As you may or may not know GM’s 49,000 UAW workers have gone out on strike. It is not entirely clear to me why they are on strike. Is it possible that one of the reasons is the the workers are angry and don’t trust GM’s management? USA Today reports:
One person said GM has proposed that workers pay 15% of their health care costs, up from the current estimated level of 3% of health expenses. Another person familiar with talks said GM’s offer preserves current health care benefits at the same cost.
GM and Ford, which will negotiate with the union after a deal is struck with GM, each spend $1 billion a year on worker health care, which some industry observers consider unsustainable. The average U.S. worker pays about 28% of health care costs, according to the Center for Automotive Research in Ann Arbor.
“We have many unresolved issues,†Terry Dittes, vice president of the UAW GM department, said early Monday in an interview with Bloomberg. “It’s not just a couple of things. How long will this take? I can’t say.â€
Those close to the UAW believe it will be a long strike, perhaps lasting two to four weeks.
“People don’t realize how angry the workers are and that the health care proposal made them nuts,” said a person familiar with both sides who insisted on not being identified to preserve those relationships.
Others said the many unresolved issues could come together quickly if a few key issues get resolved.
GM took the unusual step Sunday of making public a version of what it said was its offer, which included $7 billion in investment and more than 5,000 new jobs over the four-year life of the contract, and an assertion that the company offered an improved profit-sharing formula and preservation of top-line health benefits.
Dittes said GM’s offer came to the union only two hours before Saturday night’s deadline, and had it come sooner, the strike might have been averted.
The American auto industry continues to practice something called “pattern bargaining” in which the UAW selects one company as a strike candidate, negotiates a contract with that company or goes on strike against it, and then secures similar contracts with the other companies. The intention of the practice is pretty clearly to prevent the auto companies from competing with each other on the basis of workers’ wages.
It’s a dinosaur, a relic of a bygone age when the auto industry’s entire supply chains were located in the United States. The industry’s supply chains reach all over the world now with much of it coming from Japan and South Korea. That’s beyond the reach of the UAW.
Engines for small cars are not manufactured in the United States. Batteries for electric cars, their largest cost components, aren’t manufactured here, either. I know that Tesla claims their batteries are made here but I’m skeptical. I think they’re made in Japan by Panasonic and assembled here.
Whatever the case a lengthy strike is bound to spill over into presidential politics. Even though the auto industry isn’t as important to the American economy as it used to be and what’s good for General Motors may not be good for the U. S. A., the UAW still swings a lot of weight.
Note that this strike highlights a point I’ve been making here for well over a decade. Most Americans have health care insurance. That was true in 2009, too. Their biggest concern is the cost of health care not coverage but the driving force in policy including “Medicare For All” is coverage. For cost control they are relying on a syllogism which may or may not be true. They have no Plan B.
They may not be happy with management. Not my favorites either. They should be upset with their thieving union leaders. In any event they are not likely to win the hearts and minds of the general population with their relatively gold plated comp package. That’s obviously why GM published it.
This is an illustration of how unions shot their dicks off and lost membership and influence in prior years. If I was a union guy I wouldn’t be taking my critical career cues from a union leadership under widespread investigation for self dealing.
“workers are angry”
Scared is more like it, most don’t have the savings for a four week walkout. The only time I went on strike the union President called a meeting, walked in with a .handful of papers that he slammed on the podium, and roared: This proposal is bullshit! We’re going to vote it down, and then vote strike, and I want it unanimous to send a message!
Well, I didn’t know exactly WHY we were going on strike, the peer pressure is enormous, plus I reasoned the quickest way to end the strike was solidarity. A strike by half the workforce could fizzle, and last a long time. Ours lasted one day.
Later we found out the union really struck concerning the duration of the contract, trying to synchronize contract dates with other bottling plants they represented to increase bargaining power. But that’s not what they told membership beforehand.
GM has to appease the UAW, not their workers. But then they know that.
You raise a very good point, Guarneri. The UAW leaders are in desperate need of demonstrating how necessary they are and a labor action that results in the membership getting everything they want would be a good way of doing that.
The UAW leadership is under investigation for corruption. Duh, union leaders corrupt! That’s a good one! Nonetheless, there are those who believe indictments may be around the corner, and this strike may be more of a beneficial distraction than a call to “help†workers. Plus, the salary of striking workers will be paid for by GM, not out of some union funding, at a significantly lower wage. So, it’s the workers not the leaders who have the most to lose from this strike.
And the implicit point, which you obviously got, is that the union leadership would sell their members down the river in a heartbeat to save their own skins.
I’ve seen this movie before, first hand. It’s a shame.
https://www.cnbc.com/2019/09/12/uaw-leader-charged-with-embezzling-union-funds-amid-contract-talks-in-detroit.html
This guy is just as bad as that California congressman. What is it about golf that drives people to commit crimes just so they can play?
Steve
Hard to separate the interests. A strong union leadership is good for the members in general, if not in particular cases. Unions really can’t get large pay increases anymore because the companies cannot pass these costs on. Their customers are large and have bargaining power of their own. We’ve all heard of companies like Coors brewery treating their employees so well they vote unions out, but if their competitors, (Anheuser Busch) weren’t union, they couldn’t afford that.