dziczek. It’s also a big sacrifice for UAW workers, who get only $250 a week in strike wages, she noted. The union had $721 million in its strike fund in 2018 and temporarily increased dues in March this year to boost it to $850 million.
GM has 90-100 days of inventory for most of the vehicles that are in high demand, Dziczek said. Consumers might find it harder to get certain colors or trims after a couple of weeks, but dealers trade with each other and that will help.
“GM has enough inventory for a short strike of one or two weeks. After that it starts to get painful,” said Dziczek.
The strike announcement followed a meeting Sunday morning of GM union local presidents from around the country, gathering in a Marriott hotel in the same building as GM’s Detroit headquarters. The UAW said the nearly 175 union local leaders on the National Council voted unanimously to strike.
“We are standing up for our members and for the fundamental rights of working-class people of this nation,” Terry Dittes, vice president for the UAW General Motors Department, said. “Going into the bargaining season, our members have been very clear of what they will and will not accept in this contract.”
When GM faced bankruptcy 10 years ago, said Dittes, “our membership and the American taxpayer stood up and made the hard choices and sacrifices for this company.”
He said union members have continued to build quality products that have led to big GM profits, so it is time for GM to step up.
GM CONTRACT OFFER
GM said its offer to the UAW included more than $7 billion in U.S. investments over the four-year life of a new deal, more than 5,400 jobs, higher pay and what the company said would be improved benefits.
“We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight,” the company said Sunday. “We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business.”
The company said it offered improved profit sharing; what it called “solutions for unallocated assembly plants in Michigan and Ohio”; a ratification payment of $8,000 and was enabling the union to “retain nationally leading health care benefits.”
“Unallocated assembly plants” refers to GM’s decision announced last fall that it would indefinitely idle four of its U.S. plants. The UAW vowed to leave no stone unturned in fighting to get new vehicles to build in those plants, which include Lordstown Assembly in Ohio, Detroit-Hamtramck and transmission plants in Warren, Michigan, and Baltimore.
Health care is a key point in the talks. GM and Ford each spend more than $1 billion a year on health coverage. The average UAW worker pays about 3% of his or her health care costs compared with 28% paid by the average U.S. worker, research by the Ann Arbor-based Center for Automotive Research shows.
Autoworkers argue that their jobs are physically taxing and can lead to chronic injury early in life, so the health coverage is essential.
Dziczek said what GM disclosed about its offer leaves questions.
GM’s description of its offer did not reference a path to making temporary workers permanent or closing the in-progression gap for workers hired at a lower wage after 2007. “Those are some pretty significant issues,” Dziczek said.
Harley Shaiken, a labor scholar at the University of California, Berkeley, said a national strike makes the point that the UAW is serious about unresolved issues and it puts “the ball in GM’s court” to resolve it. But GM’s move to outline what it’s offered the UAW is unprecedented, Shaiken said.
“GM is making a highly risky move by putting out a statement that detailed,” Shaiken said. “It means they are going to the UAW members rather than discussing it with the leadership.”
In its statement, GM said it has proposed an introduction of new electric trucks and the creation of the first “union-represented battery cell manufacturing site” in the United States.
“If GM is able to put electric trucks in Detroit-Hamtramck and a new battery facility in Lordstown, why not discuss that with the UAW last November when the unallocation statement came out?” Shaiken asked.
Dziczek said GM has a broader audience than just the UAW. It now stretches to the public, GM’s investors and even the president, who has been critical of the company over the factory cuts and its footprint in China, and who promised to boost auto jobs.
UAW National Bargaining Committee Chairman Ted Krumm said, “Today I represent tens of thousands of UAW members who are sacrificing their comfort and future to stand up and do what’s right.
“I want to be clear about something. This strike is about us, about standing up for fair wages, for affordable quality health care and for job security. We’re standing up for our temporary employee brothers and sisters who do the same work but for less pay. These are profitable times, we worked hard to make this company profitable and we deserve a fair contract because we helped make this company what it is.”
