Makes me proud to be an American – GM strike settled
Posted on Sep 26, 2007
in Opinions by PMC
Editors Note: We’ll have to wait another four years before the UAW members can blame Mexico for the loss of jobs and closure of plants in the United States. And doesn’t it make you proud to know these patriotic Americans are walking the picket line for mom, apple pie and the American way. As this photo, which you will not see published in the U.S. illustrates, the attitude of the UAW workers towards the American consumer and his employer. Just gives me the warm fuzzies to be an American.
General Motors and the United Auto Workers agreed to a new contract early Wednesday, ending a two-day nationwide strike with a watershed deal that establishes a new union-managed trust fund, funded by GM,for retiree health care but does not include wage hikes.
The tentative four-year agreement was reached around 3 a.m. Union officials promptly called off the strike — the first national job action against GM in more than 30 years — and said the new contract will be submitted to union members for ratification by the weekend.
GM’s 73,000 unionized employees are expected back on the job Wednesday afternoon and now must ratify the contract hammered out by union leadership.
To win over workers and get the deal wrapped up quickly, GM is dangling a $3,000 signing bonus for each member, with a possibility of additional signing bonuses in later years of the contract.
However, workers will get no base wage increases or cost-of-living adjustments as they have in the past, according to sources who have been briefed on the contract.
“There is no question this was one of the most complex and difficult bargaining sessions in the history of the GM, UAW relationship,” GM chairman and chief executive G. Richard Wagoner Jr. said in a statement. “This agreement helps us close the fundamental competitive gaps that exist in our business.”
The company said the new contract would let GM “improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States.”
In mid-day trading, shares of GM were up nearly 5 percent at $36.10.
The agreement is expected to include larger monthly pension payouts for retirees, which are meant to offset any increases in health-care expenses for retirees.
The agreement is also expected to include language the allows GM to pay lower wages and benefits for newer workers and other workers in the plant who do not do manufacturing work.
Under existing union rules, U.S. automakers have to pay UAW benefits and wages of about $28 per hour for the housekeeping of facilities — costs that the non-union facilities of foreign automakers do not have to bear. (for pushing a broom?)
Foreign automakers, such as Toyota Motor Corp., have much more flexibility in non-manufacturing labor costs. As global competition has heated up, those automakers are pushing their manufacturing wages down. At a new assembly plant being built in Mississippi, for instance, Toyota has said it plans to pay workers as little as $12 an hour.
Currently, GM has a cost of $78 dollars per hour, per worker in wages and benefits compared to Toyota’s $48.00 per hour, yet the wage scale between the two companies is comparable.
The contract might also include changes to the so-called “jobs bank” — a costly union provision that forces the company to maintain UAW salaries when plants are closed or idled.
With the U.S. auto industry steadily losing market share to overseas manufacturers, both sides said the agreement will help keep jobs and manufacturing capacity in the United States.
GM is carrying some $50 billion in unfunded retiree health obligations on its books, a liability that executives say has helped make the company less competitive against foreign manufacturers. Toyota, the Japanese auto giant, is expected to supplant GM this year as the world’s largest car maker.
Under the agreement, responsibility for the retiree health plan will shift to a Voluntary Employees’ Beneficiary Association (VEBA) managed by the union. Details about how the VEBA will be funded have not been disclosed. But it is expected to involve a one-time payment of as much as $35 billion by GM, providing the union with money to invest and to pay for retiree benefits while reducing the company’s future expenses by billions of dollars. Creation of the retiree health trust is to be monitored by a judge and the Securities and Exchange Commission, according to GM’s statement Wednesday morning.
At a Detroit news conference, UAW President Ronald A. Gettelfinger said the memorandum of understanding outlining the health fund would secure retiree health benefits for decades to come.
“We’ve got it secure and in place,” he said, according to the Detroit News.
Other details of the agreement were not released as union negotiators prepared to brief their national leaders and circulate the contract to local affiliates for approval.
Final negotiations had focused on the union’s desire to keep jobs at U.S. plants and reduce the use of part-time, temporary workers, while the company hoped to find ways to decrease the roughly $70 in average wages and benefits that it pays employees. GM’s labor costs are estimated to be between $25 and $30 an hour more than those of Toyota and other competitors.
The new contract, and the treatment of retiree health costs in particular, are expected to form a framework for upcoming union negotiations with Ford and Chrysler.
The U.S. auto industry is in the midst of a critical restructuring, with the Big Three companies in Detroit closing factories, shedding workers and changing designs to catch up with foreign manufacturers and evolving consumer tastes.
