GM and UAW strike workers settle for a long fight

United Auto Workers and General Motors prepare for strike, workers at the plant in Lordstown, Ohio want a car, European builders continue to panic about a Brexit without a deal and more at Monday's Morning Shift , Sept. 23, 2019.

1st speed: Who goes back first?

There is a lot to say about the current GM strike, so I'm going to try to pick out some crucial points, but the important point is this: it could take some time and both parties are gearing up for this result.

The last time GM workers went on strike was in 2007 and the action lasted only two days in September. Even if a global recession were looming and GM's bankruptcy was less than two years away, if you question the workers on the picket line now that the strike is on its seventh day, this time is much more serious.

After all, GM is at the moment an extremely profitable company. But this is the case that continues to close US factories and export jobs in the manufacturing sector to other countries as it prepares for a possible short-term economic slowdown and a highly uncertain transformation. of the entire automotive sector in the long term. So for striking workers, it's about securing their present and their future.

The costs of health care are one of the biggest problems. UAW workers pay far less individual contributions to health care plans than most Americans, and GM wants to see this rise, but workers say the dangerous nature of their work makes their current system a necessity . Via CNBC:

After a dozen years as a car worker, Mr. Hall said the generous health care benefits provided by businesses to UAW employees, costing them only 3% of their pocket, are a necessity.

"I have a carpal tunnel, heels and I have been in physiotherapy for my shoulder and my knees. I'm only 41 years old, "she said. "That's why we need this health care for the company. … the repetitive wear of your body is horrible. "

The UAW released Tuesday night a social media video detailing workers' needs for low health care costs, in which several members explain why they believe their health care should remain unchanged.

"You'd be hard-pressed to find a long-term GM worker who would not live day-to-day with a permanent injury because of his job," said Denny Ramos, a GM worker on strike in Lansing, Michigan, in New York. the video.

Meanwhile, both parties engage in a long fight. Most analysts say it will take weeks for GM to feel the financial shock, but workers are living with a $ 250 weekly strike allowance while being cut off from the company's health care. The UAW is covering the latter now, unexpectedly, which is not good news from the strike fund. Via Automotive News:

Most forecasters and Wall Street analysts agree that it would take weeks, if not months, to truly reduce GM's results, even if the company loses between 50 and 100 millions of dollars a day of production. Inventory levels, well above the industry average, can keep full lots at the dealership for the foreseeable future, but some dealers have expressed concern that parts shortages will soon cripple their service departments.

Some GM suppliers, including Nexteer Automotive, have warned that temporary layoffs are planned soon.

GM's tactical decision to abruptly remove about 46,000 hourly workers from their normal health coverage, even though it generated negative headlines, added additional pressure on the union. And while the work stoppage gave employees a release valve to issue long-standing grievances about wages, health care and job security, many expressed apprehension about realities of living with a fraction of their normal salary.

2nd speed: this moment is political too

Michigan played a crucial role in the election of President Donald Trump in 2016, at least in part because Hillary Clinton did so badly in that state. But this time, Democrats are in force to support striking workers. Massachusetts

Senator Elizabeth Warren was in Detroit-Hamtramck this weekend, Minnesota Sen. Amy Klobuchar was there last week and Vermont Senator Bernie Sanders is expected this week. In addition, former Vice President Joe Biden was at the Fairfax assembly in Kansas City to parade with the picket workers.

Here's the Detroit News story about Warren:

Warren joined the rally outside the factory that straddles the border between Detroit and Hamtramck around 12:30 pm. She immediately got out of the motor vehicle and grabbed a sign to walk with the crowd dressed in red and t-shirts saying "I'm a Warren Democrat" and "Warren has a plan for that."

Warren during his visit condemned GM for building products in countries such as Mexico with a cheaper labor force. She credited the unions for the creation of the middle class and said they would rebuild it too.

"UAW workers are here to say more," she said. "They want contracts here that keep these jobs in America. They want a fair salary. They want benefits. They want what it takes to be part of the American middle class. And they want the same thing for themselves and for temporary workers. Everyone deserves a living wage in this country. When unions win, all American workers earn. "

Trump, who has led a bitter campaign to bring back manufacturing jobs in the United States, has for the most part expressed up to now his willingness to find a quick fix to the strike.

In recent years, he has strongly criticized GM's manufacturing changes, but as the PA notes here, the workforce remains an essentially democratic field. This puts him and the rest of the group in a strange place:

Supporting the union would undermine Trump's message that the labor movement does not defend its workers and does not give a boost to a powerful democratic force before the elections.

Engaging with GM would call into question his promises to defend workers and risk being blamed for Rust Belt's economic problems, saying he needed to be re-elected.

The longer the strike lasts, the more difficult it is.

"The story of this case is dangerous in Michigan," said political scientist Matt Grossmann of Michigan State University. He pointed out that Republican Mitt Romney's presidential campaign was penalized in 2012 when Democrats repeatedly pointed to an opinion piece he had written against the bailout of motor vehicles. The title: "Let Detroit go bankrupt."

