Job security holds up General Motors contract talks as losses mount

United Auto Workers members strike outside the Flint manufacturing complex.
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DETROIT (AP) (10/9/2019) - Talks between General Motors and the United Auto Workers union have hit a snag over what the union says is GM's unwillingness to guarantee new products for U.S. factories.

Union Vice President Terry Dittes says in a letter to members Tuesday that a lack of commitment by GM to UAW-represented factories has weighed heavily on bargainers.

"We believe that the vehicles GM sells here should be built here," Dittes wrote. "We don’t understand GM’s opposition to this proposition."

He says any pay gains will be meaningless without job security from new products. Dittes says he told the company that there is no job security when GM sells vehicles in the U.S. that are made in other countries.

The union went on strike against GM on Sept. 16, halting production at U.S. factories. Parts shortages have forced the company to close one plant each in Canada and Mexico.

GM had no immediate comment.

The 24-day strike has cost GM production of 165,000 cars and trucks and has passed the point where the GM can make up lost volume, according to auto industry analysts.

That means losses are starting to mount for the company even though its dealers have enough inventory to get by for several more weeks.

The Anderson Economic Group in East Lansing estimates GM has lost $660 million worth of profits while workers have lost $412 million worth of wages as of Sunday. The total for workers includes union members, non union employees and suppliers.

The total number of workers directly affected by the strike reached 150,000, according to Anderson.

“What started as a concentrated event affecting a select group of workers has now ballooned in scope,” said Brian Peterson, AEG’s director of public policy and economic analysis.

AEG Principal and CEO Patrick Anderson estimates 1 to 2 percent of total payroll in Southeast Michigan has been lost to the strike.

The lost payroll accounts for a $155 million loss in federal tax revenue and $9.1 million loss in state tax revenue.

The strike by 49,000 United Auto Workers began Sept. 16.

GM made another offer Monday and talks continued Tuesday, with both sides hung up on large economic issues. The union is pushing for hourly wage increases versus lump-sum payments favored by the company, according to a person briefed on the talks.

They're also haggling over pensions, faster wage increases for workers hired after 2007 and guarantees of new products for U.S. factories, said a person who didn't want to be identified because the talks are confidential.