Share this article

print logo

UAW strike at GM: What it means for WNY

As United Auto Workers members walked picket lines outside General Motors plants in the Town of Tonawanda, Lockport and elsewhere Monday, the big question was: How long might this strike last?

No one can say for sure. But the UAW and GM have a number of significant issues to resolve, including workers' earnings, the fate of GM plants outside the region that face shutdown, and the status of temporary workers in factories.

"I think it could be a little bit longer" of a strike, said Arthur Wheaton, director of Western New York labor and environmental programs for the Worker Institute at Cornell University.

If the strike does drag on, the impact could be felt locally in different ways:

• Workers would have less spending power, as they give up their regular compensation from GM for strike pay from the UAW.

• Franchised GM car dealers have adequate vehicle supply now, but the automaker's stockpile could diminish if production is idled for a long time.

• The terms of a contract agreement could affect talks between the UAW and Ford on a new contract, including for workers at Ford's Hamburg plant.

The labor dispute between GM and the UAW covers 49,000 hourly workers and resonates here. Combined, GM's engine plant in Tonawanda and components plant in Lockport have about 3,000 employees. About 87% of them are hourly workers, and their pay will take a hit during the strike.

Before the strike began, GM disclosed an offer that included $7 billion in investments, 5,400 jobs, and "solutions" for plants in Ohio and Michigan that it said last year would not be allocated new products, putting those sites on a path to shutting down. GM is reportedly considering building electric vehicles at the Detroit-Hamtramck plant, and an electric vehicle battery plant in Lordstown, Ohio.

The last-minute offer prompted this response from Terry Dittes, a UAW vice president, according to Reuters: "Had we received this proposal earlier in the process, it may have been possible to reach a tentative agreement and avoid a strike."

GM said its offer also included wage or lump-sum increases in all four years of a proposed deal; an improved profit-sharing formula; and a ratification payment of $8,000. Specifics about the lump-sum payments and wage hikes were not disclosed.

The automaker said it was disappointed that the union had elected to strike. The UAW last went on strike against GM in 2007 in a walkout that lasted less than a day. A 1970 strike lasted 67 days.

"We have negotiated in good faith and with a sense of urgency," the automaker said. "Our goal remains to build a strong future for our employees and our business."

The UAW countered that the union had made sacrifices to "create a healthy, profitable industry" during troubled economic times. Now it wants GM to recognize the UAW members' contributions.

In a report before the strike began, Kristin Dziczek of the Center for Automotive Research framed the negotiations this way: "In an era of solidly profitable operations, the automakers are seeking to contain labor cost growth, while the UAW is looking to make economic gains and secure its members' jobs and future income."

Here are some other factors at play in the strike:

• Workers on the picket line will quickly feel the financial pinch.

"If you're not working the hours, you're not getting the money in the bank," Wheaton said. "It starts impacting your ability to pay for your mortgage and pay for your car payments and pay for all those types of things. It gets tough right away."

Workers on the picket line will receive from the UAW strike pay of $250 a week. Workers retain their health insurance.

The smaller checks could have impact the local economy, as striking workers limit their spending until a new deal is reached. Both the Lockport and Tonawanda plants are major economic forces in the region's manufacturing sector, and a prolonged walkout would trickle down to hurt GM's local suppliers, along with the stores, restaurants and other businesses that the striking GM workers frequent.

It will be costly for GM, too. The strike will cost the automaker about $310 million a day in revenues, said Morningstar Inc. analyst David Whitson.

• GM's use of temporary workers is a sticking point in contract talks. The UAW wants to convert temp workers to permanent status, and limit the amount of time GM can keep temporary workers, according to the Center for Automotive Research. GM and the rest of the Detroit Three sees this as a matter of preserving flexibility, using temp workers to cover gaps in shifts and, the automakers say, to stay competitive with international rivals in the United States.

"The strike isn't for all the legacy workers, the strike is more for pay equity for the plant," Wheaton said. It can be frustrating for newer hires and temp workers to work side-by-side with someone receiving greater compensation, he said, and to see workers identified as "temporary" one year after another.

When production is running at GM's Lockport and Tonawanda plants, they are powerful forces in the local economy. (News file photo)

But workers interviewed outside the Tonawanda plant on Monday said they were committed to the union's cause.

"We're in solidarity against General Motors," said Bob Gorenflo, UAW health and safety representative at the plant. "They need to bring up to snuff their unfair wages and benefits, even though we have made this company profitable, on the sweat of our backs."

• The strike isn't expected to immediately affect the availability of new cars and trucks for customers to buy from franchised GM dealers. Cox Automotive estimates GM has a 77-day total supply of cars, truck and SUVs, above the industry average of 61 days. That gives GM more of a cushion should the strike goes on for weeks.

"Consumers will likely not be disappointed if they want to buy a vehicle shortly after the strike starts," Whitson said.

But if the strike drags on, that stockpile will dwindle.

Wheaton noted that Teamsters members are refusing to deliver new GM vehicles to dealers in a show of labor solidarity, which could create logistical obstacles for GM to ship those vehicles.

• Whatever agreement emerges from the GM-UAW talks is expected to influence the UAW's negotiations with Ford Motor Co. and Fiat Chrysler, respectively. All three Detroit Three labor contracts were due to expire last Saturday. The UAW extended its deals with Ford and Fiat Chrysler, but not with GM, as the union focused on a deal with GM.

Ford has a manufacturing plant in the Buffalo Niagara region, with a stamped parts facility in Hamburg.

News staff reporter Keith McShea and wire services contributed to this report.

Story topics: / / / /

There are no comments - be the first to comment