“Yes, the strike’s on…

…..and I didn’t get this size on $12.50 an hour, kid”

UAW strike Here’s the big writeup from Automotive News:

The UAW called a strike against General Motors at 11 a.m. today after UAW President Ron Gettelfinger determined it was time to “draw the line” on GM’s bargaining positions.

Gettelfinger said during an afternoon press conference in Detroit that negotiations would continue today.

“From our standpoint we’re ready to go in and wrap this strike up and conclude these negotiations,” he said.

“This is very serious, but there’s not a single person here who wanted this to result in a strike. There comes a time when you have to draw the line. We were pushed into a strike and that’s where we’re at.”

The UAW said it set the strike deadline over the “failure of GM to address job security and other mandatory issues of bargaining.”

Gettelfinger, in his first public comments since negotiations commenced, said the UAW has favored a health care trust fund for UAW retirees. In fact, he said the UAW first proposed such a trust, known as a Voluntary Employee Beneficiary Association, during 2005 mid-contract talks.

“This strike is in no way about a VEBA,” Gettelfinger said, adding there has been no formal agreement reached about the trust fund.

Gettelfinger also told reporters he has not met directly with GM CEO Rick Wagoner since the opening day of negotiations.

The strike against GM includes about 73,000 UAW-represented employees throughout the United States. It is the first stoppage against GM since 1998, when a 54-day strike at parts-making operations in Flint, Mich., shut GM production nationally, costing the company more than $3 billion. The last full-fledged strike against all of GM was in 1970.

“We are disappointed in the UAW’s decision to call a national strike,” according to a statement released by GM this morning.

“The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company. We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors.

“We will continue focusing our efforts on reaching an agreement as soon as possible.”

The union began the strike after weeks of marathon bargaining. The previous four-year agreement expired at midnight Sept. 14 and has been extended hourly since.

The UAW also is bargaining on behalf of 190,000 hourly workers at GM, Ford Motor Co. and Chrysler LLC.

The UAW selected GM as its strike target on Sept. 13, one day before the four-year contract expired. Ford and Chrysler arranged with the UAW to extend their master labor agreements as they try to agree on a new contract.

GM stock, meanwhile, rose as much as 3 percent in early trading today. But as of 12:38 p.m. EDT, the shares were up only 44 cents, or 1.3 percent, to $35.35 a share.

The UAW set the 11 a.m. strike deadline after a generally optimistic tone prevailed over negotiations all weekend. GM and UAW will continue to negotiate until the strike deadline.

‘EXTRAORDINARY EFFORTS’

Gettelfinger says his membership has answered the call for GM.

“Since 2003, our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement. In every case, our members went the extra mile to find reasonable solutions.”

Chris “Tiny” Sherwood, president of UAW Local 652 in Lansing, Mich., told Reuters the union’s leadership had told him to be prepared to send workers out on picket lines today unless a deal is reached in the meantime.

“They told me to walk them at 11 a.m. unless I hear otherwise,” Sherwood said.

GM and UAW negotiators had agreed during the weekend to the broad terms of a deal that would reduce GM’s nearly $5 billion annual health-care bill, people briefed on the talks said.

Under that plan, widely considered the central issue in the complex talks, GM would shift responsibility for retiree health care to a new UAW-aligned trust fund.

Wall Street analysts have said such a step could cut GM’s annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.

HEALTH CARE VS. JOBS

But for the UAW, any deal on health care needs assurances of job security.

Employees at GM assembly plants in Lordstown, Ohio; Spring Hill, Tenn.; and Kansas City, Kan., want Gettelfinger to secure new vehicles to replace vehicles they are losing or have lost.

“That’s the deal-breaker as far as I’m concerned,” Sherwood told Automotive News last week. His local represents about 3,000 workers at GM’s Grand River plant in Lansing.

GM will make its investment decisions based on the kind of deal that UAW workers ultimately ratify, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor. Those investments could reach $5 billion in the coming years, he said.

Lordstown wants a small-car replacement for the Chevrolet Cobalt. But the replacement could go to Mexico if GM can’t get cost-saving work rules and cost reductions from the master agreement that help dramatically close a $20- to $30-an-hour labor cost gap with GM’s Japanese competitors, he said.

Creation of a retiree health care trust fund, known as a vVoluntary employee beneficiary association, would get GM about halfway to that goal, Cole said.

The outcome of the contract talks is seen as crucial to efforts by the three Detroit-based automakers — GM, Ford Motor Co. and Chrysler LLC — to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.

GM, Ford and Chrysler are seeking concessions from the UAW to close a labor cost gap with Toyota Motor Corp. and other Japanese automakers operating in the United States.

