Eastern Railroad Discussion > GM strike is on!

https://www.freep.com/story/money/cars/2019/09/15/uaw-strike-gm-autoworker-contract-talks/2333883001/

I hope all parties involved get it figured out sooner rather than later. I fear that everyone is going to lose.

The NY Times has some background.

The Lordstown plant is an issue. I was impressed the profit share was $11,000 per person.

https://www.nytimes.com/2019/09/15/business/autoworkers-union-general-motors.html?action=click&module=Top%20Stories&pgtype=Homepage

Posted from Android

One other point to ynderstand is that Industry Analysts estimate that there is 3 million in overcapacity for the production of cars in the US based on last years sales.

One point is GM is asking UAW to pay more for their healthcare portion despite raking in 33 BILLION in profits over the last three years.  Corporate greed?  How much profit is enough?

Yes, but how much has GM lost over the years?  That 33 billion may not even erase the red ink.  It's the same with the airlines-- 9/11 wiped out every profit made back to the Wright Brothers.  I have no problem with these companies raking it in when times are good, because they inevitably swing back to bad.
 

$63/hour wages and benefits, $11K profit sharing bonus, 4% cost on their healthcare program. Those GM profits go
to R&D and people who have invested in the company. They paid back the bailout money. The non-union plants in the
South build better quality products for less money, follow the $$$$.

Out

callum_out Wrote:
-------------------------------------------------------
> $63/hour wages and benefits, $11K profit sharing
> bonus, 4% cost on their healthcare program. Those
> GM profits go
> to R&D and people who have invested in the
> company. They paid back the bailout money. The
> non-union plants in the
> South build better quality products for less
> money, follow the $$$$.
>
> Out

Exactly! The UAW is the highest paid organized labor force in the world, yet each individual work group is only as good as the worst employee/worker. I remember back in the 1970s, a number of us always ate in the Salaried Cafeteria, and one of the regulars at our table was the Superintendent of the Locomotive Division (the big bay where all locomotives were assembled). One day he was a bit late fro lunch, and finally showed up with kind of a long face and didn't say much. I finally asked him what was bothering him. He related that they had been having an attendance problem, and one guy was always missing days of work. The Union Steward had been talked to, the man had been talked to by the Steward and his Foreman, then the General Foreman, then by Labor Relations multiple times. Finally, the Foreman and General Foreman requested that the individual be brought before the Superintendent. The Superintendent says, "I already had the individual's file in front of me, and when he came in and sat down in front of me, all I could think to say was, 'Sir, why do you only work 4 days a week?' ."  "He looked me right in the eyes and said, 'Because I can't make it on only 3 days a week, boss.' "!  The bottom line was, GM was paying those folks so much, plus benefits, that there was a HUGE attendance problem developing throughout GM. 

GM eventually started an "Attendance incentive bonus", of $100 per quarter. Thus, for every quarter that an employee had perfect attendance, he/she received an extra $100 in their pay check. Plus, if he/she went the whole 4 quarters with perfect attendance, the threw in an extra $100, thus totalling $500 extra per year, JUST TO SHOW UP FOR WORK!!!!!

GM employees pay a lot less in thier share (in the single digit %) of health premiums than most of us others in industry. And even with the second tier of employees since the the turnaround making less than the more senior workers, they make more than most of us, plus perks. I base this on knowing workers in the industry and reading up on those kinds of things. Someone disagreed with me in another post and he apparenty bases his response on opinon.

Victor A. Baird
http://www.erstwhilepublications.com


nsrlink Wrote:
-------------------------------------------------------
> One point is GM is asking UAW to pay more for
> their healthcare portion despite raking in 33
> BILLION in profits over the last three years. 
> Corporate greed?  How much profit is enough?

GM, and many other companies, has been able to produce more and better vehicles with much more technology. Robots to lift and position parts, robots to paint and treat vehicles with zinc finish, etc. Outsourcing some parts and sub-assemblies.

