On the 24th day of the strike against General Motors, company CEO Mary Barra called United Auto Workers union President Gary Jones and Vice President Terry Dittes for a face-to-face meeting — their first since the strike began, according to three sources familiar with the meeting.
Barra met with the union’s leadership for about an hour Wednesday afternoon at GM’s Detroit headquarters. GM’s lead negotiator Scott Sandefur and Gerald Johnson, GM’s head of global manufacturing, were also present.
According to one source familiar with the matter, Barra called the meeting and pressed Dittes and Jones to agree to a deal, citing the risk of GM’s credit rating dropping to junk bond status.
Other sources familiar with the meeting could not confirm discussion of the company’s credit rating. But credit rating agency Moody’s did say in a note when the strike began that the chance of it doing material damage to GM’s finances would increase if it lasted more than two weeks.
The company has also faced shareholder pressure, primarily from union-friendly pension funds. The North America’s Building Trades Union, The California State Teachers’ Retirement System, and the New York State Common Retirement Fund — which hold shares in the company — have all sent letters to Barra expressing “concern” over the strike. Shares of GM (GM) closed slightly higher Thursday but are still down 11% since the start of the strike.
While Barra had been involved in the company’s negotiating strategy as the talks dragged on, her presence in the room was an indication of the increased urgency to end the longest auto industry strike in decades.
About 50,000 UAW members have been on strike for almost a month. They are surviving on strike pay of $250 a week. Meanwhile, GM losses are mounting as its factories in Mexico and Canada are idle, and many of its 10,000 US suppliers struggle from a lack of work.
Negotiations between GM and the union stalled over the weekend after the auto company rejected the union’s latest contract proposal.
After going into last weekend amid signs that a deal might be close, Dittes, the union’s chief negotiator, sent a letter to rank and file members Sunday saying negotiations had taken a “turn for the worse.”
The biggest sticking point is what happens in Mexico, where GM has four factories that produced more than 800,000 cars last year.
The union has insisted that GM bring product lines back from Mexico in order to save some or all of three GM plants where operations ended earlier this year and a fourth is slated to close by early 2020. The company said that it has offered “solutions” for the two assembly plants in Lordstown, Ohio, and the Hamtramck plant in Detroit, but those offers have not been acceptable to the union.
Dittes sent another email to members Tuesday citing GM’s refusal to make the shift. “We have made it clear that there is no job security for us when GM products are made in other countries for the purpose of selling them here in the USA,” he wrote.
The meeting between Barra and UAW signals a renewed eagerness to come to a deal. But UAW and GM’s lead negotiators have not met at the main table since Sunday, added the sources. The two sides did meet in their subcommittees late into last night and are meeting in sub groups Thursday, said a source.
The strike has cost GM more than $1 billion dollars, and direct wage losses for all employees total more than $624 million, according to new estimates from the Anderson Economic Group.