General Motors could confront first strike in 12 year

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Contract dealings between the United Auto Workers and Detroit automakers commonly go last possible minute. In any case, this go-round, chances of a walkout at General Motors are seen as running about even.

“There is with little question a higher probability than in recent years of a strike, which is positively not saying there will be a strike,” Harley Shaiken, a work relations professor at the University of California at Berkeley, told CBS MoneyWatch.

GM and the UAW’s present four-year work agreement expires Saturday at midnight.

“At that time we will have a statement whether there is a proposed tentative agreement, an extension or a strike. But for now they are still negotiating,” a UAW representative told CBS MoneyWatch by email.

A GM representative said talks with the work group are “progressing.”

At the point when dealings between the UAW and GM began in July, the sides were far separated on issues including wages and job security, Shaiken said. “There’s an unusually restive membership, and UAW leaders now don’t just have to negotiate a contract, they have to get it ratified.”

The UAW said not long ago that over 96% of GM laborers had voted to approve a strike.

Stagnant wages

Normal time-based compensations in the U.S. auto industry crested in 2010 and have since fallen generally 2%, or 16% when balanced for inflation, as indicated by Kristin Dziczek, VP of the industry and work economics group at the Center for Automotive Research. Senior UAW laborers have gotten two 3% pay increments over that period.

Alongside a boost in pay, the UAW needs to confine the positions of temporary laborers GM can utilize, a number that this year arrived at the midpoint of about 7% of its U.S. workforce. Temp laborers are paid as meager as $15 60 hour. Senior representatives procured by GM before 2007 acquire between $30 to $33 60 minutes, while entry-level contracts got after 2007 begin at about $17 an hour, with an eight-year movement to turn into a senior laborer.

“You could be on the line earning $33 and the person next to you is making $15 an hour as a temp worker,” said Shaiken, taking note of that numerous pay levels and statuses can weaken union solidarity.

Preparing to strike

Sign that a strike is an unmistakable probability originated from both the union and GM, with the UAW setting up its members for a possible walkout and GM expanding its vehicle inventory in front of a potential production slowdown.

“Historically, when Detroit automakers have a strike, they don’t try to operate the plants as some other industries have sought to do,” Shaiken said. “One thing they can do is increase their inventory — the more cars on dealers’ lots, the longer they can go when a strike kicks in.”

Automakers strive to have at least a 60-day supply of vehicles, and GM as of now has a 77-day supply, Shaiken noted.

The last strike against GM came in 2007 and finished following two days. From that point forward, American motorists have purchased a record number of new vehicles and GM has racked in record benefits, repurchasing $10 billion of its stock since coming out of bankruptcy in 2009.

The UAW is searching for a more noteworthy bit of that pie and to battle the closures of four U.S. plants. GM, in any case, is preparing for an economic slowdown in coming years and is opposing UAW efforts that would build its long haul costs.

GM has said the a lion’s share of its investments are made in the U.S., where it has 33 plants working contrasted and four facilities in Mexico.

A federal corruption test into the union includes another purpose of strain. FBI attacks a month ago on the homes of Gary Jones, the present president of the United Auto Workers, and his predecessor, signaled a dramatic escalation of a four-year test into illegal installments. The corruption investigation has so far prompted the feelings of eight people. On Thursday, a regional chief of the UAW was charged of stealing union assets as a major aspect of the extending government investigation.

“While these allegations are very concerning, we strongly believe that the government has misconstrued any number of facts and emphasize that these are merely allegations, not proof of wrongdoing,” the UAW said in an announcement Thursday. “We will not let this distract us from the critical negotiations underway with GM to gain better wages and benefits for the more the 400,000 members of our union.”

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