General Motors Co. workers called their first strike in 12 years, halting work at dozens of facilities across the U.S. in a clash over jobs, pay and benefits.
The United Auto Workers called the strike — which began midnight Sunday — despite a deadline-day offer by GM for pay raises, $7 billion of investment in eight U.S. plants and more than 5,400 additional jobs, most of which would be new hires. The union said GM’s proposal fell short in key areas including health care, use of temporary workers and the length of time it takes for shorter-tenured members to get to top-scale pay.
“The union is playing some hardball. It seems they are pretty far apart,” said Kristin Dziczek, vice president of the labor and economics group at the Center for Automotive Research. GM’s offer “still doesn’t address some of the union’s demands.”
Lost production may cost GM about $50 million a day in earnings before interest and taxes, Dan Levy, an analyst at Credit Suisse, wrote to clients.
The union is seeking pay raises for entry-level workers, who currently start at less than $20 an hour, and to get them to the peak wage of almost $30 an hour in three or four years, instead of the current period of eight years. UAW leaders also want GM to invest in U.S. plants and possibly build new vehicles or powertrains in some of the four factories that currently have no future products to produce.
“Going into bargaining season, our members have been very clear about what they will and will not accept from this contract,” UAW Vice President Terry Dittes said at a press conference on Sunday. “We are standing up for wages, affordable health care and our share of the profits. We are standing up for job security for our members.”
Dittes also said that the union wants to curb GM’s use of temporary workers and give them a path to permanent, full-time employment.
GM countered that it made the union a generous offer to invest in eight factories in four states, including a new vehicle in the Detroit-Hamtramck sedan plant that had been slated to end production in January.
In Lordstown, Ohio, where GM has idled the factory that once had three shifts of workers making Chevrolet Cruze compact cars, the automaker plans to set up the first union-represented electric-car battery plant in the U.S. There are also four electric trucks coming that other UAW plants will build.
GM also offered workers a signing bonus of $8,000 per member if they ratify the deal, plus wage gains or lump-sum payments in all four years of the contract. The carmaker says it’s offering to keep members’ health-care contributions the same as in the current contract.
“What GM is doing is highly unusual,” said Harley Shaiken, labor professor at the University of California at Berkeley. “It’s going over the head of the UAW leadership and seeking to address the members and the public more generally. That is a highly risky strategy. It tends to galvanize the membership in support of the leadership and complicates an already tough situation.”
Before the two sides held talks over the weekend, union leaders were distracted by federal corruption charges against UAW leaders, including the union’s president, Gary Jones. The UAW’s executive board met on Friday and discussed whether to remove Jones as president. He has kept his job, a union spokesman said.
Jones didn’t attend the press conference but was quoted in the union’s press release about the strike.
“We told UAW GM members that we would stand up for them and their future,” Jones said in the statement.
The walkout will be just the second national work stoppage at GM since a 67-day strike in 1970. GM did have a 54-day strike at a key plant in Flint, Michigan, in 1998 that effectively shut down most of its assembly plants.
The impact of the latest strike on the U.S. economy will be negligible compared with 49 years ago, when the 400,000 workers GM employed at the time represented about 1.2% of the national payroll. The automaker now has about one-tenth the number of union-represented U.S. employees.
Any deal the UAW reaches with GM would set a precedent for the jobs, wages, benefits that the union demands from Ford Motor Co. and Fiat Chrysler Automobiles NV. The union hasn’t said which carmaker it will target next for bargaining over a new contract.
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