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UAW contract with GM expires, increasing risk of strike

Posted: 6:48 AM, Sep 15, 2019
Updated: 2019-09-15 06:48:38-04
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DETROIT (AP) — The four-year contract between General Motors and the United Auto Workers has expired as negotiations on a new deal continue.

Union officials told GM they would let the contract lapse just before midnight Saturday, increasing the risk of a strike as early as Sunday night. Union members working Sunday were to report as scheduled.

But there was a wrinkle. About 850 UAW-represented janitors who work for Aramark, a separate company, went on strike Sunday after working under an extended contract since March of 2018, the union said.

The strike covered eight GM facilities in Ohio and Michigan. Although UAW workers at GM are supposed to work, it wasn't clear early Sunday whether the rank-and-file would cross their own union's picket lines. GM said in a statement that it has contingency plans for any disruptions from the Aramark strike.

UAW Vice President Terry Dittes said in a letter to members that, after months of bargaining, both the union and GM are far apart on issues such as wages, health care, temporary employees, job security and profit-sharing.

The union's executive leaders and a larger group of plant-level officials will meet Sunday morning to decide the union's next steps.

The letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.

"While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard working Americans ahead of their record profits," Dittes, the union's chief bargainer with GM, said in a statement Saturday night.

Kristin Dziczek, vice president of the Center for Automotive Research, an industry think tank, said the union could strike at GM after the contract expires.

"If they're not extending the agreement, then that would leave them open to strike," she said.

But GM, in a statement Saturday night, still held out hope for an agreement, saying it continues to work on solutions.

"We are prepared to negotiate around the clock because there are thousands of GM families and their communities - and many thousands more at our dealerships and suppliers - counting on us for their livelihood. Our goal remains on building a strong future for our employees and our business," the GM statement said.

A strike by 49,200 union workers would bring to a halt GM's U.S. production, and would likely stop the company from making vehicles in Canada and Mexico as well. That would mean fewer vehicles for consumers to choose from on dealer lots, and it would make it impossible to build specially ordered cars and trucks.

The union's executive board was to meet early Sunday to talk about the union's next steps, followed by a meeting in Detroit of plant-level union leaders from all over the country. An announcement was scheduled for after the meetings end.

If there is a strike, it would be the union's first since a two-day work stoppage at GM in 2007.

The move by the union also comes as it faces an internal struggle over a federal corruption investigation that has touched its president, Gary Jones. Some union members are calling for Jones to step down while the investigation continues. But Friday night, union leaders did not remove Jones.

Union officials surely will face questions about the expanding investigation that snared a top official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It's the same region that Jones led before taking the union's top office last year. Jones has not been charged.

On Friday, union leaders extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors was still set to expire Saturday night.

The union has picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company, meaning it's the focus of bargaining and would be the first company to face a walkout. Picket line schedules already have been posted near the entrance to one local UAW office in Detroit.

Talks between the union and GM were tense from the start, largely because GM plans to close four U.S. factories. The union has promised to fight the closures.

Here are the main areas of disagreement:

— GM is making big money, $8 billion last year alone, and workers want a bigger slice. The union wants annual pay raises to guard against an economic downturn, but the company wants to pay lump sums tied to earnings. Automakers don't want higher fixed costs.

— The union also wants new products for the four factories GM wants to close. The factory plans have irked some workers, although most of those who were laid off will get jobs at other GM factories. GM currently has too much U.S. factory capacity.

— The companies want to close the labor cost gap with workers at plants run by foreign automakers. GM's gap is the largest at $13 per hour, followed by Ford at $11 and Fiat Chrysler at $5, according to figures from the Center for Automotive Research. GM pays $63 per hour in wages and benefits compared with $50 at the foreign-owned factories.

— Union members have great health insurance plans but workers pay about 4% of the cost. Employees of large firms nationwide pay about 34%, according to the Kaiser Family Foundation. The companies would like to cut costs.