By on September 23, 2019

Image: UAW

General Motors seems ready to wait out any resistance to its contract offer by UAW-represented workers, though a prolonged strike could still hurt the company. With the strike by GM workers in the United States now entering its second week, the automaker’s vehicle inventory is healthy enough to weather days and weeks of picketing, but the same cannot be of the personal finances of many striking workers.

At this point, no one’s predicting a quick resolution.

Bargaining teams from both sides may well be making progress behind closed doors, though the situation on the ground remains the same as last Monday.

CNBC reports that GM went into the strike with 77 days’ worth of vehicles in its inventory, well above average for the industry. That’s a fleetwide average, of course, and some models’ reserves aren’t quite as healthy. GM has a 57-day supply of the Chevrolet Tahoe, said Michelle Krebs, senior analyst at Cox Automotive.

In preparation for a possible strike, the automaker pinned the production accelerator to keep dealers satisfied and provide the company with breathing room during a work stoppage at its plants, CNBC reports. This also allows GM to hold the line at the bargaining table.

While some analysts questioned whether production of the C8 Corvette, due to hit driveways next year, could incur a delay as a result of the strike, GM Authority shot down this possibility. Basically, the strike would have to go really long before timelines get tinkered with at Bowling Green.

The first GM customers to feel the impact of the strike won’t be those looking to buy new cars, but those looking to repair existing ones. Dealers contacted by CNBC claim parts shortages could crop up as early as next week if GM and the UAW remain deadlocked. Then there’s the issue of deliveries of new supply to those dealerships. Over the weekend, the International Brotherhood of Teamsters, though its president, Jim Hoffa, said the union would not deliver GM products from factory lots to dealerships — an act of solidarity with the striking UAW members.

Failure to procure a new vehicle for a customer could easily see GM lose sales to its rivals.

On the finance side, both sides are well prepared, with Stephen Brown, senior director of U.S. corporates at Fitch Ratings, telling Automotive News that GM’s $34 billion in liquidity will “help them weather a prolonged stoppage if that’s what it amounts to be.” Even losing $50 to $100 million a day, GM won’t come under real pressure for some time. As for the UAW, its strike fund, valued at $700 million, is doling out $250 in strike pay to roughly 46,000 workers a week. That’s about $11.5 million a week.

Still, it’s hardly a lot to get by on if you’re one of the picketing workers, and it’s made all the more worse by GM’s elimination of health coverage for striking workers. Speaking to media, many workers, while remaining determined in their bid to achieve their goals, expressed worry about how a long-running strike might impact their families.

[Image: UAW]

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26 Comments on “As GM-UAW Strike Enters Second Week, Both Sides Wait for the Other to Blink...”


  • avatar
    Fred

    GM is probably looking at this as a way to reduce their backlog. Then again those Christmas bonus are in jeopardy.

  • avatar
    ToddAtlasF1

    $250 a week sounds familiar. I think that’s what I was paid for a month of grand jury duty in NYC. Fortunately, I was living well within my means for the three years prior, or I’d have been unable pay my rent let alone pick up my dry cleaning, keep the power turned on, or wine and dine aspiring actresses. I wonder if UAW dues-payers remember the importance of planning for rainy days?

    • 0 avatar
      FerrariLaFerrariFace

      Not likely, otherwise they probably wouldn’t be striking at all. Reportedly their biggest issue is that GM is making tons of money right now and not sharing it with them. But with a recession looming, stashing money away for rainy day rather than immediately doling it out to the rank and file seems like a prudent thing to do.

      • 0 avatar
        SharkDiver

        What recessiion? Even the Dems have quit beating that drum in the face of overwhelming evidence to the contrary.

      • 0 avatar

        Tell that to our Government in California. They always spend as if there is no tomorrow. And Federales too. There Is No Tomorrow. We all will die in 11 years. According to Sacramento. Because of Climate Change. We All Will Die In 11 Years. So Everything Goes. Spend Like Crazy. Like There is No Tomorrow. Oh, No Tomorrow. We All Will Die. But I don’t want to be their fool no more. Open eyes, but you’re sleeping, you better wake up before tomorrow comes creeping.

  • avatar
    NoID

    The strike hurts them in other ways as well. For one, I presume most (if not all) of the mechanics, technicians, CAD designers, drivers, and other workers in skilled trades at their development facilities are union. Development of new product is undoubtedly taking a hit as the strike is prolonged, and that time isn’t easily recouped.

    • 0 avatar
      SCE to AUX

      I doubt it; office workers are rarely unionized.

      • 0 avatar
        golden2husky

        That is correct. Management (in general) has no leverage other than a good job market to support their cause. Right now it probably would not be too hard for quality managers to move around and get a boost in pay. When the job pendulum swings the other way all they will get is “be grateful you have a job”.

