GM on strike

[southsider2k5]

http://crainsdetroit.com/apps/pbcs.dll/art...1/1009/breaking

 

UAW strikes GM

 

By David Barkholz

 

7:30 am, September 24, 2007

 

 

 

 

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The UAW called a strike against General Motors today after UAW President Ron Gettelfinger said he was “shocked and disappointed” by GM’s positions at the bargaining table. An official at UAW Local 652 in Lansing, Mich., confirmed the walkout at 11:06 a.m. EDT.

 

The UAW said it set the strike deadline over the “failure of GM to address job security and other mandatory issues of bargaining.”

 

At the UAW-GM training center in Detroit, cars full of UAW officials were leaving en masse after the strike call. One car had a picket sign hanging out the window. The strike against GM includes about 73,000 UAW-represented employees throughout the United States.

 

It is the first stoppage against GM since 1998 when a 54-day strike at parts-making operations in Flint, Mich., shut GM production nationally costing the company more than $3 billion.

 

“We’re shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years,” Gettelfinger said in a prepared statement released at 1:40 a.m. EDT.

 

The strike deadline was set after a generally optimistic tone prevailed over negotiations all weekend.

 

The strike marks the first stoppage against GM since 1998 when a 54-day strike at parts-making operations in Flint, Mich., shut GM production nationally costing the company more than $3 billion.

 

GM spokesman Dan Flores said the talks involve "complex issues that affect the job security of our U.S. workforce and the long-term viability of the company."

 

He said GM will continue negotiating and "remains fully comitted to working with the UAW to develop solutions together."

 

He declined to comment about strike preparations GM has made to a potential walkout.

 

GM and UAW negotiators had agreed during the weekend to the broad terms of a deal that would reduce GM's nearly $5 billion annual health-care bill, people briefed on the talks said.

 

Under that plan, widely considered the central issue in the complex talks, GM would shift responsibility for retiree health care to a new UAW-aligned trust fund.

 

Wall Street analysts have said such a step could cut GM's annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.

 

But for the UAW, any deal on health care needs assurances of job security.

 

Employees at GM assembly plants in Lordstown, Ohio; Spring Hill, Tenn.; and Kansas City, Kan., want Gettelfinger to secure new vehicles to replace vehicles they are losing or have lost.

 

"That's the deal-breaker as far as I'm concerned," Sherwood told Automotive News last week. His local represents about 3,000 workers at GM's Grand River plant in Lansing.

 

GM will make its investment decisions based on the kind of deal that UAW workers ultimately ratify, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor. Those investments could reach $5 billion in the coming years, he said.

 

Lordstown wants a small-car replacement for the Chevrolet Cobalt. But the replacement could go to Mexico if GM can't get cost-saving work rules and cost reductions from the master agreement that help dramatically close a $20- to $30-an-hour labor cost gap with GM's Japanese competitors, he said.

 

Creation of a retiree health care trust fund, known as a voluntary employee beneficiary association, would get GM about halfway to that goal, Cole said.

 

The outcome of the contract talks is seen as crucial to efforts by the three Detroit-based automakers -- GM, Ford Motor Co. and Chrysler L.L.C. -- to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.

 

GM, Ford and Chrysler are seeking concessions from the UAW to close a labor cost gap with Toyota Motor Corp. and other Japanese automakers operating in the United States.

 

Most analysts had seen a strike as a remote risk because of the weakened position of GM, which has cut 34,000 blue-collar workers from its payrolls and announced plans to shutter a dozen factories by next year.

[Texsox]

More jobs for Mexico workers and US managers on the border. I think all of us here would be willing to take cuts in pay and benefits to keep our jobs. Especially if there is no assurance of future employment.

[sox4lifeinPA]

The bright side: this means less of their s***ty cars on the road.

[NorthSideSox72]

The bright side: this means less of their s***ty cars on the road.

