GM strike, day 30: As Barra, Reuss join negotiations, deal inches closer
General Motors Co. and the United Auto Workers could reach a proposed tentative agreement soon, two people familiar with the situation told The Detroit News, after top leaders of the Detroit automaker joined main table negotiations on Tuesday morning.
GM CEO Mary Barra and President Mark Reuss joined a dozen other GM negotiators for an hour-long discussion with the UAW bargainers, said one of the people. It comes after the UAW on Monday issued an "official call" for local union leaders to come to Detroit for a national council meeting Thursday for a "contract update." Such a meeting is needed to send a tentative agreement to the union's membership and to end the national strike, now in its 30th day.
"I think that Mary Barra joining negotiations today, and the fact that the UAW has a meeting scheduled, are good signs that a tentative agreement may be reached soon," said Colin Lightbody, a former Fiat Chrysler Automobiles NV labor negotiator and president of HR and Labor Guru Inc.
A GM spokesman declined to comment. The Detroit automaker's shares reversed declines Tuesday morning after the news broke and were rising more than 2%, a percentage point more than major market indexes. GM's stock is down about 6% since Sept. 13 before the strike began.
Barra and Gerald Johnson, GM's executive vice president of global manufacturing, met with UAW President Gary Jones and Vice President Terry Dittes last Wednesday, though the gathering was not at the bargaining table, said the person who was not authorized to speak publicly about the talks.
After the Detroit automaker submitted a comprehensive offer to the UAW on Oct. 7, Barra "emphasized the need to get a comprehensive response from the union as soon as possible," GM Vice President of Labor Relations Scott Sandefur wrote in a letter to Dittes Thursday.
The automaker said on Friday its offer had included higher wages, secured the union's health care benefits and gave temporary employees a path to permanent employment. The UAW responded with a counterproposal that evening.
The union's counterproposal included "all of your outstanding proposals that are at the main table and unsettled," Dittes wrote in a letter to local union leaders Friday. He said the parties would have a tentative agreement if GM accepted it.
Barra likely was at the main table Tuesday to "emphasize how important it is for this strike to be over," said Art Schwartz, president of Labor and Economics Associates in Ann Arbor and the former general director of labor relations at GM. CEOs almost never partake in the bargaining, he said, though Barra previously headed human resources for GM and was a plant manager at Detroit-Hamtramck Assembly.
CEOs are "the point of last resort," Schwartz said. "If you’re bringing in the CEO, you have nowhere else to go. You have nothing more to appeal to.”
The UAW's national council meeting is scheduled to convene at 10:30 a.m. Thursday in the Ambassador Ballroom of the Marriott Hotel at the Renaissance Center, according to the call letter. The UAW on Monday would not comment further on why the meeting is being held.
The meeting creates a new deadline for the talks that could take them to the next level, said Harley Shaiken, a professor at the University of California-Berkley who studies labor issues.
"I think it's meant to focus the negotiations," he said. "That's the new deadline to get a new settlement effectively. It adds a little bit of pressure to the talks, though a deadline is not a guarantee there will be a settlement. With Mary Barra, Mark Reuss and the top UAW leadership meeting, this could go to the wire late Wednesday, early Thursday."
If an agreement, however, is not reached, Thursday's council meeting could be used to update local leaders on the talks or get their perspective on what is needed to get a settlement ratified, experts said. There also could be a decision to move the talks to another company, though that is unlikely with how far negotiations have gone with GM, Shaiken said.
If a settlement isn't reached in 48 hours, Patrick Anderson, an East Lansing economist who has been following the economic impact of the strike, is urging the president to intervene under powers of the Taft-Hartley Act to stop the strike.
"Nobody wants elected officials to make decisions in private industry. It's far preferable that GM and the UAW work it out themselves," Anderson, CEO of the Anderson Economic Group, told The News. "Taft-Hartley is a last-resort. The commerce and the income and welfare of the country is being put at risk. It's not a situation where there's any new information that's available; all the issues have been thoroughly discussed."