      • 0 avatar
        danio3834

        Build-shop and engineering mechanics are typically UAW. CAD/CATIA designers are typically contract or salaried. Drivers usually work for Roush for pennies.

  • avatar
    danio3834

    “Over the weekend, the International Brotherhood of Teamsters, though its president, Jim Hoffa…”

    Wat. I had to look this up. Turns out it’s Jimmy Hoffa’s son. Go figure.

  • avatar
    Tj21

    Feel bad for these employees. The older generation makes good wages, benefits but the younger is two tiered and make half. Gm had years of profits and built up inventory to screw the workers long term. I assume the employees just want job security with the general consistently offshoring jobs to Mexico and China. Hopefully they can secure future investment to stop the bleeding.

    • 0 avatar
      SCE to AUX

      Job security is the very last thing they’ll get from GM, Ford, or FCA.

      In fact, if GM meets their demands for more money and profit sharing, the company will only accelerate their plans to close domestic (high cost) facilities.

      By the way, the two-tiered wage system was implemented by the *union*, ensuring the tenured workers get to keep their pay rate. In order to stay alive, the union eats its own young. The latest money scandals are further proof of this – the rank-and-file have funded corrupt union officials at the top for years. Those guys don’t care about good stewardship of union dues.

    • 0 avatar
      thegamper

      I’m all for jobs and keeping them here but I just can’t support a system that basically guarantees a job and pensions and benefits and bonuses and raises and, and, and….

      Nobody should have to crunch the numbers to know that it’s unsustainable. The UAW will eventually be reaching into the taxpayer pocket again because nothing was learned in the 2008 bankruptcy.

  • avatar
    tomLU86

    Labor costs today are NOT as big a percentage of GM’s total manufacturing cost as they were 50 years ago.

    That 1977 Caprice, in addition to the body and engine, had seats, carpets, the muffler, the battery, the spark plug wires, the spark plugs–the vast majority of the car, except the tires (and glass) was made by GM, using UAW labor.

    Today, one third of GMs cars are assembled by non-UAW employees. What does GM make now? The bodies, and (usually / most of) the engine/trans.

    They BUY everything else. Just like most every automaker.

    So, since labor is a much smaller percent of cost, here is an easy, face-saving way for both parties:

    GM will agree to stop using temp employees.

    The UAW will agree to have UAW workers shoulder a higher percent of their health care. Say 10% (vs 2-3%, which is, like grandma’s Cutlass Supreme 350, a thing of the past).

    The loss of temps won’t cost GM that much, and remove an irritant.

    The raising of the worker’s health care will garner them more sympathy from other working American’s who often work more for less and no health care, and from white-collar Americans. It’s smart politics for the union. And it will save GM money (to offset the loss of temp workers).

    And finally, GM can agree to preserve X% output from the US. That’s not too hard, given the vast amount of investment GM has poured into ALL it’s facilities.

    After all, union workers did make some concessions to help keep the company afloat (with some ‘encouragement’ from the government, since the pre 2009 management and union were unable to get it together and the US had to intervene. Many of GM’s current leaders were pretty significant players in the pre-2009 regime…)

    Problem solved. Who will pay me my fee?

  • avatar
    thejohnnycanuck

    Fear not kids, no matter how long this lasts I’m certain that Mary’s bank account won’t suffer in the slightest.

  • avatar
    dal20402

    No incentive for either side to settle this one in a hurry.

    GM could use the inventory adjustment.

    The UAW international could use a few weeks of headlines that aren’t about corruption.

    As always with this union, too bad for the members. I’m a big fan of unions in principle, and many unions do what they are supposed to. The UAW is not among them.

  • avatar
    redgolf

    dal20402 – Why the UAW sarcasm? So a little leaven ferments the whole lump?

    • 0 avatar
      dal20402

      Corruption at the top completely wrecks the solidarity that is the whole point of a labor union. If I were a UAW member, I’d be trying to decertify the UAW and replace it with some other union (and, yes, that’s hard).

  • avatar
    Jeff S

    GM could probably hold out till the beginning of the year. The dealers have more than enough inventory. Agree about the UAW could make concessions on members paying more for health care and GM could drop using temporary workers. It wouldn’t surprise me if GM decided to not settle anytime soon.

  • avatar
    ToolGuy

    These companies take forever to go out of business…

    (especially when they keep getting coddled and protected and propped up)

  • avatar

    I am hearing now they are expecting the strike to go at least a 100 days.

  • avatar
    jkross22

    Once GM imports more cars to the US than what they make domestically, will it be then that UAW members walk out and simply not come back? Most vehicles imported from China are made by American companies.

    If I was a plant worker and was seeing all of this, at what point do you just say “f this, I’m leaving and going to work for VW or Honda or Toyota in the US?” GM doesn’t give a crap about you guys. They see you as expendable and easily replaceable by Chinese plants.

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