“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,” GM said in a statement 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.”
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Talks between the union and GM were tense from the start, largely because GM plans to close four U.S. factories, including the one on the Detroit border with the enclave of Hamtramck, and Lordstown, Ohio.
“UAW helped rebuild General Motors when they were near extinction, now they’ve reached record level profits,” the union said in a statement.
What GM is offering:
Here are the main areas of disagreement:
GM is making big money, $8 billion last year alone, and workers want a bigger slice. The union wants annual pay raises to guard against an economic downturn, but the company wants to pay lump sums tied to earnings. Automakers don’t want higher fixed costs.
The union also wants new products for the four factories slated to close. GM currently has too much U.S. factory capacity, especially to build slower-selling cars.
The companies want to close the labor cost gap with workers at plants run by foreign automakers. GM pays $63 per hour in wages and benefits compared with $50 at the foreign-owned factories. GM’s gap is the largest at $13 per hour, according to figures from the Center for Automotive Research.
Union members have great health insurance plans and workers pay about 4 percent of the cost. Employees at large firms nationwide pay about 34 percent, according to the Kaiser Family Foundation. Automakers would like to cut costs.