THE SIX-WEEK national strike by more than 48,000 United Auto Workers members against General Motors Co. has ended in victory.
Thousands of UAW-GM employees nationally were returning to work for the first time on Monday after the union ratified a tentative agreement with the Detroit automaker last Friday, ending the longest national strike against GM since 1970.
Despite the 40-day walkout, the new contract over the next four years promises wage increases, lump-sum bonuses and record ratification payments that mostly will make up the picketers’ wage losses.
A UAW statement last Friday confirmed: ‘UAW General Motors members ratified the 2019 Collective Bargaining Agreement this evening ending the longest automotive strike in 50 years.’
‘General Motors members have spoken,’ said Terry Dittes, UAW Vice President and Director of the UAW-GM Department.
He continued: ‘We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation.
‘Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working class Americans.’
The union statement said: ‘With ratification of the contract, the UAW members strike has ended, and workers will begin to report to work as instructed by General Motors.
‘The ratified contract includes an economic package of an $11,000 per member signing bonus, performance bonuses, two 3% annual raises and two 4% lump sum payments and holding the line on health care costs.’
‘We want to once again thank our members’ families and their local communities for their outpouring of support,’ said UAW President Gary Jones. ‘Our members not only joined together in solidarity but felt the support of their whole community throughout this important stand.’
The UAW said it will announce the next pattern bargaining company, FCA or Ford shortly.
UAW President Gary Jones announced last Saturday that the union will proceed with pattern bargaining at Ford.
‘Now that the General Motors strike has ended and the agreement has been ratified, we will proceed to Ford working with UAW Vice President Rory Gamble, Director of the UAW Ford Department and their staff.’
Meanwhile, the thousands of employees affected upstream at GM suppliers are returning to work after weeks without formal paycheques to jobs that typically pay less than their GM counterparts — effects of which will linger through the rest of the year, economists say.
‘These bonuses will fall unevenly,’ said Patrick Anderson, CEO of East Lansing’s Anderson Economic Group. ‘The range of effects is “I didn’t lose anything” to “I didn’t get a paycheque for six weeks, and I didn’t get a settlement.” They’ll take it on the chin.’
The region where the GM plants are situated, Michigan’s economic growth for 2019 is expected to slow to 1.4% in 2019 from 2.7% in 2018 following the GM action in the spring and summer, according to the University of Michigan’s Research Seminar in Quantitative Economics.
The strike, extending into mid-October, was estimated to have cut that figure by a tenth or more of a percentage point because of lost production, said Daniil Manaenkov, US forecasting specialist for the seminar.
‘It’s significant, but it’s not tipping Michigan into a recession,’ Manaenkov assured. ‘The auto sector is large when compared to other sectors, and we are an auto-dependent state more than others, but that’s a comparative statement. All the parts suppliers, metalwork and all the other parts and GM is a fraction of overall economic output.’
Almost 18,000 UAW-GM employees were on strike in Michigan, more than any other state. Meanwhile, between September 15 when the strike began and October 19, Michigan’s Unemployment Insurance Agency processed 9,000 claims from 95 employers believed to be as a result of the walkout, state spokeswoman Lynda Robinson said. The maximum a claimant can receive is $362 per week compared to the UAW’s strike pay of $275 per week to which the union upped by $25 on October 12.
The strike has affected 17,000 hourly and salaried workers at 120 of GM’s direct suppliers, according to the Original Equipment Suppliers Association, a trade organisation. Nationally, unemployment claims from auto supplier employees are up, as well, to about 30,000. Although not all may be as a direct result of the work stoppage at GM, Manaenkov noted.
The number of new claims has dropped since the automaker reached a deal with the union on October 16. Union leaders, however, have decided to continue the picket lines through the contract’s ratification.
Altogether, lost direct wages are estimated to be $989 million, the Anderson Economic Group estimates. Top-paid UAW-GM employees have lost $8,064 in wages from the strike, but they will receive an $11,000 ratification bonus to cover those losses.
The record ratification bonus was not why David Parnell Jr., who works at GM’s Flint truck assembly plant, voted for the contract, noting it provides benefits to GM employees no matter their experience.
‘But it helps,’ said Parnell, 46, of Detroit who has four children in college. ‘We went from paying bills on time to making arrangements on bills. It’s been eye-opening.’
Meanwhile, auto supplier workers are out on average $4,032, estimates the Anderson economic consulting firm, but there are no promised signing bonuses when they return to work.
‘It’s definitely taking a chunk out of both the third and fourth quarter in Michigan,’ Anderson said. ‘It’s going to be something we will see through the holiday shopping season.’
Sales tax revenue in Michigan wasn’t affected significantly year-over-year in September, according to the House Fiscal Agency. A more than 17-point drop of the Michigan Retailer Association’s index in September suggests negative activity in the sector with 52% of retailers recording declines. Many, however, responded to the survey before the strike at GM began.
GM is estimated to have lost $1.75 billion or more in profits from the work stoppage — which would decrease profit-sharing cheques to UAW-GM employees by nearly $2,000. The strike’s impact on GM should become clearer this week when GM reports its third-quarter earnings.
The walkout came at a time when the manufacturing sector was already experiencing weakness. For a second consecutive month, overall US factory production contracted, when in September it hit a 10-year low, according to the manufacturing index from the Institute for Supply Management.
The strike contributed to a 0.7% decline in the production of long-lasting goods in September and a drop in factory output overall, according to the Federal Reserve. That included a major 4.2% decline in autos made.
The strike stopped production at 30 GM plants across the country, suspended work at another two dozen company parts warehouses and distribution centres and led to nearly 10,000 furloughed non-UAW GM employees in Canada, Mexico and Ohio.
Third-quarter results from auto suppliers are providing a glimpse of the strike’s impact on the auto sector. Lear Corp. CEO Ray Scott said the Southfield seating and electrical systems manufacturer has lost $525 million in revenue because of the six-week strike, forcing it to lower its profit guidance by more than $100 million for the year. GM accounts for 18% of its revenue.
French auto supplier Faurecia said on October 17 the strike against GM, which accounts for 6% of the company’s revenue, for the final two weeks of the third quarter cut more than $25 million from its sales. Faurecia expects another $50 million in losses.
American Axle & Manufacturing Holdings Inc. reports its third-quarter results this Friday. GM, its former parent company, accounts for 41% of revenue at the Detroit-based gear and axle maker.
The union now is taking the ratified contract at GM to set the pattern at Ford Motor Co. and Fiat Chrysler Automobiles NV, but that doesn’t mean those companies also won’t see a strike, experts said.
GM’s contract allows it to close three plants and a parts distribution centre that will save it billions, but the other two automakers do not have the same over-capacity problem that GM had.
‘The chances of a strike between the UAW and Ford and FCA are still significant,’ Manaenkov said. The union ‘didn’t get everything that they wanted obviously. I’m not sure that the pattern bargaining is going to repeat itself. They may want a little more out of the other manufacturers.’