By on October 18, 2019

gm

As the UAW-GM strike closes out its fifth week, workers now hold the power of determining when it will end. Late Thursday, the UAW National General Motors Council recommended ratification of the tentative agreement forged a day earlier, tossing the ball into the workers’ court.

While the strike continues, some members claim they’ll reject the contract unless GM reopens mothballed assembly plants — an unlikely scenario, given that the suddenly thrifty automaker has already reversed course on the closure of Detroit-Hamtramck. That plant is now tapped for GM’s Ford-fighting electric pickup.

In a release, the UAW says the ratification process will kick off October 19th, with voting ending on the 25th.

“Ultimately, UAW members will make the decision to ratify the agreement. Their unity and solidarity brought us to this moment,” said UAW Vice President Terry Dittes in a statement.

The tentative agreement delivers a number of desired perks for UAW members, including increased pay, lump sum payments, and signing bonuses, plus status quo health care and a pathway to full-time hourly status for temporary workers. It also keeps Detroit-Hamtramck, currently home to the Chevrolet Impala and Cadillac CT6, open for business, pending arrival of the EV pickup.

That’s not good enough for workers cast out of Lordstown Assembly earlier this year. Workers ousted from the shuttered Ohio plant want to see more domestic-built product and a reduction in Mexican assembly, vowing to shoot down any contract deal until their demands are met. As the Detroit Free Press reported Thursday, they made their feelings known to UAW brass at GM’s Renaissance Center HQ.

In response, GM pointed out two initiatives not covered under the tentative agreement. “Projects planned for the Mahoning Valley include the opportunity to bring battery cell production to the area, which would create approximately 1,000 manufacturing jobs, as well as the sale of the GM Lordstown Complex to Lordstown Motors Corp., a new company that plans to build electric pickups for commercial fleet customers,” the automaker stated.

That company is a venture partially owned by Workhorse, a fledgling Ohio manufacturer we’ve covered in the past. Currently unprofitable, Workhorse aims to buy the plant and initially employ 400 workers. That’s far less than Lordstown employed even with a single Chevrolet Cruze shift.

As for Detroit-Hamtramck, GM proposes a $3 billion investment, Automotive News reports. It’s a hefty chunk of the total $9 million plant investments listed in the tentative agreement, with the money going to support production of electric pickups, vans, and battery packs.

[Image: General Motors]

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23 Comments on “UAW Leadership Gives GM Agreement the Thumbs-up; Workers to Decide Whether to End Strike...”


  • avatar
    28-Cars-Later

    “It also keeps Detroit-Hamtramck, currently home to the Chevrolet Impala and Cadillac CT6, open for business, pending arrival of the EV pickup.”

    Oh, really?

    • 0 avatar

      This is interesting since the CT6 and Impala,along with the Corvette, are GM’s best vehicles.

      • 0 avatar
        Lorenzo

        The Impala and CT6 are GM’s best-built, but not best-selling. That’s the rub. If they were willing to put some money into more distinctive styling, as well as some old-fashioned advertising, that might change. There’s no indication they’ll do either one anytime soon.

      • 0 avatar
        28-Cars-Later

        I’m sure part of it was a learning exercise but I don’t get the purpose of the CT6. The model sells so few copies even at high margin I can’t see it justifying its own R&D costs.

        2016 9,169[30]
        2017 10,542[31]
        2018 9,668[32]

  • avatar
    Detroit-X

    November 2018: “General Motors believes its core business will remain its core business for decades to come. In a Friday report from the Detroit Free Press, Mike Abelson, GM’s vice president of global strategy, said electric and self-driving pickups like the Chevrolet Silverado are not on the table. “The core business is going to be the core business for a couple of decades to come,” said Abelson. “There will not be any AV/EV pickups.” AV stands for “autonomous vehicle, and EV stands for “electric vehicle.”

    Is it any wonder GM inspires such ridicule? They lie, and spin, and mislead, and deflect, … all of which is not lost on the stock analysts.

    • 0 avatar
      Lorenzo

      Mike Ableson WAS the VP of Global Strategy in 2018. He is NOW in charge of Electric Vehicle Charging and Infrastructure. His new job is to expand the charging infrastructure for electric cars, now considered the biggest bottleneck in public perception of electric cars. GM changed its tune on electric cars, and Mike is now singing that different tune.

