The strike that seemed inevitable is now on.
Roughly 46,000 GM employees who work at 30 factories in 10 states walked off the job Monday after union and management negotiators failed to reach a new contract.
So it’s a tough time for both union members and GM managers, one in which both sides are losing a lot of money.
Employees, of course, are going without generous wages that are being replaced by $250 a week in strike play. Meanwhile, GM, according to news reports, “stands to lose as much as $100 million a day” if the strike is not quickly resolved.
This is a private sector dispute, but one that could have a dramatic effect on the public at large because of the economic consequences of this war of wills between management and labor.
Much has changed on the national labor/economic landscape since the days of domination by the Big Three — GM, Ford and Chrysler — and the hugely powerful United Auto Workers.
The UAW hit its all-time membership high in 1969, topping out with 1.5 million members.
Now it has about 400,000 members, roughly 150,000 of whom are employed by GM, Ford and Fiat Chrylser.
At the same time, the auto companies have had their near-death experiences, with GM and Fiat Chrysler forced into bankruptcy reorganization that allowed them to shed costs, many of which were employment-related, that have allowed them to return to profitability.
It’s GM’s profitability that’s sticking in the throats of UAW members. After making concessions to help bring GM back to life, they now want a bigger share of the pie, and they’ll get it.
The question, of course, is how much more money GM will devote to labor costs. Each side is talking about doing what’s “fair,” but that is in the eye of the beholder.
What each side is striving for is an agreement both can live with and flourish under.
Unfortunately for the UAW, its leadership is negotiating under a cloud of a serious corruption investigation that has resulted in multiple guilty pleas by union executives as well as managers at Fiat Chrylser. What role that is playing in the negotiations is difficult to say.
One thing that is not difficult to assess is GM’s relative prosperity, at least compared to its recent bankruptcy. The company reported earnings of $11.8 billion in 2016 and $11.7 billion in 2017.
That’s enough for the UAW to seek to eliminate the multi-tiered pay scale in place, one that oversees higher wage scales for veteran employees compared to new hires. Perhaps the sharpest distinction is one that allows veteran GM employees to receive generous profit-sharing checks each year while the newer ones go without.
The dynamics of a labor stoppage, particularly one involving a powerful union and a powerful corporation, can have a dramatic effect on what transpires.
If both sides stick to the dollars and sense of the issues under discussion, they can find a way to common ground. If one or the other — or perhaps both — get carried away by petty and personal grievances, old resentments or charges and counter-charges, labor talks can run off the rails, leading one side or the other — or perhaps both — to dig in their heels.
One thinks of the disastrous UAW strikes at Caterpillar as an example.
That’s why it would be best for all concerned for both sides to keep talking until a contract is in hand and the economic fallout from so great a blow to thousands of individuals and the overall economy is contained.