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Running head: United auto workers/ general motors labor issues


United auto workers/ general motors labor issues

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Negotiators from the United Auto Workers union and General Motors are back at the bargaining table Saturday morning, trying to reach a deal on what is expected to be a groundbreaking labor agreement, after a round of all-night bargaining. The negotiations began on Friday morning and the two sides hashed it out until about 4:30 a.m. ET Saturday before deciding to take a break, according to an update on the voice mail of a GM spokesman. The round of talks began Friday and passed a midnight contract expiration deadline without a new labor agreement or a strike, as 75,000 UAW members at GM waited to hear if they would be hitting picket lines. The contract extension appeared to be an informal one, as the union leadership agreed to keep their members on the job, but did not grant a formal extension that would require several days of notice by one side or the other to end. While that keeps the pressure on negotiators to reach a deal, the fact that the two sides continued to talk appeared to be a sign of progress towards a new labor agreement. (Leslie, Stuart W. Boss Kettering. 2005)

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"I'm still on hold" said Chris "Tiny" Sherwood president of local 652 of Lansing Michigan, soon after the midnight deadline. He said his members who were working the 6 PM to 4 AM shift at the local GM plant were still on the job as midnight came and went. If workers they do walk, it could cripple the nation's No. 1 automakers' efforts to turn around troubled North American operations that have been losing money for nearly three years. Negotiations are aimed at reaching a new contract seen as crucial to the company's efforts to stem losses and improve its competitiveness with nonunion rivals from Asia and Europe. But analysts said that the automaker could probably weather a short strike. It could also lead to a change in who has responsibility for health-coverage for retired workers, whose medical bills are now being paid by their former employers. The automakers would like to shift $100 billion of those costs to a union-controlled trust fund they would fund.

Despite the challenges of crafting such a radical change, most industry experts expect a deal to be reached without a strike, even if negotiations don't produce a deal by the deadline. "It's in the endgame, that's for sure," said Harley Shaiken, a professor at the University of California at Berkeley, who specializes in labor issues. "I suspect it's most likely that we'll see the contract extended and negotiations continue. But I would emphasize you never can tell. A strike is unlikely, it's never impossible." David Cole, chairman of the Center for Automotive Research, said he thinks there is maybe a 25 percent chance a deal could be announced Friday night, and a 75 percent chance of an extension, with virtually no chance of a strike.

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Late Thursday afternoon, the United Auto Workers said it tapped GM as its negotiating target, a position that gives the nation's No. 1 automaker a strategic advantage over its rivals but also raised the risk it could be hit with a strike. After that decision to focus on GM, the union's talks with Ford Motor and Chrysler Group took a back seat to the GM talks, even though those companies' contracts also had been due to expire Friday night. The union and those two automakers agreed to an indefinite extension.  GM investors reacted positively to the news that the company had been selected as the union's target. Shares of GM were up 2 percent in late afternoon trading in New York Friday. Ford shares, by contrast, were little changed. Automakers generally prefer to be the target of talks. Since the union tries to have all three contracts follow a pattern, the company that gets the first deal has a better chance of having its negotiating goals addressed in the contract. By picking GM, the union has chosen not only the largest U.S. automaker, but also the one that is by far the healthiest financially. GM is far more advanced in its turnaround plans, which aim to end years of losses in its North American auto operations. Ford and Chrysler are still losing money in those core operations, although Ford reported a profit for the corporation as a whole in its second quarter. GM also has had stronger sales than its U.S. rivals this year, although a much better-than-expected sales month in August still left GM with year-to-date U.S. sales nearly 8 percent below a year ago sales. UAW Vice President Cal Rapson, who is leading the negotiations with GM for the union, sent a letter to GM locals Friday telling members to prepare to walk out if necessary. "Our meetings have produced some progress toward a new agreement," he said in the letter. "There are significant differences that remain before we conclude these negotiations and a lot of work remains to be done in a short period of time.

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"As the deadline fast approaches, we cannot tell you whether we will need to go on strike," he said. "We continue to work diligently to avoid this type of drastic step, but we need to see some serious movement soon. Unless this happens, a strike might very well be unavoidable." Chris "Tiny" Sherwood, president of UAW Local 652 in Lansing, Mich., which has about 3,000 of more than 4,500 members working at a GM, said he and his members are hoping for the best and preparing for the worst, making picket signs in case they need to walk out. (Rae, John B. 2007)


Leslie, Stuart W. Boss Kettering. 2005: Wizard of General Motors Columbia University Press

Maxton, Graeme P. and John Wormed. 2005, Time for a Model Change: Re-engineering the Global Automotive Industry

Maynard, Michelin. 2006. The End of Detroit: How the Big Three Lost Their Grip on the American Car Market

Rae, John B. 2007. The American Automobile: A Brief History.

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