GM General Motors Company

By Mike Colias and Nora Naughton 

The United Auto Workers strike at General Motors Co. is heading into its second week as union and company bargainers face unresolved issues ranging from the use of temporary workers to wages for newer hires, according to people close to the talks.

The strike is already the UAW's longest nationwide walkout at GM since 1970. It has sent tens of thousands of auto workers to picket lines, and halted work at more than 30 U.S. plants. On Sunday, the union hosted rallies across the country, attended by Democratic presidential candidates Elizabeth Warren in Michigan and Joe Biden in Kansas.

While the two sides made some progress negotiating through the weekend, they remain at odds on several key issues and plan to return to the bargaining table Monday morning, the people said.

GM, for instance, has been pushing to expand the use of temporary workers to give it more flexibility when sales slow or market conditions change, while union negotiators want to limit the practice. The UAW argues that these workers earn less in wages for performing the same jobs as full-time employees and should have a more guaranteed path to permanent employment.

The union is pressing to shorten the eight-year phase-in period for new hires to reach the top wage, a provision put in place during the 2015 negotiations, the people close to the talks said. The sides are still negotiating over the length of that period, they said.

Profit-sharing remains on the table, as well. GM has proposed enhancing the formula, which currently pays workers $1,000 for every $1 billion in North American pretax profit that the company earns each year, the people close to the talks said.

In recent years, GM has paid out annual profit-sharing bonuses of more than $10,000 per worker. The union is pushing to extend profit-sharing payouts to temporary workers, which the company is resisting, these people said.

The sides are also discussing ways to blunt the impact of GM's decision last year to close several U.S. plants, including the possibility of a new battery plant in the same northwest Ohio area where GM closed a large assembly plant, these people said.

GM entered talks with the goal of holding the line on labor costs, wary of a potential slowdown in the U.S. car market after nearly a decade of strength. The company angered the union months before talks began with its decision in November to shutter four U.S. factories, part of a broader plan to lower fixed costs while steering more investment toward future bets on driverless and electric vehicles.

Job security and the fate of those plants, including GM's assembly plant in Lordstown, Ohio, have loomed large in negotiations. The Lordstown factory was closed last spring after demand for its lone model, the Chevy Cruze, faded. GM negotiators have maintained during bargaining sessions that it doesn't have fresh models to earmark for Lordstown, people close to the talks said.

As a compromise, GM has proposed establishing an electric-car battery factory nearby that would employ several hundred workers, helping to offset job reductions related to the plant closure in Lordstown, these people said. Roughly 1,400 people were working at that factory before it closed.

The union has said GM's last proposal before the contract deadline, submitted just after 10 p.m. Sept 14, came too late to avoid a strike. That proposal included the battery plant. Talks on details of the plan are continuing, the people close to the talks said.

Separately, GM is trying to facilitate the sale of the factory to a newly formed startup that wants to build electric trucks there.

GM would partner with at least one outside company to establish the battery plant and would ensure that the facility would be staffed by UAW-represented workers, though wages would likely be lower than the nearly $30 an hour that most Lordstown workers had been paid, the people said.

For example, UAW workers at a GM plant in suburban Detroit where battery packs are assembled for use in electric vehicles are paid $15 to $17 per hour. Wages at the proposed battery cell plant likely would be in that range, the people said.

The location of the plant and whether GM would own and operate it couldn't be learned.

GM has framed the battery-plant idea as a way of opening a path for the UAW to gain jobs in areas with the potential to grow as auto makers invest more in electric vehicles. Workers at a large battery plant in Michigan operated by LG Chem aren't represented by the UAW.

"There are all kinds of new technologies coming, and it becomes a Catch-22 for the union if they want to be part of it," said Kristin Dziczek, a labor expert at the Center for Automotive Research in Ann Arbor, Mich. She said the union is likely being careful not to set lower standards for these jobs.

While battery-powered cars are still only a fraction of the U.S. car market, the UAW is facing the potential of lost factory jobs at plants that make engines and transmissions as GM and other car companies invest more in electric vehicles.

"It's about getting a toehold before these new technologies become dominant," Ms. Dziczek said.

The UAW is trying to fend off declining membership and is in the throes of a federal corruption investigation that has led to nine convictions.

Anger at GM among rank-and-file UAW members and their discontent with union leadership over the criminal probe could make it more difficult to pass a deal. A tentative agreement between GM and the UAW needs a majority vote to ratify. Fiat Chrysler workers in 2015 voted down the first tentative agreement before passing a second, richer agreement.

Write to Mike Colias at Mike.Colias@wsj.com and Nora Naughton at Nora.Naughton@wsj.com

(END) Dow Jones Newswires

September 22, 2019 21:28 ET (01:28 GMT)

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