GM strike: 'Some progress' in auto talks as layoffs hit suppliers

Breana Noble
The Detroit News

"Some progress" has been made during the negotiations between the United Auto Workers and General Motors Co., UAW Vice President Terry Dittes said in a letter to union local leadership on Thursday, day four of a national strike against the automaker.

But Dittes, director of the UAW GM department, said "there are still many of our memberships' issues that remain unresolved."

More: Everything you need to know about the UAW strike and corruption scandal

Meetings will continue into the weekend "and beyond" if a tentative agreement is not reached, Dittes wrote. 

UAW member Sonya Gaines, an eight-year employee at the GM Detroit-Hamtramck assembly plant, walks the picket line with other strikers Thursday morning.

"This strike is for all the right reasons: to raise the standard of living for our members and their families and for workers across this country, to achieve true job security, our fair share of the profits, affordable health care and a path to permanent seniority for temporary members," he wrote. 

Marick Masters, professor of business and former director of labor studies at Wayne State University, believes there's still "a considerable distance between the two parties" after reading the letter.

"It’s disappointing they haven’t made more progress," he said. "These are tough issues and tough times."

The impact of the strikes has started to hit automotive suppliers. 

Auburn Hills-based Nexteer Automotive said it will have to temporarily reduce its workforce in the coming days because GM plants are shut down and do not need Nexteer's components. Nexteer didn’t immediately specify how many employees will be affected. 

“We will continue to monitor the situation and update our employees as we learn more,” said Dennis Hoeg, Nexteer vice president and North America Division president. “Our goal is to return to full production as quickly as possible.”

The company supplies electric and hydraulic power steering systems, steering columns and driveline systems. Its customers include the Detroit Three automakers and foreign producers. 

Automotive suppliers Continental AG and Denso International America Inc. were both continuing to monitor the situation. The impact on suppliers depends on the length of the strike.

“We remain hopeful that both sides will find a quick and agreeable resolution. As always, we will adjust our production schedules based on customer release schedules," Andrew Rickerman, senior regional public relations specialist at Denso, said in a statement to The Detroit News.

UAW member Mark Yaklin walks the picket line Thursday outside the GM Detroit-Hamtramck assembly plant.

Suppliers already are looking to rebalance their plant workloads to concentrate on other customers if possible, and those supplying GM almost exclusively are "likely to curtail production," Julie A. Fream, head of the Original Equipment Suppliers Association, said in an email.

By Friday, day five of the strike, the "vast majority of North American supplier plants shipping product to GM will need to adjust their production schedules," she said.

Timothy Bax learned he was laid off indefinitely from The Woodbridge Group’s Lansing facility when he showed up for work Monday. He makes tail lights for Camaros at the automotive supplier.

“I just want people to realize the scope of how bad this really is,” said Bax, 31, of Lansing who has worked at Woodbridge for more than three years and makes $15.50, less than the $15.78 starting wage of a new temporary worker at GM. “It’s more than just them. It’s affecting all these other lives, too. They need to do the right thing and come to a deal, and it needs to be reasonable for both parties.”

Bax can collect unemployment, though after 10 days, he will have to prove he is looking for a job — and this strike might be the tipping point for him to do that, he said.

“I’m trying to get into a new line of work because of it,” said Bax, who has two children,ages 5 and 7. “We have layoffs twice a year, and now with the strike — I need to have something more consistent for my family to make ends meet.”

Eddie Mendoza, an employee at the Hamtramck plant and Local 22, walks the picket line.

GM Canada said Wednesday it will temporarily lay off 1,200 employees at its Oshawa Assembly Plant in Ontario because some of the components to build trucks there are unavailable due to the walkout. Canadian auto workers are represented by a different labor union and are not striking.

The News reported Wednesday that the strike has started to affect at least one local trucking company. Dearborn-based Phoenix Transit and Logistics trucking company was told deliveries to GM plants have been halted through at least Sunday. Parts can't be unloaded at the plants while employees are on strike — and striking UAW members haven't been keen to allow delivery vehicles and others access to the plants.

Negotiators for the union and GM are working through differences on wages, health care and seniority for temporary employees, among other issues.

Health care will be difficult for the two to work through because Masters said the union "will fight tooth and nail" to keep their health care benefits.

"If the line is being drawn in the sand over health care, that becomes a tough one to fix," Masters said. "Then it becomes a test of wills of which side is going to hold out the longest." 

Ford Motor Co.’s UAW employees pay zero dollars in deductibles and monthly premiums. Their total contribution is 3% of all health-care costs compared to 33% in the greater auto and transportation sector. Workers' contributions at Fiat Chrysler Automobiles NV and GM are similar.

After GM stopped paying for health care insurance for workers on strike, the union is picking up the tab. Benefits for medical and prescription costs have started kicking in for some. Chad Spencely, a 45-year-old Adrian processing technician at GM’s Ypsilanti customer care and distribution center, said he was able to pick up a prescription on Wednesday.

Health-care costs are the largest concern for Kornelia Cooper, 28, of Detroit. She is an in-progression employee at GM after starting at the Ypsilanti distribution center in 2014. She has three boys, with a fourth child due in February.

“This job is heavy on your body, especially on women’s,” Cooper said Thursday. “I feel like I’ve added 10, 15 years onto my body since I started. We do the work, they should pay for the costs.”

In a statement GM made public Sunday after the announced strike, it said its offer to the UAW would “retain nationally-leading health care benefits” and provide new coverage for autism therapy, chiropractic care and allergy testing.

Also at the Ypsilanti center, Neal Kesterson held a strike sign over his shoulder. The 65-year-old Maybee electrician said this is his way of passing it forward for his father and the UAW members before him who striked and fought for higher wages, health care and other benefits from which he has benefitted.

“This is not for me,” said Kesterson, who has worked for the automaker for almost 37 years and earns about $34 per hour. “I’m good. I have what I need. This is for the young guys who are making $15, $16 per hour. Can you live and feed a family off that?”

The first strike against GM in more than a decade poses an “outsized economic threat” to the state of Michigan and local governments where GM has plants such as Detroit, Flint and Lansing, credit reporting agency Moody’s Investors Services said Thursday.

The credit negative impact depends on how long GM’s facilities remain offline, though final terms of the eventual deal between GM and the UAW members also could benefit the state and those communities, wrote Ted Hampton, vice president and senior credit officer.

If the strike drags on for many weeks, Michigan fiscal officials estimate total state tax withholdings will be reduced by up to $4.6 million per week, including estimated effects on other businesses, Hampton said. Sales tax revenue, they said, also is at risk of declining, though Hampton said state officials do not anticipate a notable budgetary impact.

GM plants in Michigan account for about one-third of the company’s U.S. factory headcount, according to Moody’s. Roughly 46,000 hourly workers are on strike. The auto sector accounts for 7% of Michigan’s private-sector wage and salary income compared with less than 2% nationally.

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