Fewer people making more cars. Even with high wages, GM can sell trucks and SUVs at a substantial profit.  I believe .the current number of labor hours to assemble a GM truck is about 29, down from about 40 in the 1990s. Fewer people making better trucks selling at a higher profit. Good

That works well in a closed market. When cars made in Korea or Japan or Alabama with even better technology and quality control compete directly with GM cars, the ability to pass on increases in labor costs are limited.  That burning auto carrier in Brunswick GA last week had about 2,000 vehicles on it when it left Korea...



Edited 1 time(s). Last edit at 09/16/19 13:23 by Lackawanna484.

It isn't just stuff from the Orient, the quality on both MB and BMW cars built in US non-union plants exceeds
those built in Europe.

Out

callum_out Wrote:
-------------------------------------------------------
> It isn't just stuff from the Orient, the quality
> on both MB and BMW cars built in US non-union
> plants exceeds
> those built in Europe.
>
> Out

An excellent point. One fact that is often overlooked within union work groups is, they breed and force mediocrity. That is, the work level is only as good as the worst employee.

Several comments.

Best coverage of this significant strike, as might be expected, will be found in the two Detroit newspapers / websites. Member ts1457 already cited the Detroit Free Press in the lead-off post to this thread. The Detroit News also has excellent, in-depth coverage. Even in this era of reduced-size newsrooms and fewer reporters with regular beats, both newspapers have maintained staffs who know the industry well, cover it regularly, and have the sources. It may not be what it once was, but it's still about as good as it comes these days. Their coverage will be more complete and in-depth than from national media sources. TO member toledopatch's own paper, the The Blade (Toledo), is also quite good. Toledo has a significant automotive plant presence (the huge Fiat Chrysler Jeep assembly plant) and major components manufacturers, particularly Dana Corp. GM Powertrain has a major facility in Toledo, employing about 1500 union workers, and located not far from Alexis Tower, mentioned here on TO from time to time.

Both the Free Press and Detroit News are not behind paywalls, at least that I have ever hit, and I read articles online from both with some regularity. Other industry resources, such as the leading trade journal, Automotive News are however behind expensive paywalls. As for other resources, the New York Times article cited by Lackawanna484 got the basic outline straight, but lacks the depth of the Detroit papers. Likewise the Wall Street Journal. As this progresses, that's to be expected of national media.

This strike is a significant one, and it's worth your attention to seek out the best resources for news about it. The impact on railroads will be real, and likely fairly swift. I would anticipate some crew layoffs, possible train annulments and combination of traffic with other trains, and in fairly short order. But the impact on the economy is of greater concern, particularly if the strike is protracted. Strikes among the Detroit Three (as GM, Ford and Fiat Chrysler are now typically known) have substantial economic effects that radiate outward very rapidly as suppliers and others are affected. We in Michigan watch these things very closely.

Although I have never worked directly in the industry (as close as I ever got was working for a packaging supplier), I have as an outsider been fairly close to the auto industry since I was a kid in St. Louis, where GM, Ford and Chrysler all had major assembly plants. I have seen several strikes at close hand. Kids I went to school with, and other friends and co-workers through the years, had parents or siblings who were UAW members. The issues involved this time are significant and complex.

Psychological factors always come into play in work stoppages, but they are likely to be more significant than usual in this strike. The UAW leadership is under a serious dark cloud due to a federal corruption investigation that has already resulted in the conviction of seven high union officials. The investigation centers around the alleged diversion of some $120,000 from union resources that were to be used for a new training center to use by union officers for expensive housing, golf, meals, and other amenities. Union officers and negotiators may feel that they have to double-down on their negotiating positions and compromise less in order to save face, and to prove to the rank-and-file that they are standing tall, are worthy of their offices, and can't be pushed into contract conditions they do not want. And members may well identify with such sentiments, even as some openly state to the media that they are angered and embarrassed by the actions of their top officers. It's the old adage about a cornered tiger being the most dangerous.