Most analysts have seen a strike as a remote risk because of the weakened position of GM, which has cut 34,000 blue-collar workers from its payrolls and announced plans to shutter a dozen factories by next year.

“A token strike is possible, but we suspect the primarily motivation of the strike announcement … may be to pressure GM to finalize lingering issues in the contract,” JP Morgan analyst Himanshu Patel said in a note for clients issued on Monday.

“The fact that the UAW-GM talks have continued for so long past expiration is a broadly encouraging sign … It suggests GM is fighting hard, but it may also signal that the UAW may not have many other viable options on its hands,” he said.

——

Thanks to Ted S

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13 Comments

  1. Oops, sorry. I should’ve previewed that last comment. That should have been a hyperlink under “ABG”, but apparently I screwed it up…

  2. Let me try that again:

    According to ABG:
    “For now, GM will be OK. The company has a 67-day supply of most of its cars (at the current sales rate), although some of the more popular vehicles will only be available for the next 26 days if everything continues as it is now.”

  3. I’m trying to figure out the reasoning behind the strike on the UAW’s part. Is it a tactic on the union management’s part to look tough to their members before swallowing some health care concessions? Gather sympathy from the public (not working so far from what I’ve seen)? The sentiment on the Autoblog posting I read was going pretty strongly against the UAW.

    As ’85 Gripen notes above, the strike won’t hurt GM until they start running out of popular models in about 30-60 days. Until then, GM gets to quit paying the strikers, which saves them money.

    It will be interesting to see what happens.

    As an interesting side note, I spent my Saturday with my wife while she bought a Mazda CX-7 SUV to replace her Jag X type that is coming off lease. We both grew up as loyal GM people, but not any more. As close as I get is buying a Saab, although I still lust after 60’s GM muscle cars, and of course, Corvettes.

  4. I can sympathize with the Unions in todays capitalistic world….

    We’ve gotten to the point where the companies only care about profit margins, regardless of rather or not the employees are taken care of… and it’s to the point where if the customer isn’t sold something they don’t need/want, or at least pitched 3 times at minimum, then the company finds a way to make this evil come about.

    On the hand of the General’s current struggles, I can most definitely see how the Union is not needed.

  5. Total BS. Line workers are already overpaid, and the strike will hurt the families of the strikers more than it will hurt GM.

    Normally, I side with unions (as I’m a tad liberal), but whenever line workers complain about how terrible their jobs are, it just pisses me off.

    I’m not saying any more about this topic.

  6. Jeff – well said. Clearly they think they can do better..well then, go find a better job. The BIG 3 are hurting VERY badly right now.

    Don’t bite the hand that feeds you or puts food on your family’s table.

  7. Unions are no longer needed, Jeff is right in that line workers are overpaid…and they wonder why the Japanese car companies that run open shops in the US do so much better…I say move all the plants to Mexico and see what the UAW says…

  8. I saw a bit on the news which showed a picket line at a local parts distribution plant and they interviewed one of the picketers who expressed great concern about losing jobs and needing job security.

    IMHO, the reason they are losing their jobs is that for quite some time the unions became so powerful as to make salary and benefits concessions from the auto manufacturers so onerous (through tactics which can arguably be called “blackmail”) that the companies have no other option but to lay-off workers and move their jobs out of the country to remain competitive. Why wouldn’t GM move jobs to Mexico where they can actually make cars they can sell for a profit?

    The unions are directly responsible for the situation they find themselves in. If they were to agree to sensible salaries and benefits there would be no need for GM to move jobs overseas.

    And my goodness, I wonder about the validity of stereotypes about “fat Americans” when I see these picket lines on television… 😉

  9. Well, since I live only 20 miles from the Spring Hill, Tennessee plant, I’ve heard more than my share of this thing.

    You are all on the money, as far as I know.

    One of the things that frosts me about this whole deal is that they are demanding privilege that others will never have. Job security is a myth. There are no guaranteed jobs. Period.

    Believe me, being in the tech business, I’ve got the opposite situation — the more that companies can outsource, the more the numbers look better! So, companies actively look for ways to get rid of people!

    ctm — Sweden has the same issues, it’s just that the government choses to tax everything enough to make it a national issue, not a corporate issue.

  10. My father-in-law just lost his job last week after 25+ years as a mechanic for a trucking company.

    It sux, but it happens. People get so comfortable in their jobs they forget it’s a privilege to have one.

  11. Joe,

    I’m sorry to hear that. I’m an as close to a job-for-life situation as you get here in Oz, but I still know that it could be reorganised at any time.

    Eggs nailed it: Job security is a myth. Especially in the 21st century.

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