"It is treacherous to be against the auto workers," Grossmann said.

[…] Michigan-based Republican strategist John Sellek said he thought Trump was on the side of the workers but was trying to "spin the needle" and not "blow up" GM's bid to save a factory or two.

"This corresponds to his electoral victory path and his political positions on trade," he said. "He is following a more cautious path, rhetorically, for the moment. But if he decides, whatever the day, it is time to intervene with both feet, we should not be surprised. "

3rd gear: Lordstown workers say the battery plant is not enough

One of the biggest hotspots in this battle is the now-closed agglomeration of Lordstownfactory in Ohio. The Chevrolet Cruze has already been manufactured, but after being "unaffected", it was waiting for an agreement to be sold to an electric truck startup – even though it would probably mean fewer jobs and certainly not the same level of pay that & # 39; before.

Now, GM is talking about turning it into a battery factory as negotiations continue, but for the striking auto industry workers, one thing is clear: the only way forward is if the we give them a car to make. Via Reuters:

In contractual negotiations with the UAW, GM suggested that the Lordstown facilities be converted into a battery manufacturing plant for electric vehicles. Separately, he also declares to negotiate the sale of the factory to a group affiliated with the EV start-up, Workhorse Group Inc. (WKHS.O). Workhorse declined to comment.

In Washington in June, GM's Executive Director Mary Barra defended the Workhorse Plan. She also told Reuters that GM had no plans to build a new vehicle in Lordstown.

The Lordstown workers say this is the only way to create enough jobs in the manufacturing sector for the community. They – and the UAW – put the blame on GM.

"You did everything GM asked you, and that was still not enough," UAW Local 1112 President Tim O'Hara told 100 jubilant workers at a rally in front of him. the factory Friday. "We will hold the line as long as it will take."

But experts say it's not likely:

The reality is that GM needs to reduce its underutilized manufacturing capacity in the United States, even at current levels, "said Sam Fiorani, vice president of Auto Forecast Solutions.

"There is no chance for GM to reintroduce a product into this plant," he said. "They have too much capacity like that."

(GM made a profit of $ 8.1 billion in 2018.)

4th gear: automakers "wait and see" the rules of emissions

Bloomberg notes that "in 2009, when President Obama announced tighter rules on fuel economy," he was held side by side at the White House with the directors of the biggest Now, his successor is working to roll back these standards. much less visible.

From the story:

Instead of a group of CEOs, the only representative of the auto industry was a professional association official who, after the event, stated that the group was not opposed or supportive of the plan at the moment.

The contrasting scenes highlight the delicate position in which automakers found themselves in President Donald Trump in Washington. The industry put pressure on him to soften Obama's rules, but the plan proposed in August 2018 went beyond what most automakers were looking for.

"That's exactly what we're trying to avoid, this uncertainty that's prevailing," Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said on the sidelines of the event. "We are going to have to look at whatever the final rule, look at the whole package and decide what our position will be, and different companies could fall to different places."

This uncertainty comes in an already unstable period for the industry. Automakers are being pushed by investor pressure to invest billions of dollars in future technologies, including electric and autonomous vehicles.

And even if the fuel economy rules are back to their pre-Obama levels, do not expect an immediate difference in your new cars, given the long product planning cycles. Try around 2025.

If the Trump administration prevails on all fronts – weakening national standards and denying California the power to define itself – it will not necessarily be a decisive victory for the industry. These fixed asset plans and parts contracts have already improved fuel efficiency, both for vehicles running on gasoline and electricity.

"If the standards are weakened, the suppliers who are working on these technologies – whether it's an internal combustion engine or an electric vehicle – will see these volumes decrease, which represents a risk for the suppliers," said Alan Baum, a specialist in l & # 39; automobile. analyst in West Bloomfield, Michigan.

5th gear: Europe freaks

More and more companies that the Mini division of BMW and the Jaguar Land Rover fear a possible Brexit without agreement, which weighs heavily in October. From Reuters:

In a statement, groups including the European Association of Automobile Manufacturers, the European Association of Automotive Suppliers and 17 national groups warned of the impact of the "no-deal" on a sector that employs 13.8 million people in the European Union, including Great Britain, or 6.1. % of the workforce.

"The departure of the United Kingdom from the EU without an agreement would cause a radical change in trade conditions, with billions of dollars in tariffs threatening to affect consumer choice and affordability on both sides. of the Channel, "they wrote Monday.

"The end of unhindered trade could disrupt the industry's" just in time "model, with just one minute of production shutdown, just in the UK, for an amount of € 54,700."

If both parties return to the trade rules of the World Trade Organization, likely consequence of a disorderly Brexit, the groups warned that the necessary tariffs would add 5.7 billion euros to the bill of the World Trade Organization. car trade between the EU and Britain.

It will be interesting to watch.

Reverse: standard oil

Neutral: What resolution do you want to see at the strike?

The extremely low health care premiums paid by UAW workers are confusing to most Americans, who pay much more than that, but you understand why they want to protect that. And GM has actually made a lot of money by exporting jobs out of America. What is the best way for workers to win here?