Jamie L. LaReau
Detroit Free Press
Published 3:18 PM EDT Sep 18, 2019
General Motors and the United Auto Workers returned to bargaining early Wednesday with negotiators buckling down at “all levels.”
The parties have been meeting steadily at GM’s headquarters in Detroit in an effort to reach a four-year contract agreement as 46,000 union workers enter the third day of a nationwide strike.
Sources close to the talks told the Free Press that the bargaining committees for the two sides worked into the early evening Tuesday. They resumed discussions “very early” Wednesday.
“They’re meeting at all levels right now,” said a person briefed on the talks.
Another said, “The talks are continuing, and that’s a good thing. I’ve heard some on the union side say they were maybe making progress on some things.”
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Another person close to the negotiations said that union negotiators were initially distracted by addressing a federal corruption investigation, a characterization disputed by those close to the UAW bargainers who said they have been available and willing to negotiate at all times.
A cloud hangs over the UAW as a long-running corruption investigation that started with the union’s joint training center with Fiat Chrysler has touched the union’s GM Department and its leadership. Current union President Gary Jones’ suburban Detroit home was raided late last month, as was the California home of Jones’ predecessor, Dennis Williams. Jones’ successor as regional director, Vance Pearson, was charged Sept. 12.
UAW workers at 55 GM facilities across the United States went on strike at midnight Sunday after the UAW let its contract expire the night before.
The sides resumed bargaining Monday morning around 10 a.m., but there have been some tense moments, said those familiar with the negotiations.
Then, on Tuesday, GM blindsided the UAW leadership when it told the union the company had stopped paying for health care coverage for striking workers the night before.
That means striking GM union workers are eligible for union coverage, including union-paid COBRA to continue their health care benefits. The union had $721 million in its strike fund in 2018 and temporarily increased dues in March this year to boost it to $850 million. That fund also will pay striking workers $250 a week.
The UAW said its lawyers are reviewing GM’s move to determine if “further action is required,” Terry Dittes, vice president for the union’s GM Department, said in a Sept. 17 letter to members. As of Wednesday morning, UAW lawyers were still reviewing the matter.
Health care is one of the key points in the negotiations that contributed to the bargaining committee rejecting GM’s initial proposal, sources have told the Free Press.
One person said GM has proposed that workers pay 15% of their health care costs, up from the current estimated level of 3% of health expenses. Another person familiar with talks said GM’s offer preserves current health care benefits at the same cost.
GM and Ford each spend $1 billion a year on worker health care, which some industry observers consider unsustainable. The average U.S. worker pays about 28% of health care costs, according to the Center for Automotive Research in Ann Arbor.
Problem over pay
Also at issue are wages. GM said it offered a wage increase, which the UAW rejected.
Sources familiar with GM’s proposal said the automaker offered workers a 2% increase in wages for the first and third year of the four-year agreement and a 2% lump-sum payment in the alternate years.
That would be a lower increase than was provided for in the 2015 contract. There, the UAW won a 3% wage increase during the first and third year and a 4% lump-sum for the second and last year of that contract.
GM says its UAW workers make an average of $63 an hour when factoring in total compensation, compared with nonunion foreign-based automakers who pay an average of $50 an hour, sources close to the automaker say.
GM must close that gap, said a source close to GM. “The biggest piece of that workplace cost differential is workplace composition.”
GM wants to increase the number of temporary workers it uses in plants, arguing those people are well-trained on the jobs and can relieve permanent workers who take vacations or are otherwise absent from work.
About 7-10% of GM’s workforce in the United States is made up of temporary workers. The union wants the automakers to create a path for them to progress into a permanent job.
If GM can hire more temps, that will lower costs because the average temp makes about $15 an hour compared with a new union worker who starts at $17 an hour, and can rise to $29 an hour after eight years.
“That is all part of the bargaining that is going on,” said this source.
Autoworkers in Mexico earn an average $2.70 an hour, in part because it’s nearly impossible for them to form an independent union. In late 2014, GM said it would commit $5 billion to Mexican plants through 2018, creating some 5,600 jobs. That’s a sore spot with the UAW.
The UAW, which represents about 150,000 workers at GM, Ford Motor Co. and Fiat Chrysler Automobiles, chose to negotiate first with GM and use any new contract as a template for talks with the other two.