      That should keep the stock analysts happy – until they see how limited the market for electric cars really is, and how it will affect GM’s all-important bottom line. Those stock analysts are clueless about industrial manufacturing, and downgrade all auto stock prices for failure to achieve high returns like the vaporware companies. That’s why manufacturing companies are placing less emphasis on satisfying stockholders and analysts.

      • 0 avatar
        Detroit-X

        I have more faith in the stock analysts, than the insubstantial yes-men/women at GM.

        It all can easily boil down to this: GM can’t even compete with Toyota Corolla. They can’t even get the basics of a basic segment right. And GM is not even smart enough to know the significance of this fact, nor is GM smart enough to care, nor do they even know what the problem is.

        • 0 avatar
          tomLU86

          Stock analysts are like infotainment.

          GM and the domestics in general can’t ‘compete’ with the Toyota Corolla because in part their cost structures are higher. Blue-collar (UAW) and white-collar workers make more than Toyota and work less.

          GM and Ford had the talent and resources to compete, but they choose to forego the ‘low profits’ of Corollas, either like GM by abandoning the segment, or like Ford, by putting cheap transmissions that have destroyed Ford’s small-car reputation. Sad.

          The non-US companies benefit from an innate culture of scarcity that imbues them with the need to make the most with a little.

          Here in the big PX, where people drive trucks and SUVs that get 13-17 mpg in real life because they can, that sense is lacking.

          • 0 avatar
            Detroit-X

            GM and the domestics do not have the corporate culture to structure the business to compete, is how I would phrase it, and the blame for that starts at the top of the org-chart. Every business, brand, or subsidiary GM sold has done better without them. I mean… Honda makes weed-whips!

        • 0 avatar
          schmitt trigger

          I would like to modify your statement: “GM is not even smart enough to know…”
          with a more accurate one: “GM’s executives are not even smart enough to know…..”

  • avatar

    They will strike.

  • avatar
    tomLU86

    It’s as good a deal as the UAW will get. They should take it.

    It’s not what GM wanted. It will cost GM more than anticipated.

    But GM’s position was compromised by the fact that it announced four plant closure in November 2018.

    It was also compromised by what many (in general) perceive as excessive executive compensation. “If you can make that much, then we should be able to make this much.”

    But, here is the irony: the UAW wants internal combustion engine (ICE) products. It would be ironic if the UAW ultimately saves GM from the highly likely debacle associated with electric vehicles.

    If/when electric and vehicles can make it on their own, people will use them. But that could be a long time, if ever.

    The federal govt will have to force people away from ICE. That can happen 2 ways: coercion, with consequences at election time, or incentivizing electric. This would cost big money. Where will it come from? Taxes? More borrowing? Not good.

    So, by insisting on ICE, this agreement while costly to GM, may just have saved the company.

    As to the closed plants, GM mgt is responsible. Hamtramck: GM builds a great car (Impala), then overprices it, it doesn’t sell. So they don’t modernize it. Yet the delusion express and the sycophants near the top said “yes, this is good, we will build it in TWO plants, not one” Just doubled your fixed costs, as you killed your sales volume. Who lost their job over this debacle?

    Lordstown–did GM lose money on the Cruze? I doubt it. It just didn’t make enough. Tomorrow, if gas prices spike, is GM going to re-import them from Mexico? Even so, they can only make so many. Bad call.

    The future will belong to more fuel-efficient ICE vehicles. That means SMALLER vehicles. And GM has all but vacated that space. They need to get back in it ASAP.

    • 0 avatar
      SCE to AUX

      “incentivizing electric”

      The Federal and state governments have been doing this for a decade. GM, right after Tesla, has exhausted the incentives with the Volt and Bolt. So any future EVs from these companies will compete against other mfr’s vehicles that remain incentivized.

      Along with you, I’m not sure there is an appetite for new incentives.

    • 0 avatar
      Robotdawn

      I see it the opposite. Other than changing the numbers a bit, GM got everything they wanted. And the Union should still take it. It’s a good deal.

      Giving only 2 real raises over 4 years, yes 3% vs 2%, but still there is 2 years with no pay raise. Big win over time. One time payments, even strike and profit sharing mean very little as a going concern. Base pay matters.

