Strike risk of auto workers increases and GM's contract expires at midnight

General Motors is trying to avoid its first failure in a dozen years if negotiations between the car manufacturer and United Auto Workers do not lead to a new contract before the expiry of the current agreement at midnight Saturday.

If the disputed discussions become positive, the current agreement could be extended temporarily, although an 11-hour deal seems unlikely at the present time.

"No one wins with a strike," Yahoo Finance Rebecca Lindland, automotive analyst and founder of RebeccaDrives.com, told Yahoo Finance. GM says, "We are facing competitive pressures. "They actually found a lot of jobs for workers in factories that have to close, so they feel like they've done a lot of work for the union, and the union says," But we want more. "

Any deal between GM and the UAW will set the tone for contract negotiations with the three largest automakers of Detroit, Ford and Fiat Chrysler, she added.

Much has changed since the last round of negotiations between the UAW and GM in 2015, with the auto industry being one of the most affected by the Trump administration 's trade war with the United States. China and the emergence of new competitors from Tesla to Rivian and Waymo.

Perhaps the biggest hurdle is the fact that GM has idle four factories in Michigan, Maryland and Ohio, which the union has pledged to fight at all costs. The members of the trade union also want a salary increase that starts between 17 and 30 dollars per hour under the existing contract.

General Motors employees build a crossover SUV at the assembly plant at GM Lansing Delta, Michigan, in March 2010. (Photo by Bill Pugliano / Getty Images)

UAW members want to keep their plum health coverage, which requires them to pay only 3% of their fees. In comparison, the average US labor force pays 28% and auto workers, unrepresented in the UAW, pay between 20% and 30%, according to the Henry J. Kaiser Family Foundation.

"Health care alone is not only the most expensive per hour benefit, but also the most substantial increase in costs from one year to the next," said Kristin Dziczek, Vice President of the Center. for Automotive Research. the website of the organization Monday.

GM and other automakers are striving to bring the benefits and wages of union members closer to those of non-members.

On average, GM pays its workers an average of $ 63 per hour, the highest of the three major manufacturers. Ford pays $ 61 an hour and Fiat Chrysler $ 55. Non-unionized US factories of foreign manufacturers earn an average of $ 50 an hour.

"In a time of high profitability, automakers are seeking to contain rising labor costs while the UAW is seeking economic gains and protecting the jobs and future revenues of its members" added Dziczek.

With such disparate demands, the specter of a strike after 23:59. On Saturday night, the room is big.

In fact, the UAW is already planning to order GM maintenance employees to leave their jobs this weekend, as the union's contract with maintenance service provider Aramark must expire at the same time than the deal with GM.

The slowdown in US vehicle sales and a federal multi-million dollar bribery probe involving the UAW's top leaders, including President Gary Jones, further spoiled this year's talks .

"This is additional pressure for a strike, so members say," Who are you really negotiating for? Lindland said. "This scandal is actually putting more pressure on better representation.For union members, better representation means a strike and securing a better contract."

The UAW has also made expansion of employment a priority, as the union's goal of increasing its membership is a point of contention with GM's GM.

While Fiat Chrysler and Ford have significantly increased the number of unionized workers represented on their payroll in recent years, GM has not followed suit, opting for a reduction in US passenger car production and its increase in Mexico. GM's increasing reliance on temporary workers, who receive far fewer benefits and lower wages, also disrupts the talks.

If contract talks continue to stagnate, a walkout may be inevitable. Union action would probably be short term, however, and would not affect potential car buyers.

"Right now, we have a good amount of inventory at resellers. Consumers should not feel the effects of their consequences, "said Lindland. "We will begin to feel an impact if it continues, and as a result, we do not send vehicles to dealer lots."

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