The elephant in the corner of the room just farted

This hasn’t been spoken of for a while, but it’s one of those situations where a part of the system sneezes and the rest of the system is quite likely to catch a cold. Wow – two metaphors in the one post!

This just in from Automotive News via email:

UAW President Ron Gettelfinger told General Motors local representatives late this afternoon that GM is the lead company of negotiations and that the locals should prepare for a strike, if necessary, a source familiar with the talks said.

The union traditionally selects a strike target during contract talks, then negotiates a deal with that automaker first. That agreement is then used as the pattern for contracts with the other automakers.

This is primarily a US thing, but a major strike there is going to make for some serious production and cashflow issues for GM and that will definitely have a worldwide kick.

The current agreement with the UAW, a four-year deal, expires at the end of Friday September 14. That’s today in my part of the world, though there’s still a little more time left before it reaches zero-hour in Michigan.

Stay tuned.

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6 Comments

  1. I bet GM holds their ground. It’s all going to come down to health care, and when push comes to shove, GMs got the money, not the employees.

    Anyone remember the Sikorsky Aircraft strike?

    It sickens me when these workers with only a high school degree make over 100k a year while teachers with a Master’s Degree make 40-50k a year. Not that there is anything wrong with hard work, but let’s get our priorities straight people.

    Stick to your guns GM.

  2. The UAW just needs to accept that GM is now a global company and if they want to keep jobs and production in the USA they had better get with the program.

    But hey – let’s look on the bright side, at least if they strike and cripple GM right now they won’t have to worry about negations again in three years. Most of them simply won’t have jobs.

  3. joemama – on healthcare, isn’t putting control of a healthcare trust fund in the union’s hands exactly what GM proposed?

    From CNNmoney:
    “The companies would like to set up union-controlled trust funds to assume the responsibility of those health care costs going forward. They have proposed putting a combination of cash, stock and debt into those funds to cover the costs, although the funds would likely start out with a discount to the estimated $100 billion liability.”

    Seems like GM was selected as the lead because it has the best finances of the Big Three. And if there is a strike the headquarters will be at – you guessed it – a Cadillac plant.

  4. @joemamma: Please keep two things in perspective…. If you choose a career path that requires a masters degree but only pays $40-50K a year and you are disappointed with your salary, maybe it is time to pick a new career path? Second, how long does it take a factory worker to get to the point that they make $100K per year???? I think you’ll find that GM’s typical factory wages are more in the $50-70K range on average. My father worked for GM for 47 years and even with 6 day weeks and 12 hours days, never made $100K in a year, EVER. My step-father was a skilled trades tinsmith and he worked for GM for 45 years and never made $100K in a year, EVER. However, if the product you are making sells for tens of thousands of dollars and has the potential to generate tons of profit for the manufacturer, why shouldn’t the employees be compensated with a higher wage?

    Now my grandfather worked for GM for 41 years and retired in the early 1970’s and died in the late 1980’s, but his wife received his GM pension and full health benifits until she passed away at the age of 101 in 2006. That is were the money goes! It is not the wages.

    On the other hand, public school teachers are paid from YOUR tax dollars, so please be ready to open you pocket book to those local milage increases and property tax increase if your “priorities” need a bit of alignment.

    I can speak from experience on both as I was a GM factory worker and I was a public university instructor. Now I work for the Federal Gov’t. Ironically ALL THREE groups have unions, so keep that in mind as well. It’s not just the “workers with only a high school degree”. Those folks with master’s and PHDs like their unions too. Not sure what’s up with the Feds since they can’t actually strike.

  5. Steven – I’n not trying to trivialize factory workers at all. I’m just pointing out that many of them make great money without formalized education.

    This is not to say they are not respected or an integral part of GMs business. I think CEOs of companies are overpaid as well.

    If a company is making money, why not spread it around. But last I knew GM wasn’t doing too well. It works both ways – if you want workers to get a cut when business is good, then can GM take back when things are bad? Do you think workers would allow that?

    I can understand where you are coming from with your relatives working at GM before, but that was a long time ago so of course they never made 100k. I do see your point about the pension – maybe it’s not the wages that are the problem, but the health care and retirement.

    As far as my taxes going up because of education, you don’t need to tell me. I live in Connecticut, where teachers are probably paid the highest out of anywhere in the country.

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