General Motors (NYSE:GM)
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2 Months : From Sep 2019 to Nov 2019
By Mike Colias
General Motors Co. -- frustrated at the pace of negotiations with the United Auto Workers -- appealed directly to factory workers with details of its latest contract proposal, a bid to end a 26-day strike that is taking a financial toll on both sides.
In a letter to GM employees Friday, the company's global manufacturing chief Gerald Johnson outlined broad terms of the company's latest offer, including new details that haven't been made public before, such as a clear path to full-time status for temporary workers.
Mr. Johnson said the proposal also includes pay increases through wages and lump-sum payments in each of the contract's four years, as well as improved yearly profit-sharing payouts for hourly workers and no increase in out-of-pocket health care costs.
In this latest offer on Monday, GM boosted its planned investment in U.S. facilities to roughly $9 billion, up from the $7 billion it had included in a proposal made public just before the strike began, according to a person familiar with the proposal. The UAW this week said it is pressing GM for better job security by making a firmer commitment to build more cars and create jobs in the U.S.
The UAW didn't have an immediate response to the GM letter.
GM, in making its offer public, is taking the unusual step of appealing directly to rank-and-file workers, a move that is without precedent in previous years of contract talks. The company's public letter comes as executives have been pressing UAW leaders to accelerate the pace of talks.
In an internal back-and-forth between the UAW and GM Thursday night, the company expressed frustration that UAW bargainers hadn't responded to GM's latest proposal, which it put forward Monday. The UAW said it would wait until several bargaining subcommittees conclude their analysis before formally responding.
About 46,000 full-time GM workers have been on strike since mid-September, idling more than 30 U.S. factories and triggering shutdowns of GM plants in Canada and Mexico. The lost production and other disruption from the work stoppage has cost GM roughly $1.5 billion so far, according to an estimate Friday from Credit Suisse analyst Dan Levy.
Shortly after the strike was announced, GM publicized the details of its original offer in a statement to the press, angering UAW officials, people familiar with the matter said. Since then, the UAW has put out several letters to its members and publicly criticized aspects of GM's proposals, while GM had largely stayed quiet, until Friday's letter.
Mr. Johnson's letter indicates that GM has moved closer to the union's demands since the strike took effect, including a path to full-time work for temporary employees, which had been a sticking point. The sides have made progress on several economic issues such as pay increases and the wage scale for new hires, people close to the talks have said.
Still, union leaders said this week they don't think GM has done enough to guarantee job security over the next four-year contract, claiming the company needs to offer assurances it will fully fill its U.S. factories before building cars in foreign markets like Mexico for import to the U.S.
UAW officials and members entered talks still angry over GM's move last November to close four underused U.S. factories.
"Economic gains in this agreement will mean nothing without job security, " Mr. Dittes wrote in a letter to union members Tuesday.
A week ago, both sides signaled hope that a deal was within reach, but negotiations stalled Sunday, prompting the UAW to release a sharply worded letter expressing disappointment in GM's position. That led to GM's fresh offer Monday.
By Wednesday, GM executives had grown increasingly irritated that the union hadn't yet responded, people familiar with the matter said. That prompted Chief Executive Mary Barra to request a meeting with UAW President Gary Jones. The roughly 45-minute meeting between the executives and top negotiators Wednesday was productive but didn't lead to any breakthroughs, people briefed on the meeting said.
Art Schwartz, a former GM labor negotiator who now works as a consultant, said it would be unusual for a proposal to go unanswered for several days during late-stage negotiations, especially during a strike.
"That response normally should come within hours," he said. "I think what you're seeing here is a little bit of frustration from GM."
UAW workers will miss their third weekly paycheck on Friday. They are receiving weekly $250 payments from the union's strike fund to ease the impact, although that represents a fraction of their normal take-home pay.
Liz Hoople, an assembly-line worker at a GM factory in Lansing, Mich., said she set aside money to weather a strike. Still, she recently postponed some landscaping work and bathed her two dogs at home, rather than spending the usual $100 at the groomer.
"Nobody wants this to go on longer than necessary," said Ms. Hoople, 50 years old. "But people are willing to stay out as long as they can to see some drastic change."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 11, 2019 11:22 ET (15:22 GMT)
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