UAW walks out of GM negotiations; GM Union Workers Strike

[Ardentfrost]

Fight Over Jobs, Cost Cuts Spurs Walkout at GM - WSJ.com

Fight Over Jobs, Cost Cuts Spurs Walkout at GM

DETROIT -- Workers at General Motors Corp. walked out of factories across the U.S., exploding a nearly decadelong truce between the auto maker and its union.

The strike came as negotiations over a new national contract foundered on a big issue: whether the United Auto Workers, having made big concessions on health care, should get some kind of jobs guarantee from GM.

The union's membership has shriveled rapidly in recent years amid big buyouts, and it wants to stop the bleeding. "Globalization is killing us," said Jerry Gillespie, president of a UAW local in Warren, Mich., whose members work on engineering and design of future products. "They want to build engineering centers in the rest of the world and take that work away from us. That's our fight."

GM was resisting the UAW demand for jobs guarantees. The company's goal in the talks is to win a contract that would allow it to narrow or even eliminate the wage gap with Asian rivals. At stake is the long-term competitiveness -- some say survival -- of the unionized U.S. auto makers, as well as the future of a union that once led the way for organized labor in winning health-care benefits and retirement security.

It was the first UAW strike to hit GM since 1998, and the first strike over a national contract since 1970. Production at GM's more than 80 facilities in the U.S. shut down, idling 73,000 workers.

Investors generally took a sanguine view of the strike, believing that it was another step, albeit a theatrical one, in negotiations. Some cheered signs that GM management was taking a hard line. In 4 p.m. New York Stock Exchange composite trading, GM shares were down 20 cents, or 0.57%, to $34.74.

For now, GM has ample inventory of most of its key vehicles, although a prolonged strike could hamper introduction of important new models such as the Chevrolet Malibu. Because the strike isn't affecting other auto makers, car buyers will still have plenty of choices. UAW members make fewer than half of the cars sold in the U.S.

GM could lose $100 million a day due to the strike in the short run, analysts estimated. If the strike extends to a month and production is lost in Canada and Mexico, GM could burn up to $8 billion as end-of-the-month costs add to the tab, analysts said.

The Canadian Auto Workers union said it expected to stop work today at car plants in Oshawa, Ontario, and production at a Canadian truck factory could stop later in the week. The Teamsters union said its members wouldn't cross UAW picket lines to ship to dealers GM vehicles that have been produced and are sitting on factory lots. The strike will push at least 30,000 CAW and Teamster members off the job, as well as thousands of workers at parts companies that supply GM plants.

The clash could be short-lived. GM and UAW bargainers resumed talks yesterday afternoon. They recessed in the evening and planned to start again today. But the issues are challenging. GM wants control over its manufacturing investments -- including the right to move more production overseas. It also wants to be able to set lower wages and benefits for newly hired workers and more flexibility to shrink or expand the work force to meet demand.

The strike represents a stiff test for GM Chief Executive Rick Wagoner and his top lieutenant in the UAW negotiations, Chief Financial Officer Fritz Henderson. The strike in 1998 was costly for GM, and Mr. Wagoner has worked diligently to maintain peace with the UAW, even as he steadily brought down the number of UAW workers through attrition and buyouts. While quality and productivity improved, GM North America is still a money loser.

On the other side of the table, UAW President Ron Gettelfinger is under pressure from his members not to give away hard-won wages and benefits. Mr. Gettelfinger expressed frustration during a news conference yesterday that talks with GM management had been "one-way." He said the UAW didn't want a strike, but felt it was "pushed off a cliff" by GM.

Executives at the Big Three Detroit auto makers believe they're running out of time to make a major overhaul of costs. GM, Ford Motor Co. and Chrysler LLC have all lost money and market share in their U.S. operations during the past several years, although sales were decent and the economy was generally healthy. Now the housing slowdown is threatening to reduce demand for new cars. The debt of the Big Three is rated at junk levels.

[...]

I quoted about half of the article.

I don't know how many of you have been following these UAW negotiations with GM over the past weeks, but this is the exact shit that big unions should have seen coming for years. They have helped create a situation which prevents the companies they have by the balls competing as well as they should, and are now not only paying the price in GREATLY reduced union membership, but they're doing their best to still force the auto makers into submission.

This walk out is mostly symbolic, and probably won't hurt GM that much in the long run, but I think this attempt at throwing their remaining weight around is stupid. I know they can't bow to every GM want and expect to keep members, but if they piss GM off, they're likely to get less.

All the American auto makers are in trouble right now. They're trying to turn their shit around, starting to make more eco-friendly cars and appeal to more foreign buyers, but part of that has to be to greatly reduce cost. The UAW could end up driving more and more production overseas costing even more jobs, when they should be working to help GM and the other auto makers in keeping jobs over here.