Its kind of sad, the s***ty predicament that the American car companies have put themselves into. By allowing themselves to be hamstrung over the decades by unions, they have simply not been able to be competitive with Japanese and Korean manufacturers (even those who also make their cars in the U.S.). And now the American workers, who were the ones the unions were supposed to protect, are the ones who are suffering.

 

The only way these companies could really get themselves on a level playing field at this point is if they bite the bullet, and really start things over. Tear up every single labor contract on the books and structure something reasonable. Get out of the pension business. Tear down the aging facilities and build newer, more automated ones (over time of course). If the union resists... and here is the really hard part... call their bluff. Hire people individually. This will be very costly for all involved in the short run, but ultimately, it may be the only way they can be around in 10 years.

 

[Chisoxfn]

GM has one major thing going for it. They seem to be ahead of the Japanese Auto Makers when it comes to altnerative fuel technology and it appears they have a solid chance at passing them at Hybrid technology as well and I think long-term GM has a very good prognosis and outlook.

[NorthSideSox72]

GM has one major thing going for it. They seem to be ahead of the Japanese Auto Makers when it comes to altnerative fuel technology and it appears they have a solid chance at passing them at Hybrid technology as well and I think long-term GM has a very good prognosis and outlook.

I wish that was true, but it really isn't. Japanese companies have been producing and selling hybrids that are much more fuel efficient, and doing it for a much longer period of time. Check out the stats - Japanese model sales dwarf those of American companies' cars. Also, the next generation hybrids (cars that get in the territory of 100 mpg) are well underway in Japan, whereas American companies aren't even on that playing field yet.

 

As for alternative fuel like E85, that is a short-term bridge technology that saves very little in total oil consumption. The Japanese companies aren't even bothering with it.

 

Here is an article about how GM is marketing the Chevy Volt, even though not only does a prototype not even exist, the underlying technology hasn't been completed yet.

 

I'd love it if American companies actually got competitive in this arena, but they are nowhere near that right now.

 

[southsider2k5]

Its kind of sad, the s***ty predicament that the American car companies have put themselves into. By allowing themselves to be hamstrung over the decades by unions, they have simply not been able to be competitive with Japanese and Korean manufacturers (even those who also make their cars in the U.S.). And now the American workers, who were the ones the unions were supposed to protect, are the ones who are suffering.

 

The only way these companies could really get themselves on a level playing field at this point is if they bite the bullet, and really start things over. Tear up every single labor contract on the books and structure something reasonable. Get out of the pension business. Tear down the aging facilities and build newer, more automated ones (over time of course). If the union resists... and here is the really hard part... call their bluff. Hire people individually. This will be very costly for all involved in the short run, but ultimately, it may be the only way they can be around in 10 years.

 

Good post. Really the auto workers are going the way of the airlines and steel mills. They are pricing themselves out of jobs, and don't even realize it.

[Texsox]

Good post. Really the auto workers are going the way of the airlines and steel mills. They are pricing themselves out of jobs, and don't even realize it.

 

I am certain anyone here would take a decrease in pay and benefits to keep our jobs.

[sox4lifeinPA]

I am certain anyone here would take a decrease in pay and benefits to keep our jobs.

 

*raises hand*

[sox4lifeinPA]

*raises hand*

 

 

actually, that's not true. Fortunately, I work in an industry with HUGE turnover, so I can get a job anywhere.

[Texsox]

actually, that's not true. Fortunately, I work in an industry with HUGE turnover, so I can get a job anywhere.

 

I just don't understand why the workers do not accept a cut to save the company. And if somehow this management team can save the company, they deserve some huge raises and bonuses. Because cutting all that cost will be a huge undertaking.

[Balta1701]

I just don't understand why the workers do not accept a cut to save the company. And if somehow this management team can save the company, they deserve some huge raises and bonuses. Because cutting all that cost will be a huge undertaking.

 

Already Done.

General Motors nearly doubled the compensation for its chief executive, Rick Wagoner, last year, even though he voluntarily reduced his salary to aid the automaker’s restructuring effort, G.M. disclosed Friday in its annual proxy filing.

