GM Strike, Now in Its Third Week, Wears on Both Sides
October 01 2019 - 7:04AM
Dow Jones News
By Ben Foldy and Mike Colias
The United Auto Workers strike at General Motors Co. is in its
third week with workers on the picket lines fighting fatigue and
the company feeling the financial strains of lost factory
production.
GM and UAW bargainers worked through the weekend and Monday
trying to negotiate a new labor agreement for the company's 46,000
full-time factory workers.
Top negotiators are trying to resolve differences on key
economic issues, such as wages and use of temporary workers, but
the two sides still remain at odds and no agreement is expected
Monday night, according to people close to the talks.
The nationwide strike is the longest at the company since
1970.
Factory workers at GM say the union had warned for months a
walkout was possible, and in March, UAW leaders increased the
weekly strike pay from $200 to $250 per employee. The strike pay is
intended to offer picketing workers some financial assistance to
offset the loss of a company paycheck during a work stoppage but it
doesn't cover their full wages.
For many workers, the lengthening strike is starting to weigh on
their finances at a time when bills are coming due at the start of
the month. While many saved up for the strike, those funds are
being depleted the longer the strike drags on, they say.
For GM, the nationwide work stoppage, which analysts expect to
dent third-quarter earnings, is extending into the fourth quarter,
threatening the company's forecast for a strong second half of the
year.
Company executives this spring told investors to look for a
profit rebound in the third and fourth quarters as production of
new SUVs and pickup trucks ramps up.
While GM has about $17 billion in cash and additional credit
lines it can tap if needed, analysts estimate the lost production
from the strike is costing the company between $50 million and $100
million a day. The stoppage has halted work at more than 30
factories operated by GM in the U.S.
In a research note Monday, Jefferies analyst Philippe Houchois
estimated the first two weeks of lost factory output has cost GM
around $800 million. The company will find it difficult to make up
the lost production because its truck and SUV plants already had
been running at nearly full capacity, the analyst said.
A GM spokesman declined to comment on the strike's financial
impact. GM shares have declined 4% since the strike began, closing
Monday at $37.48.
"No one ever wins in a strike. It's a matter of how much blood
you want to lose," said Arthur Wheaton, a professor of labor
studies at Cornell University.
Many striking workers say the strike is becoming a major
disruption to their personal finances, in part because they missed
their first company paycheck last Friday.
"We've all got mortgages and car payments and kids in school. My
kids play sports, soccer and wrestling," said Felix Vasquez, 38
years old, a temporary worker at a GM transmission factory in
suburban Detroit.
His wife works at a GM plant in Flint, Mich., and their combined
strike pay of about $500 a week will be roughly a quarter of what
the couple normally brings home, Mr. Vasquez said. He said the
couple was prepared but still is scrambling to supplement their
income. This week, he is working at a construction site after a
friend offered him work.
That pressure is wearing on other picketers, as well.
"I'm staying strong through the process but I'm really ready for
it to end," said Shalonda Dozier, 29, a team leader picketing with
her 3-year-old son outside of the GM assembly plant in Detroit
where she works. The site is one of five in the U.S. and Canada the
company is shuttering as a cost-saving move.
Last week, Ms. Dozier celebrated her birthday on the picket
line, rather than her usual dinner at a fancy restaurant.
"We can't do any extra spending right now," Ms. Dozier said,
adding that she is spending less on groceries and foregoing a
weekly date night with her fiancé.
The past weekend also brought the region's first fall chill and
the steadiest rain since the strike began 15 days ago. To keep
warm, workers at Mr. Vasquez's picket line on Friday unloaded
firewood from a nearby pickup truck into a smoldering metal trash
can.
Temperatures are set to rise Tuesday, but forecasts call for
more cold and rain later this week.
"I wore warm stuff but it still kind of sucks getting pelted by
the rain, " said Jason Kelly, 30, who installs vehicle wiring at
the Detroit assembly plant. Mr. Kelly said he has postponed his
efforts to move from his parents' house into his own home on
account of the strike.
Nora Naughton contributed to this article.
Write to Ben Foldy at Ben.Foldy@wsj.com and Mike Colias at
Mike.Colias@wsj.com
(END) Dow Jones Newswires
October 01, 2019 06:49 ET (10:49 GMT)
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