The union representing about 49,000 General Motors workers in the U.S. said they would go on strike at midnight Sunday night because contract negotiations with the automaker had broken down.

The decision came after about 200 plant-level United Auto Workers leaders, who met in Detroit on Sunday morning, voted unanimously in favour of a walkout.

The four-year contract with GM expired on Saturday, raising the possibility of a strike. 

“We do not take this lightly,” Terry Dittes, the UAW vice-president in charge of the union’s relationship with GM, said at a news conference in downtown Detroit. “This is our last resort.”

The union has framed the four plant closures in the U.S. announced by GM as a betrayal of workers who made concessions in 2009 to help the automaker through its government-led bankruptcy.
 
“General Motors needs to understand that we stood up for GM when they needed us,” Ted Krumm, head of the union’s bargaining  committee in talks with GM, said at the news conference Sunday. “These are profitable times … and we deserve a fair contract. We helped make this company what it is.”

GM said in a statement that its offer to the UAW during talks included more than $7 billion in investments, 5,400 jobs — a majority of which would be new jobs — pay increases, improved benefits and a contract ratification bonus of $8,000 US.

“We have negotiated in good faith and with a sense of urgency,” the automaker said.

On Saturday night, GM had said in a statement that it still held out hope for an agreement: “We are prepared to negotiate around the clock because there are thousands of GM families and their communities — and many thousands more at our dealerships and suppliers — counting on us for their livelihood. Our goal remains on building a strong future for our employees and our business.”

 A strike would halt GM’s U.S. production, and could have an impact on vehicle production in Mexico and Canada (there are Ontario assembly plants in Oshawa, St. Catharines and Ingersoll, Ont.). Canadian workers are represented by a different union — Unifor — but the North American auto industry is integrated and Canadian operations rely on parts from the U.S.

Kristin Dziczek, vice-president of industry, labour and economics at the Ann Arbor, Mich.-based Center for Automotive Research (CAR), said a strike at GM’s U.S. facilities would also shut its plants in Canada and Mexico because the automaker’s supply chain is so integrated.

“That’s going to have a big effect on the economy,” Dziczek said.
 

Janitors at UAW-represented facilities walk out

While autoworkers showed up for their jobs Sunday, about 850 UAW-represented janitors at eight GM facilities in Ohio and Michigan who work for Aramark, a separate company, went on strike Sunday after working under an extended contract since March of 2018, the union said.

It appeared GM workers were crossing picket lines set up by their own union. The Detroit Free Press reported that factory workers at a pickup truck plant in Flint, Mich., reluctantly passed Aramark picketers to report for work early Sunday.

GM said in a statement that it has contingency plans for any disruptions from the Aramark strike.

UAW vice-president Terry Dittes said in a letter to GM members that, after months of bargaining, both the union and GM were far apart on issues such as wages, health care, temporary employees, job security and profit sharing.

The union’s executive leaders and a larger group of plant-level officials were meeting Sunday morning to decide the union’s next steps.

A letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.

A GMC Yukon moves through the assembly line at a General Motors assembly plant in Arlington, Texas, on June 9. The UAW’s pact with GM expired Saturday night. (Mike Stone/Reuters)

“While we are fighting for better wages, affordable quality health care and job security, GM refuses to put hard-working Americans ahead of their record profits,” Dittes, the union’s chief bargainer with GM, said in a statement Saturday night.

If there is an autoworkers strike, it would be the union’s first since a two-day work stoppage at GM in 2007.

The move by the union also comes as it faces an internal struggle over a federal corruption investigation that has touched its president, Gary Jones. Some union members are calling for Jones to step down while the investigation continues. But Friday night, union leaders did not remove Jones.

Vance Pearson, head of a regional office based near St. Louis, has been charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It’s the same region that Jones led before taking the union’s top office last year. Jones has not been charged.

GM odd firm out: Ford, Fiat Chrysler pacts extended

On Friday, contracts with Ford and Fiat Chrysler were extended indefinitely, but the pact with General Motors was still set to expire Saturday night.

The union has picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company for labour action, meaning it’s the focus of bargaining and would be the first company to face a walkout. Picket-line schedules already have been posted near the entrance to one local UAW office in Detroit.

GM and union talks were tense from the start, largely because GM plans to close four U.S. factories. The union has promised to fight the closures. One Canadian assembly plant, in Oshawa, is also set to close at the end of the year.

Here are the main areas of disagreement:

  • GM is making big money, $8 billion last year alone, and workers want a bigger slice. The union wants annual pay raises to guard against an economic downturn, but the company wants to pay lump sums tied to earnings. Automakers don’t want higher fixed costs.
  • The union also wants new products built in the four U.S. factories GM wants to close. The factory plans have irked some workers, although most of those who were laid off will get jobs at other GM factories. GM says it currently has too much U.S. factory capacity.
  • The companies want to close the labour cost gap with workers at plants run by automakers outside North America. GM’s gap is the largest at $13 per hour, followed by Ford at $11 and Fiat Chrysler at $5, according to figures from the Center for Automotive Research. GM pays $63 per hour in wages and benefits compared with $50 at the foreign-owned factories.
  • U.S. union members have good health insurance plans but workers pay about four per cent of the cost. Employees of large firms nationwide pay about 34 per cent, according to the Kaiser Family Foundation. The companies would like to cut costs.

GM currently has healthy levels of inventory of some of its key, high-margin vehicles. Around the United States, the automaker has 12 vehicle assembly plants, 12 engine and power train facilities, and a handful of stamping plants and other facilities.

As of Sept. 1, GM had 96 days supply of its Chevrolet Silverado pickup truck, 59 days supply of its Chevrolet Equinox SUV and more than 100 days supply of the Cadillac Escalade.

Strike pay provided by the UAW, which has been building up reserves in preparation for possible industrial action, is about $250 per week — far below their normal wages.