Why the strike lasts so long

Wednesday is the tenth day of the United Arab Emirates strike against General Motors. Costs have gone up, thousands of workers from Canadian suppliers and factories have been laid off. No agreement in principle has yet been signed.

Negotiators met until late Tuesday and resumed work Wednesday morning with sub-committees at all levels, journalists close to the free press talks said. Negotiators meet daily, even on weekends. Progress has been made on Tuesday and some of the discussions say the negotiations seem to intensify.

A resolution would be welcome from both sides – the strike is the longest UAW since 12 days against Chrysler in 1985.

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So what does it mean? It takes so long to reach an agreement?

Just like trying to gauge the deliberations of a jury, no one really knows it, say two former union negotiators for the Detroit Three. One thing is certain after 10 days of talks ending in the evening recess:

"This indicates that they do not agree with each other," said Art Schwartz, former GM General Manager of Labor Relations. "I do not think there are a lot of problems, but the problem of temporary workers is difficult and that of factories is another."

Go home every night

Schwartz refers to GM's decision last fall to idle four of its US plants: Detroit-Hamtramck, Lordstown Assembly in Ohio, a transmission plant in Warren and one in Baltimore.

With regard to the problem of temporary workers, the UAW wants a way to make them permanent and give them better benefits along the way. Temporary workers represent about 7% to 10%, or 4,100 of GM hourly workers in the United States. They often do the same work as permanent workers, but with lower pay and benefits, and can be classified as temporary jobs for many years.

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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.

GM says its total compensation, including the benefits of its hourly employees, averages $ 63 / hour. According to the Center for Automotive Research, Honda, Nissan and Toyota have a total cost of about $ 50 an hour for US workers. Japanese automakers generally employ more temporary workers than the three in Detroit.

Faced with these hot issues, with UAW members wanting a higher pay rise than GM initially proposed, or 2%, a late resolution ahead.

"You are saying that they are about to reach an agreement, that is when they do not go home at night," Schwartz said. "The settlement will usually take place in the middle of the night."

"Symbolic gesture"

Schwartz retired in January 2010, but spent 24 years working for GM and negotiated seven national contracts. Schwartz stated that he had participated in discussions during which discussions had been held all night for several nights in a row. "It's not fun."

He has been following these recent negotiations closely and noted that they were atypical from the beginning. On the one hand, GM's detailed public statement on what it had originally proposed to the UAW two hours before the expiry of the contract on September 14 was "unusual", did it? -he declares.

But he was not surprised that GM stopped paying health care for striking workers, handing over responsibility to the union's strike fund.

"The contract has expired and there is no obligation to pay for health care," Schwartz said. "They knew that the UAW would take it, it would not hurt the members, they are crazy, but they are more symbolic than eventful."

The union also said it was frustrated to have made concessions a decade ago as GM headed for bankruptcy and was trying to come back. He added that the workers had never recovered these losses even though the company recorded tens of billions of profits.

Schwartz worked on the 2007 national negotiations between GM and the UAW when the two-tier pay system was put in place. He also worked on the negotiations in 2009 when GM went bankrupt. He added that the union had made concessions, such as the abolition of the job bank and the removal of a living cost allowance. But "No one has suffered a pay cut, a reduction in health care or a pension, and it's extraordinary in a bankruptcy."

The UAW hit GM for two days in 2007, but that strike was nothing like the strike, Schwartz said.

"There seem to be problems for which members are unhappy," said Schwartz. "GM hoped to be able to continue negotiating and not strike this time, of course, but the union members were in that mood, they are upset by a lot of things and a strike is the result."

Appearance of Sanders

Meanwhile, Democratic presidential candidate Bernie Sanders appeared in Detroit-Hamtramck.

The crowd outside the factory, near I-94, grew when the Vermont senator arrived and crossed the picket line, just like the Senator Elizabeth Warren, also presidential candidate, Sunday.

Sanders hoisted a red and white "UAW on Strike" sign as UAW members, media and spectators hurried to get a glimpse.

Pain

The longer the strike lasts, the more pain there is on both sides and ultimately the community. Schwartz recalled the 1998 UAW strike that cost GM $ 2 billion. He added that the company could try to compensate for this loss of production in overtime after the end of the strike, but it is also expensive. The current strike will hurt GM's financial results in the third quarter, he said.

The former contract negotiator for Fiat Chrysler Automobiles, Colin Lightbody, did the math on the stakes for GM. He estimates that the annual savings on labor costs will be about $ 500 million.

Lightbody was director of the FCA's labor economics until his retirement in 2018. He is now president of HR & Labor Guru Inc., a consulting firm in Windsor. He spent 20 years at FCA and participated in five national negotiations in the United States and seven in Canada with his self-employed unions.

Lightbody said, looking at these negotiations and the long strike: "There does not seem to be an urgent sense of success, and normally at this time you would be working after 8 pm That's like the two pairs. With such a long strike and the imminent countdown, you combine the power of the brain to find a solution at this point and it does not seem to be the case, so that indicates that they are pretty far away. one of the other. "

This is partly because there is a lot of money involved. Lightbody said that GM employs 47,000 people at the time, which figure it uses. The UAW and GM said at the start of the strike that this figure was 46,000 people. These workers work an average of 2,000 hours a year, or about 100 million hours worked per year, said Lightbody.

If GM wants to assign 20 to 25% of agency workers to a new task force and increase the amount that workers pay for health care by 15% to 15% now, that would be at least $ 5 an hour reducing GM's labor costs to improve productivity. competitiveness with Honda, Toyota and Nissan.

Sources close to GM 's initial offering to the UAW said that GM was proposing that union members pay 15% of the total cost of health care, up from 3% currently, and that the government is not going to pay for it. UAW rejected it. GM then resumed the offer at 3%.

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

"I do not believe that the UAW would reach the 15%, but there are less intrusive ways to reduce health care costs, which would translate into tens of millions of savings for society" , said Lightbody, particularly in terms of mandatory management of the disease or "wherever you encourage employees to be better consumers of health care."

"The things GM resists, the temporary staff and the health care, if it's really two things … a combination of these things could save $ 5 an hour, that's 500 millions of dollars a year, "said Lightbody. It's a lot of money and that's why GM is ready to hold on. "

Some analysts have estimated that it would cost GM between $ 50 million and $ 100 million a day to stop production, which equates to $ 500 million after a 10-day strike.

"At one point, GM could say," Well, we'll cut the bait and settle, "Lightbody said," The UAW will win the battle, but lose the war because GM will cut costs in a variety of ways and that may involve to replenish production over time and to use less manpower in the process. You must keep competitive labor costs. If you do not do it, then the cost of the labor is too high, you must reduce the number of employees you use or move your production. So, they can win the battle, but I do not think they will win the war. "

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.