GM CEO Mary Barra and UAW Pres. Dennis Williams chat before the start of a media Q&A session.
For the first time since General Motors and Chrysler were rescued by federal bailouts, workers at the two companies are being asked to authorize a strike at the two companies should they fail to lock down new contracts with the United Auto Workers Union by the September 14th deadline.
The moves are seen as procedural, however, and don’t reflect signs of trouble in the negotiations that began last month. If anything, UAW officials have said they would see a walkout as a failure and would use it only as a last resort. And the two automakers say they see no reason for a walkout.
“The strike vote is part of the UAW’s democratic process that occurs every contract year,” GM spokeswoman Katie McBride said. “We remain committed to working with our UAW partners on an agreement that benefits employees and strengthens GM’s long-term competitiveness.”
The current round of negotiations marks the first time the 37,000 UAW members at Fiat Chrysler and the 50,800 at GM would be eligible to strike since the federal government stepped in to bail out the two bankrupt automakers in 2009. The multi-billion-dollar aid programs specifically barred workers from taking that step. But that clause has now expired and a walked would technically be feasible should those two companies fail to come up with new contracts by the September 14th deadline.
Workers were not barred from striking at Ford Motor Co., which was the only automaker not to receive federal aid. So far, however, the UAW has not announced whether it will seek the formality of a strike authorization vote at Ford.
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Few expect to see a confrontation this year. For one thing, the union is just as aware of the dangers of a strike as the three automakers are. Such a move would not only result in significant, short-term financial losses, but could also impact a maker’s long-term market share. That would make it all the more difficult to achieve one of the UAW’s top goals this year, job security.
Nonetheless, while he cautioned that a strike was not a goal but a sign of failure, UAW President Dennis Williams also declared “I’m not afraid of confrontation,” during a media Q&A session following the opening of contract talks with GM on July 13th. He made similar comments following the opening of talks with Fiat Chrysler and Ford.
Both sides entered the negotiations with a long list of demands. Key among them for the union: guaranteeing the jobs of those workers left at Detroit’s Big Three after years of cuts, and improving wages and benefits for so-called Tier II workers who currently earn just slightly more than their veteran colleagues.
The makers, however, are trying to hold down labor costs, even reduce them from the current levels. GM is believed to spend about $57 an hour on wages and benefits, Ford $55 and FCA $47. Those figures are slightly higher than key competitors like Toyota, Honda and Hyundai pair at their own U.S. assembly plants, though German makers BMW and Daimler AG pay slightly more than the Detroit Big Three.
Sergio Marchionne, FCA’s CEO, has suggested he would consider ending the second tier, but he would want the UAW to put workers’ wages there more at risk, rising and falling depending upon the company’s financial fortunes.
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Both labor and management have struggled to work past the confrontational approach that long defined their relationship in the auto industry. For the UAW, a strike would also pose risks in its broader effort to organize those foreign-owned assembly plants. Management at companies like Nissan have warned workers that the UAW be a disruptive force and not yield them any benefits.
So far, only Volkswagen AG has voluntarily welcomed the UAW in to represent its workers at a plant in Chattanooga, Tennessee.
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It was absolutely unconstitutional to prevent workers from striking when U.S. tax payers provided loans to GM and Chrysler. It was also illegal for retirees to lose their pensions due to corporate mismanagement that got GM and Chrysler into bankruptcy. That whole deal was dirty because of corrupt politicians and corporate CEOs, which is no surprise at all in the U.S. Yes it was worth saving jobs but there was no need for the unscrupulous behavior, loans not being fully repaid, elimination of legitimate dealers, elimination of retiree benefits that they worked for their whole lives, etc. This is just another U.S. disgrace.
Jorge, Your unrealistic wage and benefit demands caused GM to go bankrupt. Then you got a far better pension settlement than the law allowed. You are ungrateful.