UAW Rejects Offer From GM, as Setback Extends Strike

The strike has halted factory output at more than 30 GM plants in the U.S. Photo: Jeremy Hogan/SOPA Images/Zuma Press

With contract talks in Detroit in a critical stretch, bargainers at General Motors Co. and the United Auto Workers union clashed over competing proposals during the weekend, as they struggled to resolve the longest nationwide strike at the company in decades.

The UAW’s top bargainer for GM said Sunday morning that talks had taken “a turn for the worse,” saying that the giant auto maker had reverted back to a previously rejected proposal with only minor changes. That marked a change in tone from Friday, when negotiators expressed hope an agreement that would lead to an end of the three-week standoff could be largely hashed out during the weekend.

Still, negotiations continued Sunday after the letter was released. Some on the company side feel the parties remain close on important issues that have been sticking points, including pay for newer employees and a path to full-time status for temporary workers, according to a person familiar with the company’s thinking. GM’s team felt blindsided by the union’s public rejection of its offer, this person said.

“We continue to negotiate in good faith with very good proposals that benefit employees today and builds a stronger future for all of us,” a GM spokesman said. “We are committed to continuing discussions around the clock to reach a resolution.”

A resolution would move the union closer to concluding a strike at GM that is poised to enter its fourth week, a nationwide walkout that is already the company’s longest since 1970, when workers picketed for 67 days.

The strike has halted factory output at more than 30 GM plants in the U.S., stifled production for auto-parts suppliers and resulted in temporary layoffs for thousands of non-UAW factory workers.

Dealers are struggling to get replacement parts to fix vehicles, forcing customers to wait longer, and some analysts have warned the prolonged work stoppage could tip Michigan’s slowing economy into a recession.

Both the company and picketing workers, who aren’t currently receiving a GM paycheck, are also feeling the financial strains as the strike drags on.

“It’s very disappointing,” said Julaynne Trusel, a worker at GM’s Detroit assembly plant, who said she caught a cold on the picket line this weekend as temperatures dropped in southeast Michigan. “Everybody is ready to go back to work.”

Analysts estimate GM is losing $50 million to $100 million a day from lost factory production, a sum that is expected to make a bigger dent in the company’s second-half performance the longer the work stoppage goes on. JPMorgan Chase last week pegged GM’s losses at more than $1 billion through two weeks of the strike.

GM last week idled its pickup-truck plant in Mexico because of strike-related parts shortages, fully cutting off output of its most-profitable vehicle line.

Workers get $250 a week in financial assistance from the union’s strike fund but that figure is a fraction of their full wage, which is anywhere from $630 to $1,200 for a 40-hour workweek.

Looming behind the strike is GM’s long-range bet on building more electric cars, which require far fewer workers and have more foreign-sourced parts. For the UAW, such plans are a threat to wages and job security.

UAW and GM bargainers had been making progress heading into the weekend. Terry Dittes, the UAW’s top GM negotiator, sent a letter to members on Friday saying the union had found common ground on health care and a path to permanent employment for temporary workers.

Rank-and-file members were buzzing Saturday night that bargainers were hitting the final stretch and the strike might conclude soon. UAW leaders were confident in an offer presented to GM Saturday evening, believing a tentative agreement was in reach, according to a person familiar with their thinking.

But when GM revealed its counter offer on Sunday morning, union negotiators were taken aback by what they felt was a proposal far different from the union’s latest one, this person said.

“You didn’t even have a professional courtesy to explain why you could not accept or why you rejected our package proposal for each item we addressed,” Mr. Dittes wrote in a letter Sunday to GM’s top labor relations executive that was released publicly by the union. “The law and basic decency require no less.”

Mr. Dittes, in a separate letter to members Sunday that said talks had turned for the worse, blamed the company for a lack of progress, saying its proposal failed to provide enough job security in the next four-year contract.

As of Saturday, the biggest remaining issues on the table were whether or how to shorten the eight-year time period it takes for a new worker at GM to reach full pay of about $30 an hour and providing enhancements to workers’ pensions and 401(k) contributions, according to people close to the talks.

The disparity in pay between veteran workers and newer hires has long upset the union, which has fought for equal pay among members working in auto factories. New hires start out at about $17 an hour and get yearly raises until they reach full pay.

GM and its two Detroit peers— Ford Motor Co. and Fiat Chrysler Automobiles NV—have said they need the graduated pay scale to keep labor costs affordable.

The need to secure jobs has been among the UAW’s top demands. Union negotiators typically press the company to make commitments on how much money it will invest in U.S. factories and what new models it will build in these plants as a way to guarantee existing jobs, as well as create new ones.

The company’s decision in November 2018 to indefinitely idle four UAW-represented factories—including assembly plants in Detroit and Lordstown, Ohio—early on drove a wedge between the two sides. GM, in an offer made public after the UAW called the strike, said it had solutions for Detroit and Lordstown and offered wage increases and plant investments to create thousands of new jobs.

The Detroit car maker, the U.S.’s largest by sales, had also offered to build a battery plant near its assembly facility in Ohio, which would create a few hundred jobs, people close to the talks have said. Additionally, it plans to sell the now-closed Lordstown plant to an electric-truck startup.

Workers in the area say they haven’t been satisfied by this offer. Electric vehicles require roughly 30% fewer workers to assemble than gas-powered cars because they are less complex to build, analysts say. Wages at battery factories typically are far less than those at vehicle-assembly plants.

Write to Mike Colias at [email protected]

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