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End of GM strike still uncertain, despite tentative labor deal

The strike at General Motors has already gone on for five weeks. It might drag on even longer if strikers reject a tentative agreement reached last week between the company and negotiators for the United Auto Workers union.

The negotiating team and union leadership are both recommending that the nearly 50,000 strikers vote to ratify the new four-year agreement. Results of the vote will be released Friday evening.

But there’s a lot of anger towards GM among rank-and-file workers. The tentative deal reached last week would pay members an $11,000 signing bonus and raise hourly pay for veteran workers 6% over the life of the contract, to $32.32.

It also will allow many temporary workers to become permanent employees, which will significantly improve their pay and benefits. And the union got GM to drop its demand that workers pay a much greater percentage of their own health care costs.

But the UAW struck out in its efforts to have GM shutter some of its production in Mexico and relocate it to the United States to revive doomed plants here.

As part of the tentative agreement, GM agreed to save the Hamtramck assembly plant in Detroit. But the decision isn’t related to Mexico. GM plans to use the plant to build electric trucks at an undetermined date more than a year away. Once production of sedans currently being built at Hamtramck ends in 2020, the plant will go dark for an extended period.

The union was unable to save three other plants – an assembly plant in Lordstown, Ohio, and transmission plants in Warren, Michigan, and Baltimore, all which halted production earlier this year. And while thousands of workers at those plants have taken jobs at other GM plants, many are unhappy at having to relocate.

Tommy Wolikow used to work at GM’s plant in Lordstown before relocating to work at a different GM plant in Flint, Michigan 250 miles away, leaving his family behind. He took the transfer hoping that this contract would force GM to shift more production from Mexico and reopen Lordstown. When he learned that wasn’t included in tentative agreement, he said it was devastating.

“So many people left the community…with the thought in their mind that..our union is strong and our union’s going to get us back to work in Lordstown one day, that this is just a brief thing that we got to do for our families,” he said.

Without any production for Lordstown “you know it’s going to be a no vote for a lot of us,” he said.

Tim O’Hara, president of the Lordstown union local, voted against the deal when it was presented to union leadership last week. Beyond the anger of Lordstown workers, he said strikers across the country are nervous about their jobs without an agreement from GM to bring work back from Mexico.

“You look on social media, you see a lot of people saying they don’t like the terms,” he said. “It could go either way.”

Some of the workers are right to be nervous.

Two other GM assembly lines in Michigan are down to one shift per day, and could be at risk of closing during the four years of this proposed contract. Lordstown went from three shifts to a shutdown during the previous four-year deal. And despite the recent closings, GM’s US plants still have excess capacity — something that could be exacerbated if US sales continue to slow.

It was always unlikely that GM would agree to the union’s demands that it shift production of any vehicles now being made in Mexico back to US plants, said Kristin Dziczek, the vice president of industry, labor and economics at the Center for Automotive Research.

“It cost billions of dollars to put them [in Mexico], and it’d cost billions of dollars to bring them back,” said Dziczek. “GM would have been loath to move anything back that they just spent money to put there.”

Only 55% of UAW members at GM approved the last deal, which was a much more positive contract for them: they received their first pay raises in more than a decade, and there were no plant closings or workers being relocated around the country.

It could be more difficult to complete the deal this time, given the anger directed at the company.

One reason the union may have postponed workers returning to work is its fear that the deal could be voted down. Four years ago, membership at Fiat Chrysler rejected a tentative agreement, although they weren’t on strike at the time. Membership at Ford only narrowly approved a deal that year as well.

If the GM strikers returned to work and then rejected a deal, it would be very hard for union negotiators to improve any terms at the bargaining table, said Dziczek.

“Once the strikers are back at work, [the negotiators] have no leverage,” she said.

That members have been on strike since September 16 could cut both ways.

“The fact that they were out for five weeks, their expectations are higher,” said Art Schwartz, a former GM labor negotiator who is now a consultant. “But they want the ratification bonus. They have bills to pay. Both forces are at work.”

Schwartz wouldn’t make a prediction on how this vote would go.

“It used to be a slam dunk,” he said. “But that seems to be changing.”

Article Topic Follows: Biz/Tech

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