I guess the only methods they know are strong-arm tactics and threats. I'd be happy to see the UAW completely fold, which would ring a warning chime to other nationalized unions that they need to change their tactics and focus else suffer the same fate.

[Publius]

This will negative impact our local economy because the GM plant in Arlington is at a complete shutdown due to this.

[6SpeedTA95]

The UAW bears primary responsibility for the issues the US automakers currently face. While the automakers were mismanaged for years, the fact remains the ridiculous associated with american autos are due to unions. Costs of building cars is substantially higher than any other mfg's due to UAW.

UAW is driving more US jobs out of the country and are adding to the jobs outsourcing. In the meantime many foreign companies are coming over here building auto plants that are NOT UAW, and they are highly profitible.

[Ardentfrost]

Originally Posted by 6SpeedTA95

The UAW bears primary responsibility for the issues the US automakers currently face. While the automakers were mismanaged for years, the fact remains the ridiculous associated with american autos are due to unions. Costs of building cars is substantially higher than any other mfg's due to UAW.

UAW is driving more US jobs out of the country and are adding to the jobs outsourcing. In the meantime many foreign companies are coming over here building auto plants that are NOT UAW, and they are highly profitible.

Certainly. Nissan, Toyota, etc... have all proven that auto-makers can be successful even with production being done in America. It really speaks to the problems in the american auto industry.

[WickedLou9]

They are going to put themselves out of work by killing the general.

[hsmith]

Originally Posted by WickedLou9

They are going to put themselves out of work by killing the general.

I don't get why these people can't figure it out.

Cut the fat and layoff 20% of the people so the other 80% can have jobs.

Or, go as is and 100% of people lose jobs.

hmm hard to figure

[abregar]

Does anyone know what the wages and benefits are at the Toyota and Nissan plants. Also from what I understand the union has made concessions in wages and benefits and is simply asking for a guranteed number of jobs to remain here in the US.

[WickedLou9]

Originally Posted by abregar

Does anyone know what the wages and benefits are at the Toyota and Nissan plants. Also from what I understand the union has made concessions in wages and benefits and is simply asking for a guranteed number of jobs to remain here in the US.

From what I understand, the japanese auto makers pay thier workers more than the union workers precisely so thier workers don't unionize. It has worked for the most part although there are some unionized toyota and honda workers. the UAW is always trying to recruit more people from the japanese manufacturers pool of workers.

They are simply asking for guranteed jobs? That's a pretty big request. They are asking GM to gurantee that they will roll out new product lines and build these cars in the US... even if it is a bad economic decision. They are essentially holding GM hostage and asking them to make bad business decisions or else the UAW will stop working altogether.

[Publius]

I've heard that the main thing the UAW is angry about is that GM is asking them to take on a portion of the $51 billion in pensions & retiree health care coverage that UAW members represent as costs to GM. So basically GM is asking the UAW to help pay for something that the UAW demanded from GM, and the UAW is balking at doing so.

[Ardentfrost]

There's a lot of stuff going on in the negotiations, and nothing is certain. According to the WSJ articles I've been reading over the past couple weeks, GM is trying to get the UAW to setup a trust to cover health care that both groups would then contribute to, but UAW would be responsible for. This would get GM off the hook for a lot of things, and rumor is that UAW isn't fighting this one too much.

As for the guaranteed jobs, that's supposedly what UAW walked out of negotiations about. GM can't really guarantee anything because a lot of their production has already shipped overseas and without an adjustment in the industry, more will continue to go. But, on the other hand, UAW needs SOMETHING to show to their members to say "look what we got you." Since they put guaranteed jobs on the table, if they can't get GM to agree to it (at least somewhat), then their members are NOT going to be happy. If GM won't agree to it, it makes it look like all their jobs could be forfeit at any time, when it's quite reasonable to predict that if negotiations go well allowing GM to lower costs of production, they'll have no reason to ship more jobs overseas.

It's a lot about perception. And with the below graph, you can see why UAW is grasping straws:

[abregar]

Originally Posted by WickedLou9

From what I understand, the japanese auto makers pay thier workers more than the union workers precisely so thier workers don't unionize. It has worked for the most part although there are some unionized toyota and honda workers. the UAW is always trying to recruit more people from the japanese manufacturers pool of workers.

They are simply asking for guranteed jobs? That's a pretty big request. They are asking GM to gurantee that they will roll out new product lines and build these cars in the US... even if it is a bad economic decision. They are essentially holding GM hostage and asking them to make bad business decisions or else the UAW will stop working altogether.

