Why GM's strike could last until October

The UAW and General Motors are far apart on each other over several key issues that could take a week or more before an agreement in principle is reached, said Thursday two. people familiar with the talks at the Free Press.

It also means that the strike could last at least two more weeks if the UAW acts on a plan to keep members on the picket line until GM takes its vote to ratify it. 39, agree, as reported by the Free Press.

Other people close to the discussions have warned that breakthroughs could occur quickly, speeding up the resolution.

Meanwhile, the UAW leadership has asked the regional directors to meet union union leaders over the next few days to inform them of the talks, the sources said.

The events occurred as costs for both parties increased during the 11th day of the longest strike in UAW since 1985. Anderson Economic Group, a consultant based in East Lansing, said Thursday that GM had probably lost 113 millions of dollars in profits to date at a rate of $ 25 million a day. UAW members and workers of licensed supplier companies now total $ 266 million in direct wages.

Earlier Thursday, GM turned on a decision made early in the strike that angered the union. He said that he had now decided to pay the health costs of the strikers rather than leaving that to the UAW. The union, however, seemed not to be impressed.

About 46,000 GM UAW members have been on strike at GM factories across the country since September 16. The 2015 contract with GM expired at midnight on September 14th. GM had made an initial proposal for a new contract two hours earlier, but the UAW refused it. .

"On the main issues, we still have work to do," Thursday afternoon, Thursday afternoon, Brian Rothenberg, spokesman for the UAW.

At GM, a spokesman declined to comment on the state of play of the negotiations, thus repeating the company's standard line: "We continue to talk and our goal remains to reach an agreement that builds a better future for our employees and society. "

Members must see a good deal

In addition to having several important unresolved issues, the UAW must also prepare an agreement in principle that union members will ratify unequivocally.

Terry Dittes, vice president of the union's GM department, wants feedback from its members. He would be determined to win an agreement that members will ratify, said one of the regulars of the discussions.

"They are the ones who have to live with this and the UAW is fighting for an agreement that there is no explanation, they like it or do not want it," he said. declared the source.

Overall, the negotiations are considered unemotional and highly targeted. Although the negotiators withdrew each evening, the negotiating partners said the negotiators were ready to do whatever was necessary "and to work many hours to reach an agreement.

But the resolution will be slow because GM and the UAW have high expectations that would require difficult compromises to reach an agreement that can live them, said Marick Masters, director of labor at Wayne State University.

"The preliminary deal they've negotiated will have to be good enough to sell," Masters said. "The leaders (UAW) will not be able to sell an agreement that members will ratify because they will not trust their leaders."

The talks are taking place in the context of a federal corruption inquiry that is now affecting the highest levels of the union. The charges against regional director, Vance Pearson, involved UAW President Gary Jones and outgoing President Dennis Williams in the misuse of union funds.

But, said Masters, "the workers will defend each other and defend the self-employed as a union, they are smart enough to separate the current leaders from the union and its role in helping them."

Unresolved issues

In a letter to members, the UAW said on Wednesday that "all unresolved proposals are now at the main table and have been presented to General Motors and we are waiting for their response.These exchanges will continue until this day. that the negotiations are over ".

These unresolved proposals were described on Thursday as key economic issues. These are the main ones:

• Share of health costs assumed by UAW workers
• temporary
• Salary increases
• Build more products in the United States.

GM's initial offer of Sept. 14 to the UAW called on members to pay 15% of their health care costs. Currently, they pay a total of about 3%, far less than the 28% of the average American worker. The UAW refused GM's offer and the company reduced the rate to 3%.

But the subject is again at the center of discussions, said one of the people familiar with the discussions and described the problems for Free Press. GM again suggests that UAW members pay more for health care costs. GM said it paid about $ 900 million a year for employee health care from one hour to the next.

