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Why GM cannot use record profits to provide striking workers' demands

Conversations between General Motors and striking United Auto Workers went on to the "Main Table" phase this week, but union members may be disappointed with wage offers since they are already among the top compensated workers in the auto industry.

Non-unionized workers in the United States cost foreign car companies $ 13 less per hour, which benefits more than GM's employees, according to the Center for Automotive Research. GM's hourly labor costs ring up to $ 63 per worker, compared to $ 61 for Ford and $ 55 for Fiat Chrysler.

"Car manufacturers will seek to improve their competitive position vis-à-vis international car manufacturers in the United States during these negotiations," according to a report from the research center just before the UAW strike began on September 1[ads1]5.

President Trump's trade war with China, as well as disruption to self-driving and electric cars, could also prevent GM from using record profits to grant all items on the UAW's wish list, according to The Detroit News.

In conversations so far, conditions for temps have been a sticking point for the UAW. Temporary workers are union members who do the same work as regular employees, but earn half of their wages and far fewer benefits.


The union wants these workers to find a way to permanent positions and compensation closer to their permanent colleagues.

GM counters like hiring temporary workers are good for permanent employees because they allow full-time employees to take time off. Hiring temporary workers also gives the company the flexibility to scale up production for new models and handle absenteeism.

Many striking workers say they are not paying GM CEO Mary Barra's hefty compensation, but the company's base salary has remained flat since 2010 when adjusted for inflation, while some GM employees' base salary has fallen 10 percent, according to Detroit News .


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