Pressure Increases On Striking Auto Workers

Industry News / 17 Comments

It took GM only 36 hours after the strike began to do this.

Since this past Sunday, United Automobile Workers (UAW) have launched a strike against GM as both sides failed to reach a new agreement over a new contract. This is the first time GM factory workers have gone on strike since the end of the Great Recession. One of the key reasons for the strike is funding health care. The UAW wants more than what GM is currently willing to give. Nothing new there.

According to the Detroit Free Press, GM has just announced its decision that will take effect immediately to shift worker health care payments to the union. In other words, the union is now charged with funding some health care benefits instead of GM. In case you're wondering, yes, this is a tactic on GM's part to increase the pressure to cut a deal as soon as possible. It's estimated GM could lose up to $100 million a day as the strike continues. However, some industry analysts think GM's strategy here could backfire.

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"They're pouring gasoline on the fire," said Harry Katz, the Jack Sheinkman Professor of Collective Bargaining at the School of Industrial & Labor Relations at Cornell University. "This induces the workers to get more angry. GM thinks this will scare them or get them to rethink the cost of their benefits. I think it's going to backfire. It's quick, rash and insensitive."

GM, however, believes this strategy will force the UAW to negotiate at a faster rate. Meanwhile, UAW lawyers are reviewing GM's latest maneuvers. It's not a situation the union wants to be in for long because its $750 million strike fund will only go so far, especially now that health care expenses are involved. Other legal experts are also questioning GM's decision, mainly because it will create ill will between the automaker and the UAW.

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Other labor law experts, meanwhile, see GM's move as a missed opportunity. Instead of ending the strike after two or three days with an agreement, GM gave the impression its workers were of little value. "This was a moment to rise above. And they didn't," said Harley Shaiken, a labor law expert at the University of California, Berkeley. "This was an ill-considered move that will anger ordinary UAW members without any corresponding gain for the corporation."

Given that GM has been earning record profits with high executive pay, it's no wonder the workers, who stood by GM during its bankruptcy and eventual recovery, feel they deserve more. GM, however, probably did not do itself any favors with its latest pressure tactic.

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