 

G.M. valued Mr. Wagoner’s 2006 pay package at $10.2 million, up from $5.5 million in 2005. Most of the compensation came in the form of stock awards and options, and he received no bonus for a second year. Mr. Wagoner’s base salary, which had been $2.2 million since 2003, was cut to $1.3 million last year at his request.

 

Mr. Wagoner and other top executives, including the vice chairman, Robert A. Lutz, and the chief financial officer, Frederick A. Henderson, will continue to receive reduced salaries in 2007.

 

Including noncash compensation, Mr. Lutz earned $8.4 million in 2006, nearly triple the $3 million he received the previous year.

 

Mr. Henderson, who became G.M.’s chief financial officer in January 2006, earned $5.2 million in his first year on the job. His predecessor, John M. Devine, earned $3.9 million in 2005.

[Texsox]

They have a much bigger impact than tens of thousands of workers who are little more than cogs in the wheel.

[southsider2k5]

Already Done.

 

A couple of things here.... First of all it said right in the article he took a reduction in salary. The money came from stock options. Now I don't know how familiar you all are with options, but they are not guarenteed. The stock has to be at a certian price before they are worth anything. In other words you are changing your paycheck into a risk, instead of a known factor. How willing would you be to do that?

 

Secondly I am about 99.9% sure that GM is a company with an ESIP. In other words employees get to purchase GM stock for a discount of a fixed amount. The company I work for gives us a 5% discount, so I am sure GM gets at least 10%. So if the CEO is pushing the stock price upwards enough to make his option worth something, he is also making the employees a good amount of money through their ESIPs. Its not like just the CEO owns company stock.

[EvilMonkey]

Does it take $30+ an hour plus pension plus paid health care to screw on a f***ing bolt or push a button?

[NorthSideSox72]

Does it take $30+ an hour plus pension plus paid health care to screw on a f***ing bolt or push a button?

I know this will sound crass, but... what it should take is a robot. The number of actual people on the assembly lines does not need to be nearly as many as there are in those plants. Japanese companies figured that out a long time ago.

 

[Texsox]

Does it take $30+ an hour plus pension plus paid health care to screw on a f***ing bolt or push a button?

 

No, it takes minimum hour employees. What we need to do is realize a large middle class is a joke and get past it. We do not have that many middle class jobs anymore. Minimum wage jobs and executives, that's what it takes in America

 

And it does take $4,807 per hour to run the company. Take a dump and make $1,200, that's the way to do it.

[sox4lifeinPA]

No, it takes minimum hour employees. What we need to do is realize a large middle class is a joke and get past it. We do not have that many middle class jobs anymore. Minimum wage jobs and executives, that's what it takes in America

 

And it does take $4,807 per hour to run the company. Take a dump and make $1,200, that's the way to do it.

 

 

 

good lord...if I was paid $1200 per dump, I'd be a billionaire.

[Chisoxfn]

I wish that was true, but it really isn't. Japanese companies have been producing and selling hybrids that are much more fuel efficient, and doing it for a much longer period of time. Check out the stats - Japanese model sales dwarf those of American companies' cars. Also, the next generation hybrids (cars that get in the territory of 100 mpg) are well underway in Japan, whereas American companies aren't even on that playing field yet.

 

As for alternative fuel like E85, that is a short-term bridge technology that saves very little in total oil consumption. The Japanese companies aren't even bothering with it.

 

Here is an article about how GM is marketing the Chevy Volt, even though not only does a prototype not even exist, the underlying technology hasn't been completed yet.

 

I'd love it if American companies actually got competitive in this arena, but they are nowhere near that right now.

I was reading in one of the business magazines and it was all about the alternative fuel and it was talking about some new technology that GM is developing that is more advanced than what the japanese manufactuers and other American manufacturers have. The article than went on to rip the rest of the american car companies for being so far behind in the process.

