DETROIT – The United Auto Workers did what they always do in moments like this. On a sleepy October Saturday afternoon, while Michigan State was dispatching Indiana University in Spartan Stadium and Michigan was enjoying a greatly needed bye week, the union announced it [quoting the news release]: "served official notice to GM terminating the National Agreement and Salaried Master Agreement effective at 11:59 p.m. Sunday, October 25." That of course set off the headlines there is now a dreaded strike deadline in place.
While factually correct, the reality is it is not dreaded, and the chances of a strike are minimal. It's just that after taking more than a month to achieve its national agreement with Fiat Chrysler, in an embarrassing rejection of the first tentative agreement by the rank and file, the UAW want to get its pattern agreement with General Motors and Ford sooner rather than later.
These now quadrennial talks kick off traditionally in July with the famed "handshake." Negotiating teams on both sides begin discussions on both local contract agreements and the national contract continuously. Hours upon hours are spent putting together the base proposals and the targets each side hopes to achieve. The Union then looks at what they have in hand and picks the lead company to build a pattern agreement; one the other two companies end up following for the most part.
The UAW is looking for the best possible deal. We are three months into this 2015 process and the Fiat Chrysler talks that went in fits and starts delayed the pattern settlement. GM and Ford negotiating teams did some work but the heavy lifting remains. The pressure is on in that the pattern agreements are traditionally long since finished by now. In 2011, with the Bankruptcies fresh on everyone's minds, they finished all three contracts by Oct. 11. Here we are on Oct. 24 with one agreement in the bag and the UAW feeling pressure to wrap the process before the snow flies or the holidays arrive.
So the UAW does what it does when it's feeling like the auto companies need a little bit of prodding when the talks bog down. It pulls out its biggest and most inelegant weapon, the strike.
You will recall that the UAW did this with FCA a couple of weeks ago. The picket signs were sent to the local union halls, the strike assignments made and the rank and file was ready to walk at midnight Oct. 7. Just minutes before the deadline they reached their tentative agreement. It's a dramatic move meant to move things along and it is done because it works. Yes, it puts everyone involved on edge, but it moved the ball over the goal line. The UAW is looking for some similar persuasion in this instance as well.
Now, at this stage of the game anything can happen. Often times when these announcements are made, as long as there is movement the union feels is positive, it can and often does extend the strike deadline. If not, then a strike could be called.
But recall that both UAW President Dennis Williams and GM CEO Mary Barra, who are involved closely in these negotiations, have repeatedly said since July a strike would constitute a failure and both committed to not allowing that to happen. A strike is costly and the company can ill afford to lose millions of dollars in a walk out and the union's VEBA retirement healthcare fund is backed with company stock. So losses caused by a strike hurt union membership as well.
There is no upside to a strike. Still, the Union has its one blunt instrument at its disposal and is quite willing to threaten to use it. Everyone involved knows all of this, understands the theater involved, but considering the edgy rank and file at FCA turned down the first proposal, there is genuine need for the union negotiators to show membership they are going to the wall and laying it on the line in these talks.
So the deadline is set, the talks now proceed in marathon session, and the rank and file waits to see what it can expect in a tentative agreement. The clock ticks, the ever so scary strike deadline looms and life goes on. Expect a tentative agreement soon while realizing a strike, though remote, could happen.
Let's see how less sleepy an October Sunday can be.