Temporary workers account for about 7% of the GM workforce through the year and are paid $15 an hour, roughly half the $28-$33 per hour for a legacy worker. “In-progression” workers, who have a path to higher pay, start at about $17 an hour.
GM reported that it made $11.8 billion in pretax profits in 2018, down 8.3% from 2017. CEO Barra’s total compensation was $21.87 million, about 281 times as much as the median GM worker’s compensation, company disclosures showed.
UAW-represented janitors who work for contractor Aramark at five GM plants in Michigan and Ohio went on strike at midnight Saturday after the UAW ended a contract extension in effect since March 2018. Autoworkers crossed the janitors’ picket lines at Flint Assembly on Sunday morning as they awaited word from the Detroit meeting.
As the local leaders met, a few rank-and-file workers rallied outside in front of GM’s headquarters.
“I’m here to show support for all GM UAW membership,” said Frank Hammer, a retired president of Local 909 for GM’s Warren plant. “This will be a momentous decision if we want to strike, but it’s important for the industry and for contract bargaining.”
Hammer said it was “deplorable” that the UAW told GM union members to cross the picket line of Aramark-employed maintenance workers. Autoworkers reported for their 7 a.m. shift Sunday at Flint Assembly, which makes Chevrolet Silverado and GMC Sierra pickups.
“The cardinal principle of our union is we don’t cross the picket line,” said Hammer.
Hammer said GM must end the two-tier wage system and find a way to help temporary workers become permanent, among other things.
Daniel Rider, who works at Romulus Engine plant and was at the protest, said he was surprised to hear the UAW was calling for a strike.
“But I’m relieved that they called it and I’m ready to walk the picket line,” said Rider.
His assigned strike time is Friday 2:30 to 6:30 p.m. he said, but he plans to be there Sunday night and Monday to support his union “brothers and sisters.”
He said UAW leaders have not given membership any indication of what is on the table or where the impasse lies. He said if GM is offering union workers added jobs and wages along with additional health care benefits as GM said it is in a media statement, Rider said, “then why are we all going on strike? That sounds like all the things we wanted. But they must be far apart on how to achieve those things.”
The UAW, which represents nearly 150,000 hourly workers at GM, Ford and Fiat Chrysler Automobiles, chose to negotiate a new contract first with GM. That deal will serve as a template for the UAW’s later talks with the other two.
The talks are playing out as the federal corruption investigation that started with FCA-UAW training center misspending now touches the highest levels of the union. Charges against regional director Vance Pearson implicated UAW President Gary Jones and immediate past President Dennis Williams in the misuse of union money.
The union negotiates a new contract with the automakers every four years. In 2015 the UAW chose to lead with FCA. If the UAW leadership believes it must strike, members at all three companies have voted to authorize one.
Ford declined comment on the strike announcement. FCA said bargaining with UAW was expected to continue under the extension agreement signed Friday.
“Over the past 10 years, we have demonstrated our commitment to growing our U.S. manufacturing base by investing more than $14 billion, and creating nearly 30,000 production and salaried jobs to support those operations. We continue to work toward our plan of adding another 6,400 production jobs,” FCA said.
The UAW’s rank and file want a base wage increase. They also seek to protect benefits and to narrow the wage gap between workers hired after 2007 compared with those who’ve worked at GM before 2007. They also want to establish a plan for temporary employees to go permanent, among other things.
But job security is critical, too, given GM’s November 2018 announcement that it would idle four U.S. plants. Detroit-Hamtramck is the only one continuing to operate, but GM plans to shut it down in January. GM is restructuring, having trimmed 4,000 white-collar jobs in addition to the factories it targeted to idle, which also included Oshawa Assembly in Ontario, Canada. It anticipates a slowdown in auto sales, which set a record in 2017, and like other automakers, is investing in autonomous and electric technology, the former to capture a share of what is expected to be a hugely lucrative business and the latter largely because of Chinese and European requirements.
For its part, GM and other automakers seek to control costs amid trade and tariff uncertainties, unclear fuel economy standards and a predicted economic downturn on the horizon that could hurt sales. Health care costs are some of the highest for automakers and that also remains an issue.