UAW-GM Strike: Day 23 and Counting

GM submitted another contract proposal to the UAW on Monday morning and talks were expected to resume on Tuesday.

The UAW is seeking assurance that traditional vehicles will continue to be built in the United States. GM’s CEO Mary Barra plans to move the company toward an all-electric future, positioning GM as a technology company. Workers are concerned that electric vehicles will need fewer parts and less manpower to assemble, according to the Detroit Free Press.

GM says it will invest $7 billion in the U.S, adding 2,700 jobs and preserving 2,700 others. The company says the investment will include keeping a Detroit plant open and building an electric battery manufacturing facility near the Lordstown factory in Ohio.

Sources close to the talks say that negotiations are stymied over an additional three issues: temporary workers, apprentice programs for skilled trades and a shorter time for in-progression workers to reach top pay.

Strike Impact Broadens

The strike has shut down 34 General Motors plants in the U.S., and GM has idled several plants in Canada and Mexico that supply parts to U.S. assembly facilities. On Monday, GM closed the TM Ramos Engine plant in Ramos, Arizpe, Mexico, laying off another 415 employees.

About 48,000 GM workers are receiving strike pay of around $250 per week, a far cry from their usual wages. Less take-home pay means those workers are spending less in the economy and paying fewer taxes. Even restaurants in areas that serve the auto industry are seeing a reduction in customers.

The strike has extended its reach into the shipping industry, with truck companies like Phoenix Transit & Logistics in Dearborn, Mich., laying off almost its entire staff, including 80 drivers. Nearby Flint has lost an estimated 1,200 truckers and auto supply workers due to the strike. Similar stories of layoffs are reported across the region.

The Original Equipment Suppliers Association reports that over 100 automotive supplier companies have had temporary layoffs affecting 12,000 U.S. hourly and salaried workers.

“Given the low U.S. unemployment rates and shortage of skilled trades workers, companies may be challenged to ensure laid-off employees return to their previous positions,” said OSEA CEO Julie Fream in a statement to the Detroit News. “Upon conclusion of the strike, this could cause extended disruption in the supply chain as suppliers ramp up their production.”

The auto industry is a key market for U.S. steelmakers and GM production represents about 5 percent of annual domestic steel demand. The slowing of the auto market is already a concern for steel producers and a prolonged strike would further impact order books.

LMC Automotive estimates that, as of Oct. 2, 188,000 fewer vehicles were produced by GM. General Motors said that dealers had 760,000 vehicles on the lots at the end of September, a 5 percent decline from a year ago. Availability issues are already cutting into customer orders.