      Acknowledging GM closing 3 plants. D-Ham will be open, but what will they build until this mythical electric truck appears? Could GM use this plant as leverage with GM Korea and those strikes?

      Investment of $9B, which was probably already planned. Everything GM had negotiated with local plants this year was pending this agreement. And $3B of that is at D-Ham.

      The 8,000 “new” employees is “create or retain”, which means nothing. Quicker path to permanent employment just means GM will lay those temporary workers off quicker, so they don’t attain that status.

      At least the workers aren’t paying more for health coverage, wish any of us could say the same.

      • 0 avatar
        highdesertcat

        GM is still hoping to regain market share. But what is the reality of such an optimistic forecast? Nil, IMO.

        What I predict will happen with GM is

        1. continued decline in market share in North America thru 2025
        2. continued plant closings of slow-selling lines thru 2025
        3. reduction in UAW employees through retirement and attrition
        4. redirection to purpose-built vehicles like BEVs NLT 2021
        5. hiring of higher-educated tech workers starting yesterday
        6. a shortened implementation time-line of within 5 yrs, by 2025

  • avatar
    Jeff S

    @highdesertcat–Agree and I will add more automation and more overseas manufacturing. In the short term the union won in the long term GM wins. Regardless of the outcome of the strike these things are going to happen. The UAW will continue to dwindle down to nothingness and GM will continue to shrink.

    • 0 avatar

      GM is very close to 15% market share in the US.

      • 0 avatar
        highdesertcat

        akear, I would be surprised if 15% market share in the US would keep GM afloat. More likely would be that revenue brought in from overseas markets coupled with reduced operating expenses assembling in Mexico and China is what’s keeping the lights on at GM these days.

        Like Jeff S, I’m a proponent for more robotics and automation wherever possible to displace UAW members.

        Robots are a lot more productive than UAW members, cheaper to employ, require no healthcare or benefits, demand no retirement check, take no breaks or sick leave, and can work around the clock.

      • 0 avatar
        ToolGuy

        akear,

        I was looking at GM’s U.S. market share the other day. Rick Wagoner’s lapel pin read “29” – wasn’t so long ago.

        Globally, the story is at least as bad (around 7% of ‘production share’).

        GM is down to 4th place in the “world’s largest automakers” list.

        For years, GM was number 1 on the Fortune 500. It is no longer in the top ten (number 13 as of 2019).

  • avatar
    Jeff S

    The UAW is fighting a losing battle with more overseas production and more robotics. My nephew is a manager at one of the largest Amazon warehouses which is located near CVG in NKY and he tells me about how advanced the automation in his warehouse is. Manufacturers will spend the money to buy the latest and greatest robotics because overall the savings from the efficiency far outweigh the costs. Even offshore plants with cheaper labor reap greater savings and efficiencies from more robotics. Eventually the robotics will make most factory jobs including those in automobile assembly plants obsolete.

  • avatar
    Jeff S

    HDC–Also agree that that the implementation time from design to production will need to be shortened. Actually 5 years is too long to react to market changes. Plants will need to be more adaptable and react quicker to shifts in the market.

    • 0 avatar
      highdesertcat

      Jeff S, I believe that Toyota has the design philosophy of “If it works, don’t redesign it.”

      This seems to apply mostly to their mechanical and running gear which carry on unchanged year after year and decade after decade.

      What gets long in the tooth with Toyota products is the exterior and interior styling. OTOH, the gaping maw styling of their vehicles today don’t do a thing for me. And yet, this repulsive styling continues to maintain its retained value in the used car market place.

      Most people looking to buy a used Toyota product are stunned by what they cost. Comparing similar products from GM, Ford, Fiatsler, Nissan, BMW, VW, and others, their retained value is the pits.

  • avatar
    Jeff S

    @highdesertcat–That is Toyota’s philosophy but not all car manufacturers. Since you mentioned Toyota my neighbor bought a new 2019 Rav4 FWD and sold me his Lacrosse. His Rav4 is not nearly as nice as our CRV but he is happy. I noticed the interior of his Rav4 has more hard plastics and there are more gaps than our 2013 CRV. Toyotas are reliable but I would rather have a Honda–just my preference. My wife and I love the Buick.

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