If the Japanese auto makers are paying higher wages than the UAW plants, then maybe they should take a look at how Toyota and Nissan do business in the US and make it profitable. Perhaps this downturn has nothing to do with the UAW and more to with how GM runs their operations? I think it would be interesting to find out if GM production lines produce more waste that the Japs.

[Publius]

Originally Posted by Ardentfrost

That's amazing, I had no idea their membership had declined that much and that rapidly.

The only bad thing is that the graph excludes retirees, and with the pension/retiree healthcare plan that the UAW pushed on GM, even as the membership declines at a speedy rate the UAW's drain on GM's money is probably staying steady or increasing with the increased cost of healthcare for older and older retirees.

[abregar]

Yeah the UAW ranks are dwindling. They lost in the neighborhood of 1500 here in Iowa alone. It is sad really to see this happen because there really is companies out there whose employees need the protection. One of their downfalls is they are also percieved as blindly following the Democratic Party and expect there membership to vote that way. Also these so-called "right to work" laws are a way to kill the unions by making them represent employees who don't pay anything for the services rendered.

[DosEquis]

Originally Posted by 6SpeedTA95

UAW is driving more US jobs out of the country and are adding to the jobs outsourcing. In the meantime many foreign companies are coming over here building auto plants that are NOT UAW, and they are highly profitible.

Part of the reason they are going on strike... to prevent that kind of shit from happening.

GM wants control over its manufacturing investments -- including the right to move more production overseas.

[Publius]

Originally Posted by DosEquis

Part of the reason they are going on strike... to prevent that kind of shit from happening.

and yet it is their own activities that cause it to happen. Irony at its finest.

[Ardentfrost]

Originally Posted by abregar

Yeah the UAW ranks are dwindling. They lost in the neighborhood of 1500 here in Iowa alone. It is sad really to see this happen because there really is companies out there whose employees need the protection. One of their downfalls is they are also percieved as blindly following the Democratic Party and expect there membership to vote that way. Also these so-called "right to work" laws are a way to kill the unions by making them represent employees who don't pay anything for the services rendered.

Why would a set of employees need protection? Protection from what? Protection from their jobs moving overseas? Protection from wages that are deemed "too low" by individuals and not the market?

I don't know what you're driving at.

[DosEquis]

Originally Posted by Publius

and yet it is their own activities that cause it to happen. Irony at its finest.

Actually to blame all of GM's troubles on the union is a bit of a stretch. Personally I think there is nothing wrong with workers organizing and doing some collective bargaining with their employer.

You simply can't ignore the trade policy with foreign countries and blame everything on people organizing. We allow auto makers to come here but they don't allow us to compete in their markets. Getting bent over on trade is a big part of our problem. They want plants in canada because they don't have to pay for medical benefits at those places. There is a variety of things that prevent GM from being competitive. They might pay a bit too much in some of their positions, but it is nothing compared to the hundreds of millions they lose because of other policies, either from our government or by foreign governments.

[WickedLou9]

Originally Posted by DosEquis

Actually to blame all of GM's troubles on the union is a bit of a stretch. Personally I think there is nothing wrong with workers organizing and doing some collective bargaining with their employer.

You simply can't ignore the trade policy with foreign countries and blame everything on people organizing. We allow auto makers to come here but they don't allow us to compete in their markets. Getting bent over on trade is a big part of our problem. They want plants in canada because they don't have to pay for medical benefits at those places. There is a variety of things that prevent GM from being competitive. They might pay a bit too much in some of their positions, but it is nothing compared to the hundreds of millions they lose because of other policies, either from our government or by foreign governments.

Yeah the blame is spread around that's for sure. Don;t overlook the importance of the market itself. GM was/is practically giving cars away. For a while they were taking a loss on every car they sold. Why? Because the market would not pay for thier product when there were better products available. The only way that they could compete was by pricing down all of thier products, offering employee pricing, 0% financing, etc. GM was hemmoraging money for a while there. They are still losing money in the US, but thier global operations have pushed them into the black. That in it self is pretty telling. Decadeds of worthless crappy unreliable cars did alot of damage to GM and really all of the American manufacturers. Their cars are better now but it takes a long time to rebuild an image even if the actual product has already been improved.

[Ardentfrost]

Originally Posted by DosEquis

Actually to blame all of GM's troubles on the union is a bit of a stretch. Personally I think there is nothing wrong with workers organizing and doing some collective bargaining with their employer.

You simply can't ignore the trade policy with foreign countries and blame everything on people organizing. We allow auto makers to come here but they don't allow us to compete in their markets. Getting bent over on trade is a big part of our problem. They want plants in canada because they don't have to pay for medical benefits at those places. There is a variety of things