The United Auto Workers union has targeted General Motors for negotiations, setting the stage for a possible strike there later this month.
GM and the UAW talks could be especially contentious because GM plans to shut four of its US plants over the course of this year and early 2020. GM says the move is necessary to save $4.5 billion that can then be invested in the development of electric and self-driving cars. GM said it is working to find jobs at other plants for many of the affected hourly workers.
The union argues GM should be able to find other vehicles to build in those factories, which employed more than 3,000 union members between them at the time of the closing announcement last November. The UAW is likely to make saving as many of those jobs as possible a top priority of the current negotiations.
“[GM CEO] Mary Barra said from the outset of these talks that we will stand up as we tackle a changing industry. We are ready to stand strong for our future,” said UAW President Gary Jones.
GM has 46,000 UAW members on its payroll. It says they earn an average of about $90,000 a year, plus benefits.
GM, Ford and Fiat Chrysler, the three unionized American automakers, don’t actually mind being tapped first as the union’s “target,” even with the risk of a strike. Being first makes it more likely that the company will reach its unique goals at the negotiating table. The union typically tries to get the other two automakers to agree to a deal similar to the one negotiated with the automaker that goes first.
“We look forward to having constructive discussions with the UAW on reaching an agreement that builds a strong future for our employees and our business,” said a statement from GM.
The contracts with GM (GM), Ford (F) and Fiat Chrysler (FCAU) all are set to expire at 12:01 am on September 15, although now the Ford (F) and Fiat Chrysler (FCAU) contracts will probably be extended as talks with GM (GM) play out.
Earlier Monday the union announced membership at all three automakers had voted overwhelmingly to authorize a strike if necessary. Such votes are a typical part of any negotiation and do not necessarily signal that a strike will take place.
But this could be a difficult round of negotiations at all three automakers. Car sales have been slowing and the automakers are all looking for ways to free up cash to invest in the next generation of vehicles. The union wants guarantees that the automakers will find vehicles to build at all their US plants to keep them open. The union is not eager to grant wage concessions to companies that are still very profitable. The three manufacturers had combined profits of nearly $16 billion last year. Although not a record, that amount of profit is much better than the past few decades, when automakers were building more cars and employing far more autoworkers.
The negotiations also come as a scandal continues, in which eight people associated with the union or Fiat Chrysler pleaded guilty to federal charges of a scheme to bribe union leadership. The investigation is ongoing, with federal agents using a search warrant to search the home of UAW President Jones last week, along with union offices. The union insists it is cooperating with the investigation.