GM appeals directly to employees as the strike loss increases, UAW

DETROIT / WASHINGTON (Reuters) – General Motors Co took the unusual step of appealing directly to employees in a blog post on Friday that laid down the terms of the carmaker's latest offer aimed at ending a month-long strike and angering the union with which it is negotiated.

While highlighting GM's commitment to the collective bargaining process, the letter, signed by Gerald Johnson, Executive Vice President for Global Production, bypasses United Auto Workers (UAW) management, pointing to frustration over failure to end a conflict that has already cost the company more than $ 1 billion.

The UAW strike began on September 16, with the union's 48,000 members at GM seeking higher wages, greater job security, a greater share of profits and protection of health services. Credit Suisse estimated that the loss could hit around $ 1.5 billion.

As part of its revised offer, GM increased the amount it plans to invest in the United States to about $ 9 billion from the previous $ 7 billion offer, says a source familiar with the offer.

Of the new total, $ 7.7 billion would be invested directly in GM plants, with the remainder going to joint ventures including a potential battery plant near Lordstown, Ohio, which has been idling, the source said.

The GM stock rose 2.8% to $ 35.62 on Friday afternoon.

The company said the offer also includes increased compensation through pay and one-time payments, retaining industry-leading health benefits without increasing workers' costs, improved profit sharing with unlimited upside and a higher ratification bonus than the $ 8,000 previously offered.

For temps, GM said the offer would create a path to permanent employment and include a ratification bonus.

"The strike has been fierce against you, your families, our communities, the company, our suppliers and dealers," wrote GM's letter, where the latest offer increased compensation and promised a path to full-time jobs for temporary workers.

"We have informed the union that it is important that we return to producing quality cars for our customers. … Our offering is based on the winning formula we have all benefited from in recent years."

The UAW said in a statement that GM "played games at the expense of workers" and accused the automaker of "deliberately stopping the process of starving UAW-GM workers off the grid."

"GM has tried to undermine it at every step. ongoing, good faith efforts UAW has made to end this strike, "the union said.

In a later released video here, UAW's leading GM dealer, Terry Dittes, said that the union would negotiate at the table and not through the media.

"I want to assure you despite that letter, your negotiating team has been here around the clock, working to get you the contract you deserve," he said. "Let me be clear: the company's strategy of releasing half-truths does nothing to reach a final settlement."

GM responded with a statement from its communications director, Tony Cervone: "The goal of our communications has been to inform – not encourage. We will continue to provide information in a straightforward and important factual manner."

In a Thursday letter to UAW leaders urged the GM union to agree to round-the-clock negotiations, while the union insisted in its own letter to address five specific questions first before responding to the broader proposal made to union negotiators on Monday.

GM boss Mary Barra met with UAW President Gary Jones and Dittes on Wednesday to call for a faster union response to the company's latest offer.

One of the five issues the committees are discussing is the fate of four US factories that GM has suggested could close; another are future technological changes in production, according to the UAW letter. Yours said he did not know when the problems would be solved, suggesting an end similar deal may not be nearby.

UAW workers are concerned that when GM switches to more electric vehicles, it will require fewer workers and that workers in battery production plants may earn less than those at existing transmission plants.

Reuters previously reported that GM told UAW that they could build a new battery plant near the now-closed Lordstown plant and mount an electric truck at the Detroit Hamtramck plant.

Moody said in a Friday report that GM must maintain its flexibility under any new agreement to build electric and self-propelled vehicles without further increasing fixed costs. It said GM's annual costs in salaries and benefits are more than $ 1 billion higher than foreign car manufacturers operating US plants.

"It is crucial for GM that any new UAW contract does not allow an even greater difference," said Moody's.

"We expect the long-term strategic benefits of getting a UAW contract … will offset the cost of enduring a protracted strike that can last in November," added Moody's & # 39; s.

On Sunday, the UAW said the talks took a "turn for the worse," and on Tuesday the union urged GM to increase US vehicle production. Union workers are angry about the production of trucks and sports cars in Mexico.

UAW membership is largely in the Midwest, in states that can be critical of both sides in the November 2020 presidential election, so the strike has drawn the attention of Republican President Donald Trump, his rivals seeking the Democratic nomination, and US lawmakers. They have urged GM to build more cars in the US and shift work from Mexico.