Jeff Rathburn of Local 598 and a material driver inside the GM Flint Assembly Plant talks about the strike. Eric Seals, Detroit Free Press
General Motors CEO Mary Barra met Wednesday with top UAW officials, injecting renewed energy into negotiations to end the union’s 25-day strike against the Detroit automaker.
Barra met for about an hour with UAW President Gary Jones and GM Department Vice President Terry Dittes, who is the union’s lead negotiator in talks with GM. One person familiar with the broader talks said the meeting appeared “to inject new life into the negotiations.”
After the discussion, bargainers in subcommittees met until about 3 a.m. Thursday before recessing and resuming talks midmorning. Later Thursday, negotiators were “talking at all levels,” people familiar with the negotiations said.
Wednesday was the first late-night work session since the union went on strike at 12:01 a.m. Sept. 16, said people close to the talks who spoke on the condition of anonymity.
The late night is a positive sign, but not assurance that a tentative deal is imminent. Despite the subcommittee work, top bargainers did not reconvened at the main table Thursday morning.
This is the fourth week since 46,000 GM union workers went on a nationwide strike. On Monday, GM made a new contract proposal to the union. Those close to the talks said the union was still working on responding.
Union rally scheduled
Separately, the UAW will hold two rallies Friday at GM’s Tech Center in Warren from 5-9 a.m and 3-6 p.m.
GM spokesman David Barnas said, “Employees at all GM sites have the option to adjust their schedules to other locations if they feel uncomfortable or unsafe due to the UAW work stoppage.”
Colin Lightbody, a former labor negotiator for Fiat Chrysler Automobiles, said the long session appears to be a step in the right direction, but not a slam dunk.
“It’s usually the main table you want to see go deep into the evening,” said Lightbody. “But the fact that subcommittees are meeting into early morning hours is a good sign.”
Lightbody was FCA’s director of labor economics until he retired in 2018. He is now president of HR & Labor Guru Inc., a consulting firm in Windsor, Ontario. He spent 20 years with FCA and worked on five national negotiations in the United States and seven in Canada with its autoworker unions.
“It’s my understanding that the UAW has not responded to GM’s latest contract offer that was tabled on Monday morning. At this stage of the game, one would expect that if the parties are closing in on a deal that offers and counteroffers would be traded every few hours, not every few days.”
He said he’s remaining positive because “at least the two parties are still talking.”
Driving the talks
The meeting involving Barra, Jones and Dittes, which was first reported by the New York Post, was at around 3:30 p.m. Wednesday at the Renaissance Center in a conference room near Barra’s office. Negotiations are being held at the RenCen in space outside GM’s offices.
A person familiar with talks said the Post report erred in saying GM officials “abruptly pulled out of meeting” Tuesday about job security and building more product in the United States.
Barra’s motivation to try to push for a resolution could be rooted in Wall Street concerns.
The UAW strike may force credit raters to move the company closer to junk status, according to Bloomberg Intelligence.
The strike has passed the two-week threshold that raters including Moody’s Investors Service and S&P Global Ratings had said posed downside risk.
In an Oct. 9 report, Bloomberg Intelligence analyst Joel Levington wrote that the “fuse is burning” for ratings that, in Moody’s case, are just one notch above junk.
Last week, Moody’s said it was considering downgrading GM bonds to junk status. That rattled some because it means “GM would have to pay higher interest on borrowing, and that is a real cost to continuing this strike,” labor scholar Harley Shaiken said in a previous Free Press interview.
GM’s bonds have barely moved, while its stock is down a bit more than 10% from its pre-strike level.
More: Key sticking point: GM and UAW at odds over what will be made in America
More: UAW says GM has ‘lack of commitment’ to US factories, has ‘little progress to report’
New cost estimates
The prolonged strike is taking a toll on GM, strikers and the broader economy. A new analysis estimates that as many as 100,000 workers have been laid off, face pay reductions or have otherwise been hurt by the lengthening strike against GM.
In new figures released Thursday, Anderson Economic Group listed the following impacts:
- GM has lost $1.13 billion in profits due to the strike.
- Direct wage losses for all employees is in excess of $624 million.
- That means $250 million in lost federal income tax revenue and $13.8 million in lost Michigan income tax revenue.
The calculations do not include strike pay, substitute work by furloughed employees, lost earnings at dealerships, or reductions in government expenditures.
The majority of dealers are not yet feeling a pinch in their sales, having maintained reasonable inventory levels, said Cristina Benton, director of Anderson Economic Group’s market and industry analysis practice. But some GM parts are becoming scarce, and these shortages are delaying needed repairs.
Some car dealers have reported difficulty getting parts to repair cars. GM is estimated to have lost about $1 billion so far, though estimates vary widely. Striking workers are getting by on $250 a week from the UAW strike fund.
What will be made in America
One of the remaining issues is a critical and complex one to solve: job security, said those close to the talks. The UAW wants assurance that GM will build future vehicles, especially gasoline-powered cars, in U.S. plants.
But GM pays a far greater labor cost in the United States than it does in Mexico. For it to be viable and competitive, it has said it must build some vehicles in Mexico. Labor experts say workers start at $1.90 an hour in GM’s factories in Mexico. Manufacturing UAW workers in the United States start at $17 an hour and can earn $28 after eight years.
The union was angered in November when GM said it would not assign new vehicles to two U.S. assembly plants, Lordstown in Ohio and Detroit-Hamtramck, and no future work for transmission plants in Warren and Baltimore. Lordstown and the transmission plants are idled; Detroit-Hamtramck is to operate at a reduced level until January
“A lot of the UAW folks who were at Lordstown, Detroit-Hamtramck, Warren and Baltimore transmission plants are now at other UAW locals because they were transferred when those idled,” said a person familiar with the negotiations. “So when it comes to ratification, job security is important because those people feel it. It hits close to home.”
Late Tuesday, the UAW’s lead negotiator with General Motors, Terry Dittes, told union members that GM has not shown a “solid commitment” to building vehicles in U.S. factories that the union considers key to job security.
“On day 23 of our strike, this still remains as one of our top agenda items with little progress to report,” said Dittes.
The letter added, “We have made it clear that there is no job security for us when GM products are made in other countries for the purpose of selling them here in in the U.S.A. We believe that the vehicles GM sells here should be built here. We don’t understand GM’s opposition to this proposition.”
Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.
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