Business News - Opportunities - Reviews
DETROIT — A decade ago, when General Motors was on the brink of collapse and was ushered into bankruptcy by the federal government, the company’s unionized workers bore a significant portion of the pain to bring the automaker back to financial health.
The United Auto Workers agreed to allow General Motors to hire significant numbers of new workers at roughly half the hourly wage of those already on the payroll and with reduced retirement benefits. In the following years, G.M. was also able to bring in temporary workers with even slimmer wage-and-benefit packages and little job security.
The bitter medicine helped reinvigorate the automaker, and for the last several years it has been reaping record profits. Along the way, it has pared its United States payrolls, closed several plants and moved more work to Mexico.
Now nearly 50,000 workers have walked off the job at more than 50 G.M. plants and other locations across the Midwest and South, striking to get what they see as their fair share of the company’s hefty returns and block further erosion of their ranks.
“We have given away so many concessions over the last eight-plus years, and this company has been ridiculously profitable over that time,” said Chaz Akers, 24, an assembler at G.M.’s Detroit-Hamtramck plant, which is set to close in January unless the labor talks can win a reprieve. “That’s why we’re here. We’re fighting to get everything that we lost back.”
The across-the-board strike, the first by the U.A.W. since 2007, began at midnight Sunday, a day after the G.M. contract expired. Industry analysts said the walkout could cost the company tens of millions of dollars a day.
In negotiations that resumed Monday morning and continued into the evening, the company has offered to invest $7 billion in United States plants and add 5,400 jobs. It also said it was willing to increase pay and benefits, without offering details.
That’s not enough for Wiley Turnage, president of U.A.W. Local 22, who represents the 700 workers at the Hamtramck plant. “I don’t like where we’re at,” he said at the plant’s main gate Monday, a picket sign reading “U.A.W. on Strike” propped on his shoulder. “We need job security. Our plant doesn’t have production beyond January. We have a lot of young, growing families and we need work for them.”
Focusing on a single company is standard practice in the talks between the U.A.W. and the Detroit automakers every four years. And although G.M. has a smaller domestic work force than its American rivals, Ford Motor and Fiat Chrysler, it presented an inviting target.
The automaker has earned solid profits — it made $35 billion in North America over the last three years — while closing plants in the United States. Ford, in contrast, canceled plans to build a plant in Mexico, and Fiat Chrysler has announced plans for a new factory in Detroit.
“The U.A.W. is making a significant move here and sending a strong signal that what G.M. has been offering is not acceptable,” said Peter Berg, a labor-relations professor at Michigan State University.
Among autoworkers, there is a strong sense that G.M. is not only making enough profit to increase wages but should be obligated to do so because the federal government rescued the company in 2009.
“We literally gave up a lot during the bankruptcy and the American taxpayer gave up a lot,” said Ashley Scales, 32, a G.M. worker walking the picket line outside the Hamtramck plant’s main gate. “We gave up twice because we pay taxes and we gave up in the contractual agreement. And now the corporation is making more profit than ever and they still want to play games.”
It also does not sit well with workers that G.M. has chosen to make certain vehicles in Mexico rather than in American plants. For example, the new Chevrolet Blazer, a sport utility vehicle that years ago was made in the United States, was assigned to a Mexican plant when it was reintroduced last year.
President Trump, who even before taking office castigated G.M. for shifting production to Mexico, returned to the theme on Monday in comments at the White House. While he said he was “sad to see the strike” and hoped it would be short, he emphasized his relationship with autoworkers, and added: “I don’t want General Motors to be building plants outside of this country. You know they built many plants in China and Mexico, and I don’t like that at all.”
Under the contract just ended, workers have gotten a share of G.M.’s profits averaging $11,000 a year over the last three years. But some contend that the U.A.W. failed to push hard enough as G.M. and the other automakers bounced back over the last decade, including the union’s efforts in the last contract talks four years ago.
“The leadership is feeling some pressure from below to deliver something better than what we got in 2015,” Martha Grevatt, a U.A.W. member who retired from a Fiat Chrysler plant in Michigan earlier this year, said in an interview in August.
After making G.M. its target, the U.A.W. extended its contracts with Ford and Fiat Chrysler. The G.M. outcome is meant to set a pattern for the other companies.
But G.M. is looking to cut costs, or at least avoid cost increases, in a difficult business environment. Auto sales are slowing in the United States and China, the world’s largest and most lucrative markets, and the company is spending billions of dollars to develop electric vehicles and self-driving cars.
It still has room to get leaner. At the end of last year, G.M. had the capacity to make one million more vehicles that it was selling, said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich.
To trim capacity, it has closed a small-car plant in Lordstown, Ohio, and components plants in Baltimore and Warren, Mich. The Hamtramck plant makes the Chevrolet Impala and Cadillac CT6, two slow-selling sedans that would need to be retained or replaced to keep the factory running.
Aside from keeping the Hamtramck plant open, the biggest issue for strikers is the tiered wage system, which leaves some workers making significantly less than others for comparable work.
Workers hired before 2007 make about $31 an hour, and can retire with a lifelong pension. Those hired after them (now more than a third of the work force) start at about $17 an hour and can work their way up to about $29 an hour over eight years. They also have to rely on 401(k) retirement accounts instead of pensions.
In addition, G.M. uses temporary workers (about 7 percent of the staff) who earn about $15 an hour, and do not have vision or dental benefits. The system has helped G.M. compete with Toyota, Honda and other foreign automakers operating nonunion plants in Southern states where hourly wages tend to range from $15 to $18 an hour.
But Hamtramck workers said the disparity in compensation under one roof created tension and resentment on the assembly line. “It’s a matter of fairness if someone next to you is making double for the same work,” said Stephanie Brown, 35, a Head Start teacher for 10 years until she took a temp position at G.M. three months ago.
Mr. Akers said he was paid $18 an hour for installing passenger-side headlights, while the driver’s-side headlights were installed by a temporary worker making $3 less.
“That guy has been a temp for two-and-a-half years,” Mr. Akers said. “Is that temporary to you?”
Depending on its length, the strike could have far-reaching effects, potentially hurting some of the thousands of companies that supply G.M. with parts like seats, motors and brake systems, as well as the components that go into those parts.
Other parts of the labor movement may be an asset to the U.A.W. Bret Caldwell, a Teamsters spokesman, said that his union represented about 1,000 drivers who transport G.M. vehicles to dealerships and that their contracts allowed them to avoid crossing a picket line.
Mr. Caldwell said he expected almost all of the car haulers to be idle throughout the strike. “That’ll be a big impact holding up any remaining inventory G.M. has, anything they try to bring in from out of the country,” he said. “It’s the main area of support we’re able to show.”
Business News - Opportunities - Reviews