
G.M. Strike: 50k Union Workers Walk Out Over Wages and Idled Plants - jbegley
https://www.nytimes.com/2019/09/15/business/autoworkers-union-general-motors.html
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InTheArena
Unfortunately, what people need to judge this is information about where the
negotiations are really at, and what the issues are, and what the differences
are - not just PR releases from GM and UAW. Both institutions have proven
corrupt over and over during the last fifty years, and it's hard to take
either at face value.

There is also a consistent pattern. Companies do great, leading to expansive
contracts with workers, then are mismanaged, or not sustainable during down-
cycles. Then a down-cycle happens, and the company declares bankruptcy (which
more often then not involves a government, a hard core negotiation or a bank
bailing them out), and moving to a starvation contract, which they keep in
place to far to long, then they get a expansive contract, and the whole thing
continues.

Alternatively, Unions don't agree to the starvation contract, which then
destroys the company - see Eastern Airlines, Pan Am, and all the carriers that
didn't survive deregulation in the 1980s.

~~~
JumpCrisscross
Profit sharing and equity grants align employees and shareholders in cyclical
industries. I never understood why base pay + shareholder-aligned compensation
never shows in these negotiations.

Yes, the lavish packages and guarantees are better in the short run, but they
_will_ need to be re-negotiated in the next downturn.

~~~
froindt
I agree they align incentives, but there's a large degree of
cynicism/skepticism and lack of understanding of how profit sharing is
calculated among the workforce. I've worked places where the message that
makes it to the represented employees is a far cry from what was presented in
the union negotiations. E.g. The end employee thinks they're losing their
pension when in reality, they're not, new employees wouldn't be getting a
pension.

I talked with a guy who worked 42 years for the same company and was on the
bargaining committee when a work stoppage occurred. He said they always
thought the company kept two sets of books - the ones they showed the union
and the actual books. Nevermind that he worked for a F500 company which was
publicly traded _at least_ half the time he worked there, and he worked for
the largest facility in the company, driving much of the revenue for the
company.

You also hear things about "the company going after tax write-off so they
don't have to pay workers as much" when that write-off they're mad about is a
standard cost of doing business deduction in the same way payroll is...the
company is making a donation to a community organization or buying supplies,
but they'd reduce their tax bill by just as much if they paid the money out to
employees in the form of profit sharing, bonuses, or higher wages.

~~~
ryacko
He is alleging that his own company is run like Enron? It isn’t impossible.

Non-profits are a way to buy political influence while getting a tax write-
off.

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frozen11b
In 2008 GM nearly went under. Part of what saved them was the union working
quite a bit of reduced compensation mostly for less senior employees. Now that
GM is very healthy and profitable the union workers want thier share. Sees
reasonable to me.

~~~
_edo
The workers never take a share of the losses.

In 2005 when the company lost $10 billion or in 2007 when they lost $38
billion the union workers didn't get bills in the mail instead of checks. On a
personal level, the workers are still making profit regardless of whether or
not the company is as well.

In 2008 GM was a $100 billion in debt. The union workers didn't pay that, they
didn't take responsibility for that, the taxpayers did.

~~~
mikestew
By this logic, management doesn't share in the losses, either. But they are
for damned sure collecting bonuses when times are good. Sounds to me like the
union wants a piece of that same "times are good" action.

~~~
refurb
I assume management gets both annual bonus and equity as a part of their
compensation, so I would argue that yes, management is sharing in the loss, in
particular with the equity.

~~~
mikestew
IOW, management made less profit. They did not share in the loss. From parent:

 _when they lost $38 billion the union workers didn 't get bills in the mail
instead of checks._

If management got bills in the mail, they shared in the loss. AFAIK, they did
not.

~~~
_edo
Yeah. Management work for the owners just like everybody else. They're workers
who happen to not be represented by the union.

Management only takes losses so far as they have equity stakes in the company,
which is to say the extent to which they _are_ owners. When GM lost $38
billion in a year the people who _own_ the company took that hit.

That's why employees usually don't value ownership in a company, because it
cuts both ways. A salary only deposits into your account.

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rmason
This is not a great time for the UAW to be staging any kind of strike. Why?
Because a bunch of UAW top officials from the president on down are facing
federal charges for embezzling from their workers.

[https://www.reuters.com/article/us-autos-corruption-labor-
fa...](https://www.reuters.com/article/us-autos-corruption-labor-
factbox/factbox-highlights-from-criminal-complaint-in-widening-uaw-corruption-
probe-idUSKCN1VX2XD)

The UAW shouldn't be striking when under under indictment as they are weak.
It's also at a time when auto sales are weakening.

~~~
rpiguy
This is a great time to strike if you want to distract people from the fact
that your top officials and president are under investigation :-)

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paco3346
Most of their demands seem reasonable but I don't understand their request
that plants be reopened.

If there aren't customers to buy the products why would the UAW demand that GM
keep making cars at those plants?

~~~
learc83
I think their solution would be to reduce the number of cars made in foreign
plants and move that work to the US.

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neogodless
> 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.

Can someone help me understand this? I mean, I guess I have to think about
this as "factory workers are doing algorithmic tasks" so there's less benefit
to being a veteran worker than there would be as a "knowledge worker?"

I don't want that to sound demeaning - it just seems odd to me that you'd be
in a union to improve things for workers, but you wouldn't want the most
senior people to be making solid money in comparison to new employees.
Wouldn't you then lose some of the motivation for those experienced workers to
stick around?

~~~
phjesusthatguy3
My union shop has two pay schedules. It's a grid of classification x
seniority. If you're level 1, you make $8/hr. If you're level 6, you make
$24/hr. There are yearly pay increases until you hit the end of the grid, then
it's just COL increases.

There's a cutoff date where everyone before is on one schedule, and everyone
after is on a different, lower-paying one. It's a concession the union made
when the employer was less profitable that it had been. It's always been a
dealbreaker that the two-tier system goes away, even though they could afford
it.

Of course, management is doing their damnedest to make sure they don't hire
anyone who could possibly join the union.

~~~
maxk42
How do you prevent someone from joining a union?

~~~
