In The News
Strike exposes GM issues, leads to Big Three deals
Update Oct. 10: A UAW strike against Chrysler lasted six hours and produced a new contract agreement. Historically one automaker deal becomes the model for two others in the Big Three, even though the circumstances are not the same. As the story below indicates, UAW was willing to push and both Chrysler and Ford, with modifications, accepted the same union thinking and tactics that brought a deal at GM.
By Dominique Paul Noth
Editor, Milwaukee Labor Press
Within two days of calling a nationwide strike, United Auto Workers reached a tentative contract agreement with General Motors Sept. 26, allowing the return of its 73,000 GM workers nationwide, including the 2,500 employed in Janesville.
There was an irony to the speed of the settlement.
Neither side wanted the strike, the first nationwide in the auto industry in more than 30 years.
And the media universally beat up on the union for calling the strike, even while conceding that the workers had a point. According to the pundits, the strike was an “antiquated” economic weapon and the scales had tilted against its effectiveness in the modern workplace.
But you know what?
It worked.
UAW and GM continued negotiations during the strike, which obviously created a new urgency. Within two days the union was able to call workers back to GM plants with a tentative agreement that placed health care for retirees in the union's hands.
Early reports indicated the deal included lump-sum payments plus job security and bonuses for existing workers, while conceding lower pay rates for new hires.
The deal creates a UAW-run but GM-funded trust to administer retiree health care. Details will emerge after the contract proposal is reviewed by the union’s local top officers and then put to a vote of rank and file members.
Even more important for the US auto industry, the agreement is expected to set a pattern for contracts negotiated at Ford Motor Co. and Chrysler.
Just after the strike was called on Sept. 24, the Milwaukee County Labor Council and the AFL-CIO – which had been closely following the negotiations -- announced support and solidarity with the union.
UAW President Ron Gettelfinger said during the strike that job security was the No. 1 issue, along with worker benefits. He discounted media speculation that the problem was the groundbreaking provision to solve health care by establishing a UAW-managed trust for GM's retiree obligations.
What was clear was that UAW turned to the strike as a last resort to create a new climate.
Gettelfinger said the union was severely disturbed by “one-sided negotiations” that failed to recognize how much GM employees had given up.
“Since 2003 our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement,” said Gettelfinger. “In every case, our members went the extra mile to find reasonable solutions.”
The end of the strike confirmed Gettelfinger’s view. It stirred the company to rapid, meaningful negotiations, partly because neither side could benefit from a long strike and GM was deeply aware of how it had benefited from its union workforce.
Auto industry experts concede that the UAW workforce has led GM to record productivity that allowed the company to survive bad decisions on what sort of cars to make.
UAW had helped GM create some of the world’s most efficient plants. The UAW is also regarded a leader in establishing the wages and benefits that represent, indeed helped create, the American middle class, as pointed out by AFL-CIO President John Sweeney in support of the union’s actions.
GM has 82 US facilities, including assembly and parts plants and warehouses, including the Janesville plant.
The unprecedented element in the negotiations was the health care trust known as VEBA. Though Gettelfinger emphasized that the strike was “not about the VEBA in any way shape or form,” the concept has drawn a lot of media attention because of its uniqueness and because of the general understanding that GM has been pushing hard in the negotiations for VEBA – a Voluntary Employees Beneficiary Association - so it could move $51 billion in unfunded retiree health costs off its books.
GM has nearly 339,000 retirees and surviving spouses and UAW has agreed in principle and for the right funding formula to manage and administrate their health care.