UAW Strike Against GM Ends, Everyone Happy

We’re not sure what exactly was holding things up over the weekend that led to the GM strike that lasted two days, but all sides seem to be happy today. The main sticking point, it turned out, wasn’t the UAW taking over retirement health care management — stay awake one more second — it was GM providing some kind of reassurance that there is job security for UAW members.

Oddly enough, this morning there are still no specifics on how GM managed to offer job security in an industry that is seeing increasing competition not just from Japan and Korea but from China as well.

GM says this deal helps reduce the gap in costs between foreign nameplate cars made in America with its own products. There’s roughly $200 per vehicle that domestics pay more than imports that use non-UAW labor. We’ll keep an eye on new car prices to see if they dip $200 or if the company adds more features. We’re not holding our breath on the former.

GM, UAW Reach Tentative Deal; Strike is Off (The Detroit News)

Comments

The strike was a face-saving ploy by the UAW leadership. The UAW is taking at hit and leadership needed to show they they were not going to lay down and take it without a fight. By throwing down a old-school strike, the UAW plays up it relevance during a time when its relevance is on the wane.

Exhibit A: The nationwide strike. Why? The UAW could hurt GM badly by hitting a few key plants (like they did in Flint in 1998). The national scope made bigger headlines, affected more UAW members and communicated the message as loud as possible.

Exhibit B: Non-poisonous negotiation. In years past, the negotiations were brutal, long affairs complete with acrimonious statements and personal attacks at the conclusion of each round. This time? Closed sessions. Measured, careful responses. The UAW knows the gravity of the situation, and they aren't going to throw anyone under the bus and risk making this conflict go nuclear.

Exhibit C: Non-disclosed Terms. As of this morning, the terms have not been distributed. Perhaps they still need to be voted upon. Or perhaps they just don't want to highlight the "givebacks".

Exhibit D: Why did the strike end? As the article points out, there was no publicly announced logjam that was broken. IMO, the UAW leadership figured that their point had been made, their honor preserved. Also, rank-and-file union members could ill afford to live on the $200 per week stipend they they get for picketing.

FYI, GM will not face China auto industry competition on this side of the world.
Chinese knows better by learning the Japanese and Korean stories.
Where will GM have competition against Chinese autos? Over at China, where they have as much land as over here, but much more people, which turns out another big market.

Facts: GM was already making money. Not a lot. But it beat losing money.

GM is going great in the new Chinese market.

GM engineering and management is extremely good when they are alert. They grow complacent when things are great, then they screw up. They are alert now, expect good stuff.

GM should have played a little rougher. This was their big chance. Their costs will still be too high in the US and Canada.

But GM still won. Now the UAW has the health care headache. And for the first time in eighty years the union made a few concessions.