Workers At GM Walk Off The Job
Union Strikes to Keep Work in United States

By Sholnn Freeman and Frank Ahrens
Washington Post Staff Writers
Tuesday, September 25, 2007

DETROIT, Sept. 24 -- The autoworkers union called its first national strike in more than three decades against General Motors on Monday, sending thousands of workers streaming from plants across the country even as both sides prepared to resume negotiations on a new contract.

The strike came on the 10th day of talks between the United Auto Workers union and GM as the two sides attempt to negotiate a new three-year deal. A prolonged strike could cripple an already troubled automaker, which earlier this year lost its 76-year reign as the world's largest carmaker to Toyota.

GM and the UAW are haggling over wages, job security for U.S. workers worried about jobs moving overseas, and the company's continued investment in new products and job creation. Another substantial item, transferring the management of $50 billion in retiree health-care benefits from GM to the union, is not a sticking point, the union said.

"The No. 1 issue here is job security," UAW President Ron Gettelfinger said at a news conference Monday. "This strike is in no way about" the retirees' health-care benefits.

GM spokeswoman Michelle Bunker said: "We are disappointed in the UAW's decision to call a national strike. The bargaining involves complex, difficult issues that affect the job security of our U.S. workforce and the long-term viability of the company."

Despite the mass walkout, some experts did not expect the strike to drag on.

"My own opinion is the strike will be a short one, but time will tell," said David B. Healy, an auto industry analyst with Burnham Securities. "I think it's a little bit of heat just to get GM off the dime. But it lets the workers let off steam and it lets him [Gettelfinger] prove that he hasn't given away the store."

Some of GM's 73,000 union workers disagreed.

"It could be a long strike," said Mark Schindler, a member of Local 659 in Flint, Mich. The UAW's GM workers are seasoned strikers, with a 1998 walkout to its credit that temporarily shut down the automaker. "We've got the most prior experience against management," Schindler said. The strike in 1998 was limited to two plants in Flint and cost GM billions of dollars in income and halted production for 53 days.

GM and the UAW appear to be far apart on job guarantees. The union wants GM to commit to maintaining current production levels in the United States. With the company moving more of its work overseas, the union wants assurances that GM would introduce new products at U.S. plants even if it phases out vehicles being built at them now.

Gettelfinger said yesterday that GM would not budge on the issue.

Gary Chaison, a labor professor at Clark University, said the UAW fears becoming weaker if it allows Detroit automakers to keep moving production overseas.

"You get a company reducing its U.S. workforce while making huge investments all over the rest of the world to the point where they can take a strike or go into bankruptcy," Chaison said. "The UAW has every reason to be worried, to draw a line in the sand about keeping jobs in the U.S."

A North American shutdown costs GM about $350 million in profit each week, analyst Healy said. The figure does not include what the industry calls "production recovery," or the time and money required to restart assembly lines.

GM has 67 days of inventory, meaning it has a two-month supply of new vehicles for its dealerships, Healy said. Vehicle shortages on showroom floors would not occur until October.

GM stock closed Monday at $34.74, down 20 cents. Traders were betting that the two sides would quickly reach a new contract that would remove retiree health-care benefits from GM's responsibility, improving the company's financial health.

The strike marked the first national autoworker walkout since 1976 and comes at a critical time for a U.S. auto industry facing surging competition from foreign automakers.

Neither the union nor GM has the clout it once did. The UAW, which had more than 1.5 million members at its peak in the 1970s, now has fewer than 600,000 members, the union reported. GM, which controlled half of the U.S. vehicle market in the 1960s, now makes fewer than 25 percent of the cars and trucks sold domestically.

The union last called a national strike against GM in 1970; it lasted for two months.

"This is nothing that we wanted. Nobody wins in a strike," Gettelfinger said at Solidarity Hall, the UAW's Detroit headquarters Monday. "But there comes a time when you have to draw a line in the sand."

UAW members began leaving work and raising picket signs around General Motors plants across the country shortly before noon, as talks with the company failed to produce a new labor contract by an 11 a.m. deadline.

Outside of GM's Cadillac plant in the Detroit suburb of Hamtramck, strikers formed five picket lines and prepared to march around the clock. At the UAW Local 22 union hall on Detroit's west side, workers received their picket assignments.

"We worked a lot of long and hard years to get where we are," GM retiree John W. Taylor, 62, said at Local 22. "We can't just hand everything back on the platter."

A prolonged strike could have devastating effects on an already economically troubled Michigan.

"Michigan has been in recession for nearly four years already, and that was in the context of national growth and no labor stoppages" said Dana Johnson, chief economist of Comerica Bank in Detroit. "It would intensify the local, one-state recession we've already been in. That's the last thing you would want to happen if you live in Michigan."

An extended work stoppage would move the state's unemployment rate, now at 7.2 percent, toward 8 percent, Johnson said. The national unemployment rate is 4.6 percent.

However, a broader ripple effect into the national economy is unlikely, he said. "There are plenty of other car companies," Johnson said.

The Detroit automakers are scrambling to find ways to reduce overhead costs. With the labor contract, the companies are trying to work out a compensation deal to bring U.S. labor costs more in line with those of their Japanese competitors, which do not have to pay retirees' medical costs.

Negotiators from both sides have been locked in day-and-night bargaining sessions over the past two weeks.

If a contract is reached, a majority of the union's rank-and-file must ratify it before it can be adopted.

Ahrens reported from Washington. Staff writers David Cho, Neil Irwin and Catherine Rampell contributed to this report from Washington. Special correspondent Vickie Elmer contributed from Michigan.