Auto workers to strike over GM contract talks impasse, union says

The United Auto Workers union has said its 49,000 members at General Motors plants in the US will go on strike on Sunday night, because contract negotiations with the automaker had broken down.

The decision came after about 200 plant-level UAW leaders voted unanimously in favor of a walkout during a meeting in Detroit.

“We stood up for General Motors when they needed us most. Now we are standing together in unity and solidarity for our members,” UAW vice-president Terry Dittes said in a statement.

It was still possible that bargainers could hammer out an agreement, but UAW spokesman Brian Rothenberg said it would be unlikely.

The announcement came hours after the union let its contract with GM expire.

In a statement, GM said it offered improved wages, benefits and additional US jobs.

“It is disappointing that the UAW leadership has chosen to strike at midnight tonight. We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business,” the company said.

On Saturday, Dittes said in a letter to GM members that after months of bargaining, both the union and GM were far apart on issues such as wages, healthcare, temporary employees, job security and profit-sharing. The letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.

“While we are fighting for better wages, affordable quality healthcare, and job security, GM refuses to put hard working Americans ahead of their record profits,” Dittes, the union’s chief bargainer, said in a statement.

The strike will bring to a halt GM’s US production, and will likely stop the company making vehicles in Canada and Mexico too. That will mean fewer vehicles for consumers to choose from and make it impossible to build specially ordered cars and trucks.

The strike will be the union’s first since a two-day work stoppage at GM in 2007.

On Friday, union leaders extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors was still set to expire Saturday night.

The union picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company, meaning it was the focus of bargaining and would be the first to face a walkout. Picket line schedules were posted near the entrance to one local UAW office in Detroit.

Talks between the union and GM were tense from the start, largely because GM plans to close four US factories. The union has promised to fight the closures.

GM is making big money, $8bn last year alone, and workers want a bigger slice. The union wants annual pay raises to guard against an economic downturn, but the company wants to pay lump sums tied to earnings. Automakers don’t want higher fixed costs.

The union also wants new products for the four factories GM wants to close. The factory plans have angered some workers, although most of those who were laid off will get jobs at other factories. GM has too much US factory capacity.

The companies want to close the labor cost gap with workers at plants run by foreign automakers. GM’s gap is the largest at $13 per hour, followed by Ford at $11 and Fiat Chrysler at $5, according to figures from the Center for Automotive Research. GM pays $63 per hour in wages and benefits compared with $50 at the foreign-owned factories.

Union members have great health insurance plans but workers pay about 4% of the cost. Employees of large firms nationwide pay about 34%, according to the Kaiser Family Foundation. The companies would like to cut costs.

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