The strike is a sharp turnaround in the contract negotiations that had been extended beyond the contract deadline of September 14. Reports over the weekend noted that the two parties were working on an all-important trust to manage retiree health care costs, which are estimated to be between $90 billion and $105 billion.
But in a press release issued Monday at 1:40 a.m., union president Ron Gettelfinger said GM failed to address concerns among union members about job security. It is widely believed among observers that in exchange for the creation of a health care trust, which was seen as a concession by the union, GM would ensure the stability of the workforce at its U.S. plants.
“We’re shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years,” Gettelfinger said in the press release.
It remains unclear how many of the 73,000 UAW members left their posts. This is the first unionwide strike against GM since 1970 and the first work stoppage by the union since a 54-day walkout in 1998 at a parts-making facility in Flint, Michigan, that cost GM $3 billion.
GM spokesman Dan Flores said in a statement: “The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company. We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors.”
Despite the strike, the union said it would remain at the negotiating table with GM.
Past experience may have created different expectations for each side. Last year, GM and the UAW established a $15 billion health care trust for retirees through 2011. Retirees, for the first time, are expected to pay $792 in annual health care costs they weren’t paying a year earlier. The savings equaled $3.1 billion—enough to help GM make a profit. The UAW saw it as a concession that would be returned in kind; GM, on the other hand, saw it as precedent, says Kristin Dziczek, senior project manager at the Center for Automotive Research in Detroit.
“The UAW, going in, was like, ‘We’ll help you on health care if you give us job security and other things,’ ” she says. “And GM’s position is, ‘You’ll help us on health care and you’ll help us on a lot of other things.’ And that’s a hard place to be.”
Negotiations also appear to have reached an impasse regarding the future of the union’s jobs bank (in which GM pays workers during a layoff or pays them to perform “nontraditional work” like community service); the creation of a two-tier wage system; and the outsourcing of non-production jobs to third parties, which the UAW agreed to do at a plant in Dundee, Michigan, operated by the Global Engine Manufacturing Alliance.
The GEMA plant, which makes engines for Chrysler, Mitsubishi and Hyundai, has UAW-represented contractors who work alongside UAW line workers. The unprecedented arrangement breaks the longstanding union tradition of having all employees at the same plant work under the same contract agreement.
That concession, made in 2001, could come back to haunt the union as it takes the unusual step of calling its first nationwide strike in 37 years.