Setting the stage for what could be one of the biggest industrial disputes in the US in recent yeas, the UAW said on Sunday that its roughly 48,000 hourly workers at General Motors’ plants in the US will go on strike at midnight on Sunday after their contract talks reached an impasse, according to Reuters.
This is the first time GM employees have launched a national strike in 12 years.
“We do not take this lightly,” Terry Dittes, the UAW vice president in charge of the union’s relationship with GM, said at a press conference in downtown Detroit. “This is our last resort.”
On Tuesday, the union’s membership voted overwhelming to authorize the leadership to call a national strike, with 96% of members supporting the action. That’s less than the number who supported negotiations four years ago, when workers at GM and Fiat supported a strike by 97% and 98%, respectively.
In a statement, GM said that its offer to the UAW included $7 billion in new investments, 5,400 jobs (most of which would be new) as well as modest pay increases, improved benefits and a contract ratification bonus of $8,000.
“We have negotiated in good faith and with a sense of urgency,” a rep for GM said.
According to Reuters, the strike could swiftly disrupt GM’s operations across North America and could hurt the broader US economy at a time when the auto industry is already suffering from slumping sales.
GM’s hourly workers will also likely suffer from greatly reduced strike pay. GM workers last went on strike during contract talks in 2007. That strike only last two days, but a more serious strike occurred in Flint, Michigan, in 1998, lasted 54 days and costing the No. 1 US automaker more than $2 billion.
The union has been struggling to stop GM from closing plants in Ohio and Michigan while arguing that workers deserve higher pay after years of record profits.
Though, at the same time, there is an ongoing (and widening) Federal probe into union corruption that resulted in UAW President Gary Jones’ home being searched last week by federal officials (he has not been charged). That investigation has already resulted in convictions of eight union and company officials associated with Fiat.
Charges were also filed against Michael Grimes, a former UAW official who was assigned to GM’s department and who allegedly took $2 million in kickbacks from UAW vendors.
GM insists that it needs to shutter the plants for economic reasons, and that UAW wages and benefits are too high to compete with non-union auto plants in the south.
In its statement, the automaker said its offer to the union included “solutions” for the Michigan and Ohio assembly plants. One source told Reuters that this could include production of a future electric vehicle. The company’s shuttered plant in Lordstown could become a plant for electric batteries.
The UAW has been building up reserves in preparation for a possible strike, but still, its strike pay for workers affected by the strike is just $250 per week, much less than their standard wages.
The longer the strike lasts, the harder it will be for GM’s workers, who will soon struggle to pay their bills on what amounts to a salary of roughly $12,000 a year.
“The pain is deep on both sides,” said Kristin Dziczek, vice president of industry, labor and economics at the Ann Arbor, Michigan-based Center for Automotive Research. “(GM) will start to see costs immediately, but the costs (will) become prohibitive and drive them back to the table after a couple of weeks.”
“That’s going to have a big effect on the economy,” she said.
The automaker has 12 vehicle assembly plants, 12 engine and power train facilities and a handful of other U.S. stamping plants and other facilities.
It’s not clear whether talks have resumed, but earlier on Sunday, the UAW said 850 maintenance workers employed by GM contractor Aramark went on strike at five plants in Michigan and Ohio.