UAW-GM talks down to wages - report

By Graeme Roberts | 9 October 2019

Negotiations between General Motors and the United Auto Workers (UAW) have narrowed down to discussions on wages, according to The Wall Street Journal.

Citing the WSJ, seekingalpha.com said the union wants GM to offer more guaranteed wage increases locked into the next four year labour contact while the automaker prefers to give workers more pay in the form of lump sum bonuses so it can tie wages to sales levels. The labour contract that recently expired was a combination of the two (wage increase in the first and third year, lump sum payments in the second and fourth year).

Meanwhile, marketwatch.com, citing auto industry analysts, said the 23 day strike had cost GM production of 165,000 cars and trucks and had passed the point where the GM could make up lost volume.

That meant losses were starting to mount for the company even though its dealers had enough stock to get by for several more weeks, the report said.

The strike by 49,000 United Auto Workers began on 16 September.

Citing sources, marketwatch.com said the UAW was also haggling over pensions, faster wage increases for workers hired after 2007, and guarantees of new products for US factories.

Fifteen of GM's 18 North American assembly plants had been shut down by the strike, including everything in the US and one plant each in Mexico and Canada, according to Bill Rinna, director of Americas Vehicle Forecasts for LMC Automotive.

"Once the strike ends, it may still take up to a week to get the parts pipeline going again. So we are likely looking at a loss of well over 200,000 vehicles," Rinna wrote in a note cited by marketwatch.

Much of that production can't be made up, especially at factories that make popular pickup trucks and large SUVs that already were on three shifts per day before the strike, Kristin Dziczek, vice president of the Center for Automotive Research, was quoted as saying.

The strike had cost GM about US$1.6bn according to JP Morgan analyst Ryan Brinkman who estimated GM was losing $82m per day.

Marketwatch.com noted strikers, in their fourth week without earning a full pay cheque from GM of around $1,200 per week before deductions, are instead having to live on $250 per week in union strike pay.

And it ripples out.

The Anderson Economic Group, a consulting firm in Michigan, estimated 75,000 workers for auto parts supply companies have either been laid off or had their wages reduced because GM factories no longer need the parts. The firm predicted the impact would expand each day GM's factories were silent.

LMC Automotive's Rinna also noted the strike had delayed production of the new mid-engine Chevrolet Corvette sports car which was supposed to start in December.

GM's Corvette plant in Bowling Green, Kentucky, had about 1,000 of the current-generation Corvettes left to build before the strike. Then the plant was to switch its equipment over to build the new version. Now, Rinna wrote, GM will either have to delay the new car's launch or retool the plant faster.