GM strike, Day 2: Little progress reported in talks as production losses top 15,000
General Motors Co. will have lost production of more than 15,000 vehicles by Tuesday night due to a national strike by the United Auto Workers union, according to one analysis. That number could approach 43,000 vehicles after a week.
Meantime, collective bargaining subcommittees for General Motors Co. and the United Auto Workers continued to meet Tuesday as a national strike of GM stretched into its second day with no significant progress reported.
UAW spokesman Brian Rothenberg said Tuesday that talks were ongoing. He was unable to report if progress has been made.
Union leadership had spent the previous morning visiting picket lines around Michigan to show solidarity with the rank-and-file members. The strike of 55 GM facilities that started late Sunday night costs the automaker roughly $50 million per day.
Troy-based industry analysis company LMC Automotive U.S. Inc. said a strike of GM's U.S. assembly plants alone would cost the automaker 7,700 of lost production production per day, and 43,500 if the strike were to last a week.
But the UAW is also striking GM's U.S. powertrain and parts plants, meaning engines and other components are not getting to plants in Canada and Mexico, where workers are not striking. LMC did not provide an estimate of how badly production might be hindered in those countries due to supply chain problems.
Workers also will begin feeling financial strain. Strike pay for rank-and-file members is $250 per week, and workers would not get their first checks until a week after they file for their first 40 hours of strike pay.
Union employees are not covered by GM health care benefits while on strike. But the UAW covers medical and prescription health care costs through the union's strike fund, or the fund will make payments to the company's health plan in accordance with the Consolidated Omnibus Budget Reconciliation Act (COBRA), Terry Dittes, UAW vice president and GM department director, said in a letter Tuesday to local union leaders.
COBRA requires employer-sponsored health plans to offer the option of temporarily continuing health care coverage to individuals who would otherwise lose their benefits due to voluntary or involuntary termination of employment or a reduction in hours, according to the U.S. Labor Department.
"The company stops paying, and the union starts paying," explained Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor. "When the union walks off the job, now health care is the responsibility of the union."
Dittes said he received a letter Tuesday from GM confirming it no longer was paying for striking employees' health care coverage. Dittes claimed the company "cut-off" coverage.
"This answer provided by GM, today, will be reviewed by UAW Legal to see if any further action is required," Dittes said.
GM said some benefits now are being funded by the union.
"We understand strikes are difficult and disruptive to families," GM said in a statement. "While on strike, some benefits shift to being funded by the union’s strike fund, and in this case hourly employees are eligible for union-paid COBRA so their health care benefits can continue."
After a Politico story claimed Tuesday that the Trump administration was intervening in the strike, a White House spokesman quickly moved to say that the administration is not involved with negotiations. GM also said the White House was not involved.
President Donald Trump had been asked Monday about intervention. He said federal mediation is "always possible, if that's what they want."
UAW Region 1A Director Chuck Browning said Monday on MSNBC that the UAW doesn't know how long it will take to reach a tentative agreement with GM. He said the union and the automaker are "far apart" on the largest issues of the contract such as wage increases, healthcare and the use of temporary workers in plants around the country.
"It'll go on as long as it's going to take to achieve our bargaining goals," Browning said.
GM has the largest inventory of any auto manufacturer in the U.S., according to LMC Automotive. The automaker had 800,000 units of inventory as of Sept. 1, which is roughly a 77-day supply. But it had a 93-day supply of the Silverado pickup truck, and an 84-day supply of the GMC Sierra.
LMC notes the UAW strike on GM in 1998 lasted 54 days. It cost the automaker $2 billion, or $3.1 billion adjusted for inflation. That would have been more than a third of the automaker's 2018 net profit.
After the union called for its members to strike, GM on Sunday released details of what was offered to the UAW. One of the offers was the introduction of electric trucks, which The Detroit News reported would be made at Detroit-Hamtramck Assembly, one of four U.S. plants that were "unallocated" of vehicles by GM last fall. The automaker also offered to stagger base wage increases and lump sum payments, alternating between the two every year for four years.
Picketers at Detroit-Hamtramck were energetic on day two of the strike. Early Tuesday afternoon, they cheered loudly, raising their fists as passing cars honked their horns in support of UAW Local 22 members. Supporters dropped off pizza, doughnuts and water.
"I think the mood out here is strong," said John Hatline, a 45-year GM employee and member of the Local 22. "We are here until the end. We are here until it gets resolved. However long that takes."
Hatline, 64, has been through strikes before, but this one feels different. The last ones felt like they would end quickly. That’s not the case this time.
"We have been preparing for over a year because we knew that General Motors wasn’t going to budge from their position too much," Hatline said.
Hatline has felt the strike was coming for the last few months partly because of how angry members were when GM decided to “unallocate” the plant. It was to continue producing the Chevrolet Impala and Cadillac CT6 until January.
"At that point it’s like they threw down the gauntlet against the union," he said. "They broke our contract."
The expired 2015 contract between the UAW and GM stipulated that the company could not close or idle plants. Instead of idling the plants, GM said they were “unallocated,” or not slated to receive product.
Local 22 President Wiley Turnage said his members just want a fair agreement that includes making temporary employees permanent. Wages and health care are also a concern for Turnage and the rest of the UAW membership.
His members were feeling good Tuesday, he said, but he hopes the strike doesn’t last long and GM and the UAW can come to an agreement soon “for the membership’s sake.”
"You have to do what you have to do because we feel we should have a fair agreement," he said. "They have made a lot of money, so we want them to do right by us."