GM for its part is taking the unprecedented action of describing publicly some of the features of its offer, albeit without all details. Frankly, I was very surprised at this action, but that said, I thought it was a strong offer. That public disclosure could be a play to communicate more directly with the rank-and-file, and to start a conversation there in social media that could help to move the compromised union leadership to come to terms. The last time there was a strike against GM, for two days in 2007, social media barely existed -- Facebook had been available for almost exactly a year (opening to the public 9/26/06), Twitter since March 2006, and Instagram (2010) was still a gleam in their founders' eyes. Since then, numerous individuals and groups have grown in their skill to use social media for their ends and goals. Politicians, not the least of them being a certain occupant of the a big white house in Washington, have since that time more than amply demonstrated (for better or worse) the ability to communicate directly to the populace via social media, bypassing political structures and the media. But this too could be risky. Union members could resent the fact that offer details were disclosed publicly, bypassing the usual channels of communication first to union negotiators, then to the rank-and-file membership, and only later to the public. They could harden their position not to come to a deal too easily as a result.

All of this is a potentially combustible backdrop for the strike, and to these contract negotiations. If it ignites and helps to cause a protracted strike, then like member ts1457, I would fear that there will be a lot to be lost by many, both at GM, in the UAW, and in our nation overall. Let's all hope that cooler heads prevail on both sides, and that there is a rapid settlement.

Resources from recent stories, all of which also have numerous other additional stories and links for added detail:
The Detroit News - a good commentary piece by respected automotive writer Dan Howes, whom I regard as among the best in the business: https://www.detroitnews.com/story/business/columnists/daniel-howes/2019/09/15/uaw-gm-strike-fueled-corruption-probe-mistrust/2335691001/

Detroit Free Press -- an update on the current state of the negotiations, which are underway on Monday evening but described as "tense and required some breaks": https://www.freep.com/story/money/cars/general-motors/2019/09/16/gm-strike-uaw-contract-why/2345348001/

The Blade (Toledo) -- good story on the backdrop of the union's troubles: https://www.toledoblade.com/business/automotive/2019/09/16/federal-criminal-investigation-uaw-union-leaders-gm-strike/stories/20190916166

Closing note: even though I have recently worked in relation to the industry, none of this represents any insider knowledge from my past colleagues and contacts. Everything said was referenced from the same public sources that you can read. Evaluative comments are my own personal conclusions from my reading of those sources. As always, your results may vary.

MC
Muskegon, Michigan



Edited 4 time(s). Last edit at 09/16/19 19:03 by ironmtn.

callum_out Wrote:
-------------------------------------------------------
> It isn't just stuff from the Orient, the quality
> on both MB and BMW cars built in US non-union
> plants exceeds
> those built in Europe.
>
> Out

How does the quality of the unionized BMW and MB plants in the US compare to those in Europe?

portlander Wrote:
-------------------------------------------------------
> callum_out Wrote:
> --------------------------------------------------
> -----
> > It isn't just stuff from the Orient, the > quality
> > on both MB and BMW cars built in US non-union
> > plants exceeds those built in Europe.
> >
> > Out
>
> How does the quality of the unionized BMW and MB
> plants in the US compare to those in Europe?

No comparison is possible. The BMW plant in Greer, SC (near Spartanburg) and the Mercedes-Benz plant in Vance, AL (near Tuscaloosa) are both non-union plants, And for each company, they are their only USA assembly facilities.

There is a serious, but very readable, professional paper on the subject available online: https://pdfs.semanticscholar.org/dea7/aea6d175ae08e7722806889a6d418079885f.pdf
The paper also discusses the Volkswagen assembly facility in Chattanooga, TN, which is also non-union.

MC
Muskegon, Michigan

ironmtn Wrote:
-------------------------------------------------------
> The paper also discusses the Volkswagen assembly
> facility in Chattanooga, TN, which is also
> non-union.

Which is interesting. In Germany, unions have a place in the management of the company, so Volkswagen would have been OK if the Chattanooga plant got organized. However the workers have voted down unionization twice now.

Thanks for a detailed summary of the GM situation, ironmountain. There are many elements in play right now.

The VW situation is curious, as well. The company tried to establish a company union several years ago. That was rejected. The workers voted down representation by UAW in elections that were questioned by both sides.

Alleged corruption in the UAW was an element.

