By Nora Naughton and Mike Colias
With contract talks in Detroit in a critical stretch, bargainers
at General Motors Co. and the United Auto Workers union clashed
over competing proposals during the weekend, as they struggled to
resolve the longest nationwide strike at the company in
decades.
The UAW's top bargainer for GM said Sunday morning that talks
had taken "a turn for the worse," saying that the giant auto maker
had reverted back to a previously rejected proposal with only minor
changes. That marked a change in tone from Friday, when negotiators
expressed hope an agreement that would lead to an end of the
three-week standoff could be largely hashed out during the
weekend.
Still, negotiations continued Sunday after the letter was
released. Some on the company side feel the parties remain close on
important issues that have been sticking points, including pay for
newer employees and a path to full-time status for temporary
workers, according to a person familiar with the company's
thinking. GM's team felt blindsided by the union's public rejection
of its offer, this person said.
"We continue to negotiate in good faith with very good proposals
that benefit employees today and builds a stronger future for all
of us," a GM spokesman said. "We are committed to continuing
discussions around the clock to reach a resolution."
A resolution would move the union closer to concluding a strike
at GM that is poised to enter its fourth week, a nationwide walkout
that is already the company's longest since 1970, when workers
picketed for 67 days.
The strike has halted factory output at more than 30 GM plants
in the U.S., stifled production for auto-parts suppliers and
resulted in temporary layoffs for thousands of non-UAW factory
workers.
Dealers are struggling to get replacement parts to fix vehicles,
forcing customers to wait longer, and some analysts have warned the
prolonged work stoppage could tip Michigan's slowing economy into a
recession.
Both the company and picketing workers, who aren't currently
receiving a GM paycheck, are also feeling the financial strains as
the strike drags on.
"It's very disappointing," said Julaynne Trusel, a worker at
GM's Detroit assembly plant, who said she caught a cold on the
picket line this weekend as temperatures dropped in southeast
Michigan. "Everybody is ready to go back to work."
Analysts estimate GM is losing $50 million to $100 million a day
from lost factory production, a sum that is expected to make a
bigger dent in the company's second-half performance the longer the
work stoppage goes on. JPMorgan Chase last week pegged GM's losses
at more than $1 billion through two weeks of the strike.
GM last week idled its pickup-truck plant in Mexico because of
strike-related parts shortages, fully cutting off output of its
most-profitable vehicle line.
Workers get $250 a week in financial assistance from the union's
strike fund but that figure is a fraction of their full wage, which
is anywhere from $630 to $1,200 for a 40-hour workweek.
Looming behind the strike is GM's long-range bet on building
more electric cars, which require far fewer workers and have more
foreign-sourced parts. For the UAW, such plans are a threat to
wages and job security.
UAW and GM bargainers had been making progress heading into the
weekend. Terry Dittes, the UAW's top GM negotiator, sent a letter
to members on Friday saying the union had found common ground on
health care and a path to permanent employment for temporary
workers.
Rank-and-file members were buzzing Saturday night that
bargainers were hitting the final stretch and the strike might
conclude soon. UAW leaders were confident in an offer presented to
GM Saturday evening, believing a tentative agreement was in reach,
according to a person familiar with their thinking.
But when GM revealed its counter offer on Sunday morning, union
negotiators were taken aback by what they felt was a proposal far
different from the union's latest one, this person said.
"You didn't even have a professional courtesy to explain why you
could not accept or why you rejected our package proposal for each
item we addressed," Mr. Dittes wrote in a letter Sunday to GM's top
labor relations executive that was released publicly by the union.
"The law and basic decency require no less."
Mr. Dittes, in a separate letter to members Sunday that said
talks had turned for the worse, blamed the company for a lack of
progress, saying its proposal failed to provide enough job security
in the next four-year contract.
As of Saturday, the biggest remaining issues on the table were
whether or how to shorten the eight-year time period it takes for a
new worker at GM to reach full pay of about $30 an hour and
providing enhancements to workers' pensions and 401(k)
contributions, according to people close to the talks.
The disparity in pay between veteran workers and newer hires has
long upset the union, which has fought for equal pay among members
working in auto factories. New hires start out at about $17 an hour
and get yearly raises until they reach full pay.
GM and its two Detroit peers -- Ford Motor Co. and Fiat Chrysler
Automobiles NV -- have said they need the graduated pay scale to
keep labor costs affordable.
The need to secure jobs has been among the UAW's top demands.
Union negotiators typically press the company to make commitments
on how much money it will invest in U.S. factories and what new
models it will build in these plants as a way to guarantee existing
jobs, as well as create new ones.
The company's decision in November 2018 to indefinitely idle
four UAW-represented factories -- including assembly plants in
Detroit and Lordstown, Ohio -- early on drove a wedge between the
two sides. GM, in an offer made public after the UAW called the
strike, said it had solutions for Detroit and Lordstown and offered
wage increases and plant investments to create thousands of new
jobs.
The Detroit car maker, the U.S.'s largest by sales, had also
offered to build a battery plant near its assembly facility in
Ohio, which would create a few hundred jobs, people close to the
talks have said. Additionally, it plans to sell the now-closed
Lordstown plant to an electric-truck startup.
Workers in the area say they haven't been satisfied by this
offer. Electric vehicles require roughly 30% fewer workers to
assemble than gas-powered cars because they are less complex to
build, analysts say. Wages at battery factories typically are far
less than those at vehicle-assembly plants.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 06, 2019 19:47 ET (23:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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