About 49,000 General Motors employees walked off the job at midnight Monday after negotiations between their union and the Detroit car giant unraveled over wages, health care, job security and other issues.
“We stood up for General Motors when they needed us most,” said UAW Vice President Terry Dittes in a statement Sunday. “Now we are standing together in unity and solidarity for our Members, their families and the communities where we work and live.”
Though GM brings in significant profits — $8.1 billion after taxes last year — it is grappling with massive changes within the industry. Family-friendly sedans — once an icon of American culture — have become less of an emphasis for U.S. automakers as consumers gravitate to sport utility vehicles and crossovers, as well as greener electric vehicles. In March, GM shuttered production at one of its plants in Lordstown, Ohio, as it scaled back production of the Chevy Cruze.
Car manufacturing is crucial to the nation’s economy. According to the Alliance of Auto Manufacturers, the broader vehicle industry supports nearly 10 million jobs and has historically accounted for about 3 percent of gross domestic product. Some 220,000 people work in car manufacturing.
Yet many view GM’s job cuts in Lordstown and beyond as signs that the economy is still leaving parts of the country behind. Though 2018 was the best year for manufacturing jobs in more than two decades, many locales, particularly in Rust Belt states, have seen a steady loss of such jobs.
In a statement, GM said it offered to create more than 5,400 jobs, invest more than $7 billion in its operations, and build on profit-sharing and health care benefits.
“We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight,” the news release Sunday read. “We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business.”
GM has made major gains since its 2009 bankruptcy and President Barack Obama’s bailout, which rescued struggling American automakers beaten down by the global financial crisis. In time, car sales bounced back, employment grew and the companies began turning profits again.
GM’s average hourly employee earns about $90,000 per year before benefits, and skilled trade workers earn more,” according to the company.
But the comeback hasn’t erased concerns about slipping U.S. vehicle sales and the need for companies to manufacture the kinds of cars consumers will want. Sales of SUVs and pickups have surged past those of midsize sedans, and a new generation of SUVs with low gas mileage has made it easier for drivers to walk away from their smaller rides.
Auto manufacturers also are grappling with the effects of President Trump’s trade war with China. Beijing is imposing tariffs on automobiles and auto parts, and concerns of an economic slowdown are unnerving consumers with stinging memories of the Great Recession. Meanwhile, Trump has promised to bring back manufacturing jobs, even as many of the towns losing manufacturing jobs lie in swing states.
The strike comes as consumers are also keeping an eye on the ripple effects of drone strikes on two major oil facilities in Saudi Arabia. Analysts say the attacks will cause a 20 to 25 cent increase in gas prices, but that uptick should subside once Saudi production gets back on course. Gas prices are already low nationwide, suggesting drivers can tolerate the slight increase in the short term.
The strike was authorized Sunday in Detroit during a UAW meeting of nearly 200 regional leaders gathered from at least seven states. The group voted unanimously in favor of the plan, union spokesman Brian Rothenberg told The Washington Post.
For every auto assembler, there are several manufacturing and supply workers outside GM that could be adversely affected if the plants shut down, Rothenberg said Sunday. “But this is a sacrifice worth making. It’s not just standing up for ourselves. It’s standing up for all of us.”
If the strike commences, more than a thousand Teamsters will refuse to transport GM vehicles to dealerships in a move of solidarity with UAW, said Bret Caldwell, a spokesman for the International Brotherhood of Teamsters.
“Our members won’t cross the picket line,” Caldwell said Sunday. “They stood with us when we have fought employers. This is another way we can stand with them.”