Posted from Android

ironmtn Wrote:
-------------------------------------------------------
> portlander Wrote:
> --------------------------------------------------
> -----
> > callum_out Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > It isn't just stuff from the Orient, the >
> quality
> > > on both MB and BMW cars built in US non-union
> > > plants exceeds those built in Europe.
> > >
> > > Out
> >
> > How does the quality of the unionized BMW and
> MB
> > plants in the US compare to those in Europe?
>
> No comparison is possible. The BMW plant in Greer,
> SC (near Spartanburg) and the Mercedes-Benz plant
> in Vance, AL (near Tuscaloosa) are both non-union
> plants, And for each company, they are their only
> USA assembly facilities.
>
> There is a serious, but very readable,
> professional paper on the subject available
> online:
> https://pdfs.semanticscholar.org/dea7/aea6d175ae08
> e7722806889a6d418079885f.pdf
> The paper also discusses the Volkswagen assembly
> facility in Chattanooga, TN, which is also
> non-union.
>
> MC
> Muskegon, Michigan

That's kind of what I figured. So it's more of a comparison of the American worker versus the European worker, not union vs. non union. 

Thanks for the link I'll take a gander. . .

Editorial in today's (9/17/19) Detroit News puts the blame for the GM strike squarely on the effects of corruption in the union leadership.
https://www.detroitnews.com/story/opinion/editorials/2019/09/16/editorial-blame-strike-uaw-corruption/2345455001/

The News also has a story which went up on the website late on Monday evening (9/16/19) that a GM strike lasting more than a week could put the state of Michigan into a recession. That's a reflection of how large are the effects radiating out through the large supplier community in the state, plus effects from reduced retail and other sales and economic activity. This is against the backdrop of another possible hit due the the fact that the governor and state legislature have not agreed upon and passed a budget, as required by Oct. 1. Notices have already gone out to state employees of pending layoffs if the budget impasse is not resolved. A potential perfect storm on the horizon for Michigan...and it didn't blow in off of one of the Great Lakes.

The News has traditionally been considered the more conservative and pro-business of Detroit's two newspapers, with the Free Press traditionally considered more liberal and pro-labor. Such distinctions are however probably are not as sharply defined as in years past. Both the News and the Free Press operate under a Joint Operating Agency (JOA) arrangement that allows them to consolidate business office, advertising, production and distribution activities while maintaining separate editorial departments for news-related functions. The Detroit News is owned by MediaNews Group, for which I worked some years ago in Colorado. The Detroit Free Press is owned by Gannett, which is dealing with a potential takeover by distressed properties hedge fund Alden Capital Management.

MC
Muskegon, Michigan



Edited 3 time(s). Last edit at 09/17/19 09:33 by ironmtn.

callum_out Wrote:
-------------------------------------------------------
> $63/hour wages and benefits, $11K profit sharing
> bonus, 4% cost on their healthcare program. Those
> GM profits go
> to R&D and people who have invested in the
> company. They paid back the bailout money. The
> non-union plants in the
> South build better quality products for less
> money, follow the $$$$.
>
> Out

That isn't backed up with fact. Buick and Chevrolet are number two and four in quality and yet do not have plants in the south.

Posted from Android

NYSWSD70M Wrote:
-------------------------------------------------------
> callum_out Wrote:
> --------------------------------------------------
> -----
> > $63/hour wages and benefits, $11K profit
> sharing
> > bonus, 4% cost on their healthcare program.
> Those
> > GM profits go
> > to R&D and people who have invested in the
> > company. They paid back the bailout money. The
> > non-union plants in the
> > South build better quality products for less
> > money, follow the $$$$.
> >
> > Out
>
> That isn't backed up with fact. Buick and
> Chevrolet are number two and four in quality and
> yet do not have plants in the south.
>
> Posted from Android

JD Power ranks the Chevrolet as 4 and the Buick as 5 for three year quality.  Behind perennial leader Lexus, and Porsche and Toyota.   "All the German brands" showed improvement at better than the industry average.  It's not clear whether that includes the South Carolina BMW and the Alabama Mercedes or just European made cars. 

More info:    https://www.jdpower.com/business/press-releases/2019-us-vehicle-dependability-studyvds