 

I don't remember the exact technology GM was working on but it sounded very cutting edge (I'll have to find the article and than I'll post more info on it).

[Chisoxfn]

I am certain anyone here would take a decrease in pay and benefits to keep our jobs.

That would be my perfect excuse to run away.

[Texsox]

That would be my perfect excuse to run away.

 

But you wouldn't care if you were overpaid for years?

 

I'm certain the mortgage companies in Detroit would not mind if a few thousand workers defaulted. They would also be forced to buy cheaper foreign cars

[Chisoxfn]

But you wouldn't care if you were overpaid for years?

 

I'm certain the mortgage companies in Detroit would not mind if a few thousand workers defaulted. They would also be forced to buy cheaper foreign cars

Well I'm not currently in that situation. I'm on the opposite side of the spectrum as I'm vastly underpaid (and I state that knowing if I left today I could get with ease a 15-20K a year raise). However, if I stay where I am for a couple more years, I can see that raise when I switch jobs grow exponentially.

 

That said If I knew I couldn't find a job elsewhere or something along those lines, than yes, I would take a pay cut knowing it would be in my best interest (key word being my best interest). And many of these employees do not have other options and would have to relearn new skills if they got jobs elsewhere so they should be willing to take a cut.

[kapkomet]

Well I'm not currently in that situation. I'm on the opposite side of the spectrum as I'm vastly underpaid (and I state that knowing if I left today I could get with ease a 15-20K a year raise). However, if I stay where I am for a couple more years, I can see that raise when I switch jobs grow exponentially.

 

That said If I knew I couldn't find a job elsewhere or something along those lines, than yes, I would take a pay cut knowing it would be in my best interest (key word being my best interest). And many of these employees do not have other options and would have to relearn new skills if they got jobs elsewhere so they should be willing to take a cut.

 

 

And that's the key that Tex doesn't want to talk about.

 

[Rex Kickass]

If you think it's about healthcare, you're wrong. It's about protecting jobs. 15 years ago, there were a quarter million UAW workers with GM. Since then, due to spinoffs and plant closures, its down to about 73,000.

 

http://money.cnn.com/2007/09/24/news/compa...dex.htm?cnn=yes

 

Gettelfinger said the union was ready to discuss the company's key bargaining goal of shifting an estimated $51 billion in health care expenses for retirees and their family members to union-controlled trust funds. But he said that other issues had derailed hopes of an agreement.

 

The union president said he was looking for assurances from the company about the job security of UAW members. He said he wanted guarantees about how much GM would invest in U.S. plants and about how many new vehicles would be built in the United States.

 

The UAW has seen its membership at GM plummet by 70 percent since 1994, as the automaker dumped its parts unit and closed plants to try to align its production more in line with its shrinking U.S. market share.

 

Looks like the UAW has been working with GM to lower health care costs as well....

 

A key to the contract talks is GM's goal of shifting an estimated $51 billion in future health care costs for retirees and their family members to union-controlled trust funds. GM has more than 340,000 retirees and surviving spouses receiving such benefits today.

 

Shifting those costs is seen as a key to GM efforts to close its cost gap with nonunion automakers such as Toyota Motor (Charts) and Honda Motor (Charts). Ford and Chrysler combined are facing nearly $50 billion of retiree health care costs as well.

 

Gettelfinger disclosed that two year ago the union proposed setting up the kinds of trust funds, known by the accounting short-hand of VEBA's, that are now being sought by the company. Instead the company and union negotiated a less dramatic manner to limit the cost of retiree health care for the company. He said that if the company had taken the union's proposal at that time, it could have saved $1,000 per vehicle.

 

"They did raise the VEBA (in current talks) and we were more than eager to discuss it," Gettelfinger said. "Let me be very clear on this point - this strike is not about the VEBA in any way shape or form."

[santo=dorf]

How exactly is GM going to guarantee "about" a number of cars for production? If there is no market, or the market isn't as big, you don't make vehicles to exceed that number.