GM strike, day 23: Wages, job security are focuses in talks

Breana Noble Daniel Howes
The Detroit News

General Motors Co. and the United Auto Workers are focusing on core economic issues in their labor talks, two sources with knowledge of the talks told The Detroit News, with both sides exchanging proposals within the last 24 hours.

General Motors' Flint Assembly Plant employees line the street with picket signs in Flint on Monday.

Wage increases, bonuses and job security remain points of disagreement, said one person familiar with the situation. Those are among the most pressing concerns for UAW members on the picket lines, especially after GM last November identified four U.S. plants for closure as it moves to reduce costly excess production capacity.

The union wants base wage increases in each of the four years of a new agreement for all permanent employees instead of lump-sum bonuses in two of the years, said the person, who was not authorized to speak publicly on the talks. Job security assurances remain contentious, as GM seeks flexibility to manage a slowing market and the move to electrification while the union presses for more certainty.

In a letter to local union presidents and chairpersons sent on Monday, UAW Vice President Terry Dittes wrote that the union is "very concerned about the issue of job security. Job security impacts you, your families and the communities where we live and work."

"We have made it clear that there is no security for us when GM products are made in other countries for the purpose of selling them here in the U.S.A.," Dittes wrote. "We believe that the vehicles GM sells here should be built here. We don't understand GM's opposition to this proposition."

GM has 33 manufacturing sites in the U.S. compared to four manufacturing sites in Mexico. GM has 16,000 hourly employees in Mexico compared and 46,000 in the U.S.

The parties have agreed to health insurance benefits and a clear pathway for temporary employees to become full hires after having made "good progress" on Friday Dittes said in a letter to local union leaders. By Sunday, talks had taken a "turn for the worse," he said, over issues including wages and job security.

Under the now-expired contract, top-paid production employees were paid $30.64 per hour. New permanent hires, called "in-progression" in industry jargon, started at $17 per hour, and it took eight years to reach the top of the pay scale.

When the UAW said on Sept. 15 that its members at GM would go on strike, GM revealed details of the offer it had proposed to the union two hours before the contract deadline. It included the creation of 5,400 jobs and an investment of $7 billion into eight facilities, including for a new electric truck and a new battery-cell manufacturing facility.

The truck would go to Detroit-Hamtramck Assembly Plant, which is set to be without product in January; the battery-cell plant would be built in northeast Ohio's Mahoning Valley, site of the recently idled Lordstown Assembly Plant. GM has a deal to sell the Ohio plant to Lordstown Motors Corp., an affiliate of electric-truck startup Workhorse Group Inc.

Meanwhile, more than 100 automotive supplier companies have enacted some form of temporary layoffs affecting up to 12,000 salaried and hourly employees in the United States, as the UAW's strike against GM continues for the 23rd day.

The statistic from the Original Equipment Suppliers Association shows the growing repercussions of the national strike against the Detroit automaker. East Lansing's Anderson Economic Group estimates the walkout of 46,000 hourly GM employees has led to more than $412 million in lost direct wages from nearly 150,000 workers throughout the auto industry during the first three weeks.

Julie Fream, CEO for the suppliers association, warns the strike could bring challenges to the industry even after it ends.

"Given the low U.S. unemployment rates and shortage of skilled trades workers, companies may be challenged to ensure laid-off employees return to their previous positions," she said in a statement Tuesday. "Upon conclusion of the strike, this could cause extended disruption in the supply chain as suppliers ramp up their production."

GM itself has lost hundreds of millions of dollars in earnings, according to analysts and economists. Its ability to minimize the impact of the strike will hinge on how quickly it can get production lines up and running again.

That is also a concern for dealers, Charlie Gilchrist, chairman of the National Automobiles Dealers Association, told the Automotive Press Association on Tuesday in Detroit.

"The ground stock we have will carry us through," said Gilchrist, who owns two GM dealerships in Texas. "We'll probably run out after the strike while they're trying to ramp up production."

That could affect sales — especially since GM's truck plant in Silao, Mexico, began idling last week due to parts shortages. On Monday, GM closed its Ramos Engine plant in Ramos Arizpe, Mexico, putting 415 employees out of work. With that addition, more than 10,000 non-UAW-GM employees in Ohio, Mexico and Ontario have been impacted by the strike.

Yet Cox Automotive says GM continues to have an ample supply of new vehicles to sell despite the four-week work stoppage. Overall, GM had an 81-day supply or cars, trucks and SUVs as of the beginning of October, above the industry average of 66 days. But the flow of parts is slowing, making vehicle service more difficult and causing dealers to delay needed repairs.  

Meantime, in Michigan, more than 17,000 GM employees are on strike for which they earn just $250 per week; picketers began collecting their second strike paychecks Monday. The state's Unemployment Insurance Agency had processed jobless benefits for about 3,500 auto-supplier workers as of Sept. 30 because of the strike. The maximum a claimant can receive is $362 per week.

Gov. Gretchen Whitmer visited striking employees Monday on the picket line at GM's Delta Township Assembly Plant in Lansing, saying she is "very concerned" about the dispute and called for the parties to "find some common ground as quickly as possible."

The UAW's strike against GM entered its 23rd day Tuesday.

Also up for discussion in the talks are the training centers the UAW operates with and that are funded by the Detroit Three automakers, The News learned from three sources. The centers' funds at Fiat Chrysler Automobiles NV and GM are embroiled in a federal corruption investigation that has found the money was used for bribes and to solicit kickbacks. Labor talks could restructure how funds for training employees are administered.

The training centers are the latest operation to face scrutiny because of the ongoing federal probe that has charged 11 people, produced nine convictions and implicated UAW President Gary Jones, who has not been charged.

The UAW put its Region 5 director, Vance Pearson, on leave Friday. Pearson, who also is a member of the union's executive board, was charged last month with embezzling union funds, mail and wire fraud, and money laundering. Since then, he had been advising the UAW-GM bargaining committee on its negotiations.

The criminal case focuses on a years-long conspiracy that embezzled $1 million in union dues for lavish spending by UAW officials during conferences in Missouri and California, including $120,000 for cigars, steak dinners and drinks, and 107 rounds of golf, according to prosecutors. The News identified Jones and his predecessor, Dennis Williams, as two unnamed officials in an affidavit filed with the criminal complaint against Pearson, Jones' former aide.

As employees strike at GM, UAW members employed with Aramark Corp. also are on strike, now for the 24th day. Aramark handles janitorial services for five GM facilities: the Flint Metal Center, Flint Engine Operations, Flint Assembly, Warren Tech Center and the metal center in Parma, Ohio.

"We continue to meet with the Company and are still not in agreement on key issues such as wages and healthcare," Dittes said in an update Tuesday. "We thank you for your sacrifices and loyalty during this difficult time."