Pressure Mounts on GM to End Strike
The CEO and union President sat down to negotiate as creditors warn the company could go to junk bond status if strike continues
The UAW Strike at GM is on its 24th day and both sides are feeling the heat to reach a deal. In an important move towards an end of the strike, GM CEO Mary Barra called UAW President Gary Jones and Vice President Terry Dittes to set up a face to face sit down meeting. The meeting, which took place on Wednesday, was the first face to face sit down by the two leaders.
With negotiations stalled, the UAW has been paying strike benefits of $250 a week to its members. This is significantly less than the $1,200 a week that some members make. However, the members are staying strong, refusing to cross the picket line and are committed to seeing the strike through.
“I’m thankful during this time that I can depend on my UAW brothers and sisters,” said Teddy Maldonado a member from Buffalo, NY. “When GM cut our health care coverage, the UAW stepped up to provide medical assistance. That’s what it means to have our back. If you know a UAW worker or their family, it’s time to support one another. Whether they are your neighbor, your friend or your family member, now is the time to stand together and support them as they fight for their fair share.”
From the company’s side, the pressure to agree to a fair contract is mounting. The company has had to idle factories in Mexico and Canada and their stock has fallen 11% since the strike started. They are also facing pressure from shareholders and credit agencies. Union-friendly pension funds like The North America's Building Trades Union, The California State Teachers' Retirement System, and the New York State Common Retirement Fund recently sent Barra a letter expressing concern over the strike. Sources have also said that credit agencies have warned GM that if the strike continues, the company would be downgraded to junk bond status. While this threat couldn’t be independently confirmed, Moody’s did say that if the strike lasted more than two weeks the chance of it doing material damage to GM's finances would increase. The strike is now entering its fourth week.
Even in the face of pressure from Barra, UAW is holding firm on its demands. In a statement released this week, the union said:
“The lack of commitment by GM to our UAW-GM locations has weighed heavily on all of us trying to get the best contract for you and your families. We have openly told GM that we do not see a solid commitment to this talented and skilled workforce that has made them billions of dollars in profits. We have made it clear that there is no job security for us when GM products are made in other countries for the purpose of selling them here in the U.S.A. We believe that the vehicles GM sells here should be built here. We don’t understand GM’s opposition to this proposition. We are willing to discuss other ways to ensure real job security during the term of this Agreement, but building more world-class vehicles at our UAW-GM locations is the best solution for our Members, our families, our communities and GM.”
With production shut down, dealers running out of supplies, and credit agencies breathing down GM neck, union members are hoping that Barra’s meeting with the UAW leadership is a sign that she is ready to break and offer a good deal to the union. After nearly a month on strike, they definitely deserve it.