In letters to U.S. Reps. Debbie Dingell, D-Dearborn, and Fred Upton, R-St. Joseph, Anderson estimates the strike against GM has had a greater economic impact than when the president last invoked Taft-Hartley. President George Bush in 2002 successfully used the power to reopen 29 West Coast ports after the Pacific Maritime Association locked out 10,500 longshoremen for 12 days over an alleged work slowdown. Bush cited an economy in recovery and the need to move military supplies.
GM has by now lost $1.2 billion and the number of affected workers has grown to approximately 175,000 as the work stoppage creates repercussions up the supply chain, Anderson estimated. Lost wages total more than $624 million in Indiana, Michigan, Missouri, Ohio and Texas, he said.
"Too many people have lost too many paychecks," Anderson said.
For comparison, Anderson's economic consulting firm estimates the 2002 work stoppage affected up to 36,000 workers leading to $36 million in lost wages mostly in California. Some economists at the time, however, estimated that the work stoppage had cost the economy more than $10 billion, The New York Times reported in 2002.
“The Trump Administration is not involved in the negotiations between the UAW and GM," White House spokesman Judd Deere said in a statement. "As President Trump has said, we would like to see a fair and speedy conclusion to these talks.”
Requests for comment on the invocation of Taft-Hartley were sent early Tuesday evening to GM and the UAW as well as Upton and Dingell. GM declined comment.
"This is a strike whose implications and impact go well beyond General Motors and the UAW, well beyond Detroit," Shaiken said. "It's determining how U.S. companies compete in the global economy."
The parties had made progress over the weekend, but unsettled issues remained — one being "in-progression employees," a source with knowledge of the situation told The News Monday.
It takes eight years for new permanent hires to get to the top of the pay scale. The union wants to reduce the time it takes to get to the top. GM, meanwhile, is looking to limit increases to total labor costs, which already are $13 per hour per employee higher than foreign automakers manufacturing in the United States, according to the Center for Automotive Research in Ann Arbor.
"A prolonged strike could burn significant cash and bring GM to its knees," John Murphy, a Bank of America Corp. analyst, said in an investors note Tuesday, "but investors likely will also react negatively if management is perceived to have caved into labor's demands and GM's long-term competitiveness is threatened."
Murphy estimates the first four weeks of the strike have cost the automaker more than $2 billion in pre-tax earnings — and permanent employees potentially $2,000 in profit-sharing checks. He added that the UAW's demands for job protection could "potentially backfire and reduce long-term job security."
"An important point we would note is that if GM does not remain profitable, the company cannot maintain employment, especially relative to transplant OEMs that the UAW has failed to unionize," Murphy wrote.
In response, UAW spokesman Brian Rothenberg said in a statement: “UAW GM members understand the need for the company to be profitable. In fact, they stood up for GM when they needed us most. This is a company that made $34 billion profit over the last three years under our last contract.”
The 49,000 striking UAW members also began picking up their weekly strike paychecks, which was upped to $275 this week. The union's executive board on Saturday voted to fast-track the 10% increase from January to "bring the power to us at the negotiations table," UAW Vice President Terry Dittes said in a video message on Sunday.
The automaker and UAW have been exchanging and reviewing contract proposals since July. Discussions intensified when the two sides failed to reach a tentative agreement before the Sept. 14 contract deadline, and the union ordered a strike. Since then, a number of proposals have been shot down.
The UAW-GM strike isn't the only strike the union is overseeing as it works through the negotiation process with two other companies: Aramark Corp. and Mack Trucks Inc. The UAW's 850 members employed by Aramark, which provides maintenance at five GM facilities — Hamtramck, Warren, Flint, Grand Blanc and Parma, Ohio — have been on strike since Sept. 15.
More than 3,600 UAW members employed by Mack Trucks walked off the job Sunday over issues including wage increases, job security, wage progression, and health and safety.