Costs Begin To Mount For General Motors, Striking Workers

With the United Auto Workers strike against General Motors (NYSE: GM) now in its third week, the costs are beginning to mount for both sides. The longest walkout against G.M. in half a century is estimated to be costing the company tens of millions of dollars per day. The 49,000 union workers participating in the walkout are entering their third week without regular paychecks. The U.A.W. is providing each worker $250 a week in strike relief.

The pain is being felt across the entire North American continent. In addition to the 34 factories shut down in the United States, a shortage of parts that are produced at the U.S. plants has halted production at a vehicle assembly plant in Oshawa, Ontario, and an engine plant in St. Catharines, Ontario. G.M. has also halted production of pickup trucks, engines and transmissions at plants in Silao, Mexico. The company says that its other factories in Mexico are still operating.

The big losses are ramping up the pressure to reach a deal. Both sides have been negotiating nearly nonstop since the 2015 contract between the company and the union expired at midnight Sept. 14. The talks are taking place at downtown Detroit’s Renaissance Center, which houses GM headquarters.

One of the things the union is pushing for is for G.M. to reopen idled plants. G.M. idled a car plant in Lordstown, Ohio, and engine and transmission plants in Baltimore and Warren, Mich. earlier this year. In January, a car plant in Detroit is scheduled to cease production. According to sources familiar with the matter, G.M. has offered to keep the Detroit factory open, build a new battery plant with a partner near Lordstown, and invest $7 billion in U.S. plants that would preserve 2,700 jobs and create 2,700 new ones.

Terry Dittes, a U.A.W. vice president, wrote in a letter to members that the two sides remain at odds in the negotiations. He wrote that the most recent G.M. proposal failed to meet the union’s goals on health care, wages, job security, the use of temporary workers, and other issues. The union has responded with a counterproposal, but Dittes did not offer details on what it contained.



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