The strike began Monday at GM’s 80 unionized plants after a union-imposed deadline passed without an agreement. The impact was quickly felt — and demonstrated why both sides feared a prolonged shutdown. One U.S. auto-parts maker laid off hundreds of workers, and the president of the autoworkers union in Canada predicted 100,000 layoffs there by the weekend if the strike continued to disrupt production.
For each day of the strike, GM’s production was projected to fall 14,000 new vehicles behind rival automakers, according to industry estimates. The struggling auto giant was in danger of losing tenuous beachheads it had established with hot-selling, high-profit vehicles, such as the Buick Enclave and GMC Acadia. A UAW official said on Tuesday that the union had taken into account GM’s inventory before the strike and had warned the automaker before negotiations began to build up inventories of key vehicle lines.
Talks had continued Tuesday against a background of 24-hour nationwide picket lines.
Gettelfinger said Tuesday morning that he was hoping for a quick end to the strike, as many of GM’s 73,000 union workers around the country began budgeting to live on $200 a week in strike pay.
“In many ways it may be a good thing because it will bring an end to this thing quicker,” Gettelfinger said in a radio interview on Detroit’s WJR-AM. “We are ready to settle the agreement and move on with life. But it takes two sides to do that.”
The strike was a gamble of sorts for the union, whose members reported making no preparations for an extended walkout. A smaller, more targeted strike would have been easier to sustain. In 1998, the UAW struck at two key GM plants for 54 days, costing the company $12 billion in sales and $3 billion in profit.
Negotiations focused on wages, security for U.S. workers worried about jobs moving overseas, and the company’s continued investment in new products.
The strike was felt beyond GM. Delphi, which makes parts for GM and its rivals, began laying off workers at some of its 29 plants, the company said. Though it continues to make parts for Ford and other companies, Delphi depends on GM for much of its revenue. Some Delphi plants, such as the Saginaw Steering Systems plant in Michigan, divide work roughly equally among the Big Three customers. Delphi laid off a small percentage of its 2,700 workers at Saginaw.
But at the Delphi plant in Lockport, N.Y., about 90 percent of the plant’s output goes to GM, and most of the plant’s 1,900 workers faced lay offs if the strike endured, an industry source said on the condition of anonymity for lack of authorization to speak publicly on the subject.
Buzz Hargrove, president of the Canadian Auto Workers union, said GM production in his country was coming to a standstill because of the strike in the U.S.
At midnight Monday, a car assembly plant in Oshawa, Ontario, closed, putting about 3,600 workers out of jobs. A second Canadian car plant with about 2,800 workers was set to close on Tuesday because it lacks parts made by GM plants in the United States.
More than 16,000 Canadian union workers were to be laid off by the end of Tuesday because of the GM strike. If the strike continued through the end of the week, Hargrove estimated, as many as 100,000 Canadian workers could be laid off.
Despite the effect on his members, Hargrove said he supported the UAW strike.
“I believe General Motors’ problems in the U.S. are the same as they are in Canada — imports from Japan, South Korea and the European community,” Hargrove said. “They close off their markets. GM is trying to make the UAW pay for that. I think it’s wrong and unfair as hell.”
At GM plants around the nation, strikers settled into picket lines on Tuesday and wondered how long the walkout would last. Some said it caught them by surprise.
“All those years, my mom kept the back room stocked with cans of food in case Dad had to go out on strike,” said Mark Wilkerson, 42, crew coordinator for Local 1853 in Spring Hill, Tenn., one of about 200 picketers working six-hour protest shifts at the rural plant. “I didn’t plan anything because I really wasn’t expecting a strike. I heard they were near a deal a few days ago and things were going well, so I blew a lot of money this weekend.”
The Tennessee plant once built Saturns but now makes only parts. GM is retooling the plant to make other vehicles. In the process, 2,200 workers were laid off this year. The plant retains much of its pioneering Saturn management ethos, where workers and managers work more closely together than in other unionized plants. On Tuesday, plant managers brought food and water to striking workers walking the sun-drenched picket lines.
At GM’s Ypsilanti, Mich., parts-shipping plant, temporary workers — those without benefits — joined UAW workers on the picket line.
“I’d like to think I’ll have a job here in 10 or 20 years,” said temporary worker Jeff Helmer, 28, who has been at the plant for more than a year. “It’s been nice work, good work and good pay, and that’s what we’re trying to keep going.”
Tags: General Motors, GM, strike, UAW
With 35 years in the trucking business, 15 years making my homes in Mexico and being very outspoken about issues I believe in, makes me uniquely qualified to present Mexico Trucker Online & Mexico Verdad to the blogosphere
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