The United Auto Workers Union and General Motors have failed to reach
an agreement in contract negotiations, and as a result, the UAW began a
labor strike on Monday. The strike affects 73,000 American workers, and
through an ongoing ripple effect, as many as 100,000 additional
Canadian workers. The action also impacts suppliers that sell parts to
Union officials said their only choice was to strike because General Motors was unwilling to accept the union's demands to protect workers' jobs and benefits.
According to an article in the New York Times, the core of the strike is over the terms of a specific type of health care trust -- called a voluntary employee benefit association, or VEBA -- that would have assumed GM's $55 billion liability for medical benefits.
While it is said that GM considers the formation of a VEBA its major demand, Ron Gettelfinger, the union's president, claimed the strike was over other issues, with job security heading the list.
to the NY Times "For General Motors, its unyielding stance reflects its
decision to accept the short-term pain of a strike at 80 facilities in
30 states to achieve its goals: a lower cost structure and more
flexible work force to better compete against surging Japanese
automakers like Toyota and Honda."
How long such a strike could last is largely based on how long each side can afford to be idle. According to the Times, the UAW has enough funds in its account to cover employees for a two-month walkout. On the other hand, General Motors had a two-month supply of vehicles at the end of summer. Even though negotiators from each side continue to bargain, industry analysts predict the strike could last for weeks.
Beyond the financial impact, each side also risks damage to its image. General Motors never recovered the 31 percent market share it held prior to a seven-week standoff in 1998. Understandably, an angry workforce can scare off buyers who might be concerned about post-strike quality.
"Nobody wins in a strike," said Gettlefinger at Monday's press conference. "This is nothing we wanted." According to a release from General Motors "The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company." We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors."
General Motors spokesman Tom Wickham said, "The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company," and that company officials would "continue focusing our efforts on reaching an agreement as soon as possible."
By Brandy Schaffels
photo by lunanik at flickr