Autoworkers’ Union Goes on Strike Against G.M.
With the two sides far apart, U.A.W. regional leaders in Detroit voted unanimously on Sunday morning to authorize the strike, the union’s first such walkout since 2007. It began at midnight, after the union’s current bargaining agreement expired on Saturday.
“Today, we stand strong and say with one voice, we are standing up for our members and for the fundamental rights of working-class people in this nation,” Terry Dittes, a union vice president, said after the meeting.
The U.A.W. is pushing G.M. to improve wages, reopen idled plants, add jobs at others and close or narrow the difference between pay rates for new hires and veteran workers. G.M. wants employees to pay a greater portion of their health care costs, and to increase work force productivity and flexibility in factories.
Although the company has been earning substantial profits in North America — and it made $8.1 billion globally last year — it has idled three plants in the United States as car sales slide and overall demand for vehicles weakens.
The strike is unfolding as President Trump’s trade war with China wears on manufacturers and has stirred fears of a slowdown.
It could disrupt local economies in factory towns in several swing states like Michigan and Ohio, where President Trump has promised to increase manufacturing jobs. But any impact on the broader economy will depend on how long it lasts.
The auto industry, even if it is far from its employment heights in the 1970s, remains crucial to the economy, counting some 220,000 people who work to manufacture cars. According to the Alliance of Auto Manufacturers, the broader vehicle industry supports 9.9 million jobs and historically accounts for about 3 percent of gross domestic product.
Even as the unionized share of the nation’s work force continues to fall, down from a peak of one-third in the 1950s, labor has become more assertive in recent years.
The number of people who participated in work stoppages involving over 1,000 workers rose last year to its highest level since the 1980s, buoyed by teacher walkouts and a multicity hotel workers strike.
Polling data shows that the public has become increasingly supportive of organized labor. A Gallup poll in late August found that 64 percent of Americans approve of unions, up from below 50 percent a decade ago.
Even so, some have been critical of the labor movement’s ability to capitalize on these trends, and of the U.A.W.’s failures in particular. In June, the union narrowly lost a vote to organize a Volkswagen plant in Tennessee.
And the talks between G.M. and the union have been shadowed by a federal corruption inquiry that has been looking into U.A.W. officials and at least two Fiat Chrysler company executives. The investigation has detailed the use of union funds for lavish travel and personal spending by senior U.A.W. officials, including the president, Gary Jones.
In a statement, G.M. said it had offered to make more than $7 billion in new investments in plants in the United States, add 5,400 jobs and increase pay and benefits.
“We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways, and it is disappointing that the U.A.W. leadership has chosen to strike at midnight tonight,” the company said on Sunday. “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.”
It is a challenging time for the industry over all, with auto sales slowing in the United States, China and other major markets, and new technologies such as electric cars and self-driving vehicles requiring billions of dollars in investments.
“Carmakers’ profits today distract from two challenges,” said Erik Gordon, a University of Michigan business professor who follows the auto industry. “The makers will be going into a down cycle of demand in their two most important markets and they will have to make the biggest technology investments in their history to change to electric propulsion.”
One of the union’s aims is getting G.M. to reopen an idled car factory in Lordstown, Ohio, a goal that President Trump has endorsed. The plant had made the Chevrolet Cruze, a compact car whose sales plunged nearly 40 percent between 2015, when the previous labor contract was signed, and 2018. The factory ceased production in March.
A person with knowledge of the talks said G.M. was reluctant to reopen the Lordstown plant, but it was willing to discuss building a new battery factory in that area of Ohio as it shifts to electric vehicles.
G.M. has also expressed willingness to keep open a car plant in Detroit that had been targeted for closure, this person said.
The strike will immediately halt production in the United States, and a prolonged stoppage could affect G.M.’s Canadian and Mexican operations, crimping its bottom line and the fortunes of thousands of its parts suppliers.
G.M. operates 12 vehicle assembly factories in the United States and 22 parts plants. Workers at 12 parts distribution centers and two engineering locations are also represented by the U.A.W. Just under half of G.M.’s unionized locations are in Michigan. The rest are in six other states: Ohio, Indiana, Missouri, Tennessee, Kentucky and New York.
The company has enough inventory on dealer lots to last 77 days at the current rate of sales, according to Cox Automotive.
A long shutdown could prove painful for union members, who would have to get by on strike pay of $250 a week while out of work. Any hit to G.M.’s North American profits would also lower the annual profit-sharing checks union members receive each March. Those checks have averaged $11,000 over the last three years.
“Workers will feel it immediately because if they move to strike pay, that’s miserable,” said Kristin Dziczek, vice president for industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich.
The union may also be wary of depleting its strike fund. It is delaying talks with Ford and Fiat Chrysler while focusing on G.M., a standard practice in the every-four-year talks between the U.A.W. and the Detroit automakers.
The auto industry has been transformed over the last 30 years as foreign automakers have built their own nonunion factories in the United States employing tens of thousands, and taken market share from Detroit’s Big Three.
The U.A.W. did not resort to nationwide strikes against G.M. when it negotiated contracts in 2011 and 2015. Its members — it had 73,000 at G.M. at the time — walked out of General Motors plants for three days in 2007 before a deal was reached, as a recession loomed. The company lost $23 million in 2007.
G.M. has bounced back after its 2009 bankruptcy and government bailout and now employs 49,000 full-time and temporary U.A.W. members. G.M. has a smaller U.A.W. work force than its Detroit rivals because larger portions of the vehicles it makes in North America are assembled in Mexico and Canada.
While the prospect of a strike has temporarily taken the spotlight off the union’s legal troubles, the scandal has made members suspicious of the U.A.W. leadership, said Paul Wohlfarth, a retired U.A.W. member from Toledo who is still active in the union.
“It seemed like a few bad apples at first, but it’s not,” he said. “It’s a whole bushel.”
Since 2017, nine people have been charged in connection with a variety of schemes in which union money was allegedly used for extravagant personal spending. In one case, Fiat Chrysler’s top labor executive bought a Ferrari sports car and renovated his home using funds earmarked for a training center run by the union and the automaker.
Late last month, federal agents raided Mr. Jones’s home in Canton, Mich.; a Hazelwood, Mo., regional office that Mr. Jones previously headed; the union’s Black Lake retreat in Onaway, Mich.; and the Corona, Calif., home of Mr. Jones’s predecessor, Dennis Williams.
On Thursday, Vance Pearson, a senior union official who worked closely with Mr. Jones, was charged with embezzlement, money laundering, wire fraud, conspiracy and other offenses. The prosecutor’s complaint said Mr. Pearson and other senior U.A.W. officials spent union funds on luxury villas in Palm Springs, Calif., golf clubs, clothing, expensive champagne, liquors and cigars.
Mr. Pearson took part in union meetings and the strike vote on Sunday, a union spokesman confirmed.
Noam Scheiber contributed reporting.