GM Strike at 11 AM Monday
The United Auto Workers have set a strike deadline. If, by 11 a.m. on Monday, General Motors has not agreed to bargain on the issue of job security, the union will go out on strike. The union’s announcement was made at 1:40 a.m., as bargaining continued through the night hours.
Though word over the weekend had General Motors and the United Auto Workers making significant progress toward agreement and having worked out almost all of the details on a VEBA, the voluntary employee benefit association which would take over the health care benefits for GM’s retired UAW workers.
The problem is the UAW’s demand that General Motors guarantee jobs. “Job security” has been the union’s mantra for decades, but this time around it’s a question of the union’s security, not just those of its members. The union has shrunk dramatically in size over the past two decades and has been utterly unsuccessful at organizing auto workers at foreign nameplate plants and installations in the United States, including Honda, Toyota, Mercedes-Benz, and BMW, despite repeated efforts to do so.
The strike statement issued by UAW president Ron Gettelfinger, said that "[w]e’re shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years. Since 2003, our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement. In every case, our members went the extra mile to find reasonable solutions.”
And, in every case the UAW’s members made out like bandits. Under the attrition plan, employees were often paid in excess of $100,000 to leave the company, saw retirement benefits accelerated, or were paid to transfer to different jobs. Of course, there’s also the pre-2003 contribution of the union to GM’s need to restructure. Though Gettelfinger’s reference is to the beginning of the current contract period, the UAW’s insistence on “job security” is what brought about the creation of the infamous “jobs bank,” in which GM workers were paid 90% of full pay when laid off. Full pay at GM can be as much as $70 per hour.
GM also issued a statement, saying that “[t]he contract talks involve complex, difficult issues that affect the job security of our U.S. workforce and the long-term viability of the company. We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors. We will continue focusing our efforts on reaching an agreement as soon as possible.”
Gettelfinger’s statement was particularly significant because it implied that GM was simply refusing to discuss the UAW’s goal of guaranteeing jobs for its members, and also implied that the union would withhold a strike if the company merely agreed to talk about that issue.
Though some observers continued to claim that a strike was unlikely because it would damage the union as much as the company, others believe the strike threat is serious. GM has told the union that failure to accept its VEBA proposal would inescapably mean the shift of production away from the United States and into foreign plants. The union has made it equally clear that agreeing to a VEBA is continent upon GM agreeing to keep production of cars the size of the Chevy Cobalt and up in the United States. Production of cars smaller than that, such as the Chevrolet Aveo, is already entirely foreign.
GM has been hedging its bets on domestic production for several years, notably with the decision against continuing development of the domestic Zeta platform (instead deciding to produce it in Australia, in more limited numbers) and its rapid expansion of design and assembly facilities in China. Only in light trucks and SUVs has GM recently committed substantial resources to domestic production. But, even in that area, it has recently eliminated production shifts at some assembly plants, apparently permanently.
Indications are, therefore, that the framework for a VEBA has been agreed upon, but that the whole question of whether that VEBA plan can be implemented turns on the extent to which the union can extract job security. GM clearly sees its position today as part of a global automotive environment and appears committed to limiting itself to domestic production that can be profitable. That means being able to eliminate jobs if it is not profitable.
The question is who has the upper hand. GM succeeded in negotiating the VEBA first by arguing that it could not address other issues until the saving to it from the VEBA were concretely determined. But, the funding of the VEBA obviously had an impact on the company’s position on other issues: the more money it committed to the VEBA, the less it has in the bank to spend on other things, including new product development costs.
Gettelfinger’s public statements have consistently indicated a very old-style and inflexible union attitude toward “job security,” akin to insisting that it be regarded as an entitlement. GM seems unwilling to accept that way of thinking. Of course, it may all be a publicity stunt designed to give the UAW leaders a form of “street cred” so that the members think the leadership has struck the best deal possible. If the union strikes Monday and a contract is negotiated by Friday, that’s probably all that this strike was designed to accomplish.
But, if the strike occurs and goes beyond the week-end, it likely means that that GM is holding tough and putting corporate survival ahead of the survival of the union and its leaders – a first in the memory of almost anyone.
Experts have predicted no strike at GM, because both sides had too much to lose. There is a line, attributed to a fictional army general: “Nobody ever wins a war. Some just lose more than others.” That hasn’t prevented wars, either.
Source: Detroit Free Press