Why Nearly 50,000 GM Auto Workers Just Went On Strike

For the first time in 12 years, General Motors has seen its workers—nearly 50,000 of them—walk off the job.

It’s a work action that could cost the company $50 million per day, according to Dan Levy, an analyst at Credit Suisse. And the company’s stock is taking a hit, falling roughly 3% by midday Monday.

Confused about what’s behind all of this and what’s being done to end the strike? We’ve got a few answers for you.

Why are GM workers on strike?

GM and the United Auto Workers are negotiating a new four-year contract and remain far apart on key issues. The key issues are wages, benefits, and job security.

How long will the GM strike last?

That’s unclear right now. Contract talks are continuing (and began again at 10 a.m. Monday).

Previous strikes have gone the distance, though. A 1970 walkout lasted 67 days. And a strike in Flint, Mich. in 1998 went on for 54 days.

Does this strike mean I won’t be able to buy a GM car?

If you’re in the market for a Cadillac, Chevrolet, Buick, GMC, or any other GM-branded vehicle, you should be fine for a while. The company saw this strike coming and built up its available supply. Cox Automotive says GM has a 77-day supply of vehicles (including cars, trucks and SUVs), well above the industry’s 61 day average. It’s a bit lower on cars alone, having a 59-day supply, though that’s still above the industry norm.

What is GM offering the UAW?

While strike negotiations are generally kept under wraps, General Motors took the unusual move Sunday of publicly announcing what it had offered the union, perhaps to show it has made good faith negotiation efforts as the public and politicians begin to take sides in the now spotlighted battle.

GM says it has offered the union over $7 billion in investments and has pledged to add another 5,400 jobs. It also says it’s offering wage increases for all four years of the deal, an $8,000 signing bonus per membe, and an improved profit sharing formula. It’s also offering “solutions” for two assembly plants that are scheduled to close.

What does the UAW want from GM?

The United Auto Workers union began a nationwide strike against General Motors on Monday, with some 46,000 members walking off the job after contract talks hit an impasse.
Jeff Kowalsky—AFP

The UAW isn’t showing its hand the way GM has. However, it’s trying to stop the closure of four plants in Michigan, Ohio, and Maryland. It wants pay raises for entry-level workers. And it has said health care is a priority for workers. The union is also likely looking for paths for temporary workers to become permanent and to close the wage gap between those workers and permanent employees.

What’s this I hear about corruption charges?

Gary Jones, president of the union, was implicated in a federal corruption probe right as the deadline for the labor contract drew near. Sources tell Bloomberg Jones is one of several people accused of taking part in a long-term conspiracy to embezzle member dues and spend them on luxury villas and merchandise.

So far, he has kept his job, but did not appear at a press conference where the strike was announced. (He was quoted in the press statement about the strike, however.)

How will this GM strike compare to the one in 2007?

The 2007 work action only lasted a couple of days and came after 20 days of unsuccessful talks. What’s notable, though, is that action saw 73,000 workers walking the picket lines. And a strike 49 years ago saw the union representing 400,000 workers. A smaller number of workers on strike has a smaller impact on the national scene.

Is GM the only automaker facing a strike?

For now, yes. GM was the first manufacturer to negotiate with the UAW. Talks with Ford and Fiat Chrysler will come later. It’s expected that the deal GM ultimately strikes will set the precedent for those automakers. But, so far, the union hasn’t said who it will begin bargaining with next.

NEXT: GM strike far from ending as stocks plunge and costs mount

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