Rod Meloni: Perspective on day 2 of the UAW-GM national strike

By Rod Meloni - Reporter, CFP ®

DETROIT - It's been more than a decade since the UAW felt the need to strike GM and take the entire company down. Most of the time, when things get contentious, the union goes for a targeted strike.

That means shutting down one plant that supplies lots of other plants, slowly winding operations down and turning up the economic heat. There appear to be several reasons behind this decision. The union rank and file genuinely feel left out. They took pay cuts, ratified concessionary contracts and did everything the company said it needed to achieve mutual survival.

Since then, GM has vastly exceeded expectations. Over the last four years, GM has made its highest ever profits; some $35 billion. Yes, the rank and file received their hefty annual profit-sharing checks, but they are looking for GM to pony up some, or even a lot, of what they sacrificed in the bad old days. GM has said it continues to try and compete with the transplants [Toyota, Nissan and Honda] and its union employees are making about $10 an hour more and want to level that playing field. Thus, the gulf between the two parties.

The dark cloud hanging over this strike is the UAW corruption scandal. UAW President Gary Jones has not taken a single question from the media during his presidency. Most recently he's had no comment on his home being raided and searched by the FBI and the IRS. No comment on his successor's arrest on embezzlement, conspiracy and wire fraud charges. He slid out the back door of the Ren Cen yesterday with nothing to say to the media. While the union has done everything in its power to separate the strike from the scandal, it's virtually impossible. UAW Region 5 Vice President Vance Pearson will go before a St. Louis federal judge tomorrow [Sept. 17, 2019] for an arraignment. Whether the U.S. Attorney in Detroit will move on the "unnamed" UAW executives named in the Pearson complaint, living lavishly on the union dime during this strike, is anyone's guess. It hangs like a pall over the proceedings and causing many on the picket line to express their disgust. Still, the union faithful have put their trust in negotiators to get a better contract.

Having risen early this morning to appear on Local Four News This Morning, I had a chance to see how the picket lines looked and witnessed a bit of a throwback to the bad old days of UAW strikes. The rank and file had their picket signs and a spring to their step at Orion Assembly. There were also  some 300 white collar employees who were required to report to work. The union takes a dim view of anyone crossing their picket lines. When the management employees looked to drive into the entrance  the picketers would deliberately gather and stand in front of each vehicle. Harsh words were often exchanged and no matter how slowly the driver tapped the brakes, picketers refused to get out of the way. This caused a long traffic jam on Silver Bell Road. Other picketers did the same thing in front of semi cabs going into the truck entrance to pick up trailer loads. This also caused another traffic jam. Somehow, some way, no one was hurt while we were there.

Yesterday I wrote about how the rules changed in how the UAW and the car companies conducts a strike in the modern media era. Today we saw still more of the drama play out. Let's start with the president of the United States. He tweeted the following Sunday night about 7 p.m. "Here we go again with General Motors and the United Auto Workers. Get together and make a deal!" That might have gone unnoticed until GM's own Media Relations Chief Tony Cervonne replied "I couldn't agree more." Still, let's wind the clock back 24 hours for some context. Local Four first reported on Sunday GM gave the UAW a substantial offer about an hour and a half before the strike deadline Saturday night. The Union decided at that point it was too late. It had already announced its leadership strike vote meeting and press conference to announce the strike Saturday afternoon. That came about seven hours before the deadline. Highly unusual move. GM likely thought it could get an extension. No dice! So, Sunday morning after the UAW made its national headlines with a strike announcement carried coast to coast, GM broke with tradition. Within minutes it sent out the highlights of its deal offered Saturday night and ignored, promising to offer $8,000 signing bonuses, keep the gold-plated healthcare the rank and file already enjoy, putting product in Hamtramck and Lordstown, Ohio. Not pleased, GM management upped the ante. It wasn't enough to explain the deal. It brought TV cameras and lights into GM World in the Ren Cen basement and did an interview with its Manufacturing Executive Vice President Gerald Johnson and then sent the video to any media outlet with an interest. Game on! This angered the UAW to the point where it sought out TV cameras of its own. UAW-GM Vice President Terry Dittes got up early and found CNN and CNBC crews at the Detroit Hamtramck picket line. He decried GM's media blitz with one of his own. He said "We in the Union do not negotiate in the press -- In all my years I have never disclosed those details outside the bargaining table." He then proceeded to do just that. To characterize just how much work there is to do on the national contract he said, "Only 2% of our proposals have been tentatively agreed to." Tradition says you don't do that either. Yet, by 10 a.m. this morning the dust had settled. Both sides agreed to go back to the bargaining table. It appears to be business as usual. We shall see.

Now, everyone has the same question: How long will this strike last? No one knows for certain, not even the negotiators. In that instance, we are instead left to look at the tea leaves; the signs giving us a window into the company's concerns. General Motors' global operation is highly integrated. It runs on a just-in-time parts system. The parts arrive in the plant just in time to be installed. No parts, no assembly.

So, while General Motors' three dozen or so plants in the U.S. are idled, looking at what GM is doing with parts helps give a picture of its concern about a long strike. Today, Center for Automotive Research analyst Kristin Dziczek explained a look in this direction gives us reason for optimism.

She said, "GM has their suppliers all working this week, building inventories. So, they're not like ‘batten down the hatches, we're in for a long haul. I think folks are fairly encouraged they're back to the table and hoping they get a deal."

She added a contract hammered out by the end of this week is not necessarily out of the question.

"I want to hope that it's possible, ya know? But the contours GM put out seem positive and seem like they're certainly working in good faith. We don't know all the details behind the GM summary." She added anything can happen but the company is incentivized to move things along: "A really long strike hurts everyone. It hurts workers, it hurts the company, that's the whole point. It's supposed to put enough leverage on everyone to get to, to see clear to a deal."

We all know optimism can turn to dark on a dime. But, as long as the union and company keep talking, there is hope. For now, they're talking. The next good sign would be word the talks have gone into the traditional, final, 24/7 push. We're not there yet.  

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