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Sept. 16, 2019, 12:11 a.m. EDT

Nearly 50,000 GM auto workers go on strike for first time since 2007

Contract expires with both sides far apart on negotiations; talks set to resume Monday

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By Associated Press

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GM has factories in Michigan, Ohio, New York, Kentucky, Tennessee, Texas, Missouri, Indiana and Kansas.

A strike would bring to a halt GM’s U.S. vehicle and parts 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.

Analysts at Cox Automotive said GM has enough vehicles on dealer lots to last about 77 days at the current sales pace. That’s well above the industry average of 61. But supplies of the Chevrolet Tahoe and Suburban large SUVs, which generate big money for the company, are well below the industry average.

The talks this year have been overshadowed by a growing federal corruption probe that snared a top union official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged 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 UAW President Gary Jones led before taking the union’s top office last year. Jones himself has been touched by the investigation, leading some union members to call for him to step down, but he hasn’t been charged.

This year’s talks between the union and GM were tense from the start, largely because of GM’s plan to close four U.S. factories, including the one on the Detroit border with the enclave of Hamtramck, as well as Lordstown and factories in Warren, Michigan, and near Baltimore.

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 slated to close. GM currently has too much U.S. factory capacity, especially to build slower-selling cars.

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

• Union members have great health insurance plans and workers pay about 4% of the cost. Employees at large firms nationwide pay about 34%, according to the Kaiser Family Foundation. Automakers would like to cut costs.

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