Another key problem is the use of temporary employees, said this person. The UAW wants GM to create a process that allows a temporary worker to become permanent. Currently, some temporary workers retain this status for years, earn less wages and benefits, and have no paid leave.

More: This is the first contract application from workers – and GM, UAW can not hear on it

More: Why discussions between GM and UAW have lasted so long

More: How GM's proposed benefit-sharing offer to UAW workers has missed the target

But GM wants to make sure of its ability to call on a temporary workforce. The use of lower paid temporary workers allows GM to downsize when the market slows. In addition, the use of more temporary staff will allow GM to be more competitive with foreign companies building vehicles in the United States.

In the United States, the average hourly labor cost at GM is $ 63. It is not the hourly wage plus the benefits paid to workers, but the sum of all labor costs divided by all hours worked. However, Honda, Nissan and Toyota spend about $ 50 an hour on American labor, according to the Ann Arbor Center for Automotive Research. Japanese automakers generally employ more temporary workers than the three in Detroit.

The former union bargainer at Fiat Chrysler Automobiles, Colin Lightbody, said that GM could save up to $ 500 million in future annual labor costs if members of the company do so. UAW could pay more for their health care and save more time.

At the end of last year, GM had about 4,100 temporary workers, or 7% to 10% of the workforce. If GM wants to allocate 20% to 25% of agency workers in a new workplace and increase the amount that workers pay for health care by 15% to 15% now, that would be at least $ 5 a year. time to reduce GM's labor costs to improve them. its competitiveness with Honda, Toyota and Nissan.

"It's a lot of money and that's why GM is ready to hold on," Lightbody said.

Salaries and Jobs

UAW members want a bigger salary increase than the 2% initially offered by GM. In 2015, GM gave workers a 3% wage increase and a lump sum of 4%. A person familiar with the talks said that the two sides were far from an agreement there.

Here are the current salaries, according to the UAW:

• Salary for temporary workers: $ 15 to $ 19.
• A newly hired permanent worker, called "in progress," earns about $ 17 an hour, which can reach $ 28 an hour after eight years.
• A former employee, hired before 2007, earns between $ 28 and $ 33 per hour.
• A skilled worker, about 15% of the Detroit Three's workforce, earns between $ 35 and $ 36 at the hour. They often have a lot of overtime.

Finally, the UAW insists that GM build more products in the United States and better solutions to keep the assembly plants of Detroit-Hamtramck and Lordstown, Ohio, in operation, said the source.

Last fall, GM announced that it would idle four US plants when it "assigned" a product to them. The four companies included Detroit-Hamtramck, Lordstown and the Warren and Baltimore transmission plants.

GM's initial proposal included the construction of an electric pickup truck in Detroit-Hamtramck and a battery cell manufacturer in Lordstown. GM also announced plans to invest $ 7 billion in US facilities and create or maintain 5,400 jobs. About half of these would be new jobs, reported the Free Press.

Public perception

Negotiations took place in the midst of outside distractions, particularly after GM said health care was burdened with the union's $ 800 million strike fund, which also pays strike pay of $ 250 per day. week to members.

When GM reversed its course on Thursday, "our members' reaction was rather negative," said a president of the UAW local who asked not to be named. "They feel that GM is playing games now. The rigors of the assembly line break down your body to begin with and many of our members have health problems. "

Another local leader said his members were initially "delighted" to have GM again to cover health care. But after Dittes, who heads UAW's negotiations with GM, said in a letter sent Thursday to Scott Sandefur, GM's chief negotiator, that GM's "irresponsible actions" in health care had "played" with the lives of UAW families, members felt less enthusiastic.

The leader said GM's overthrow to cover health care once again surprised UAW leaders by saying: "They do not talk to each other or communicate properly, so I do not have the certainty that any agreement will be concluded soon. "

Contact Jamie L. LaReau at 313-222-2149 or [email protected]. Follow her on Twitter @Jlareauan. Learn more about General Motors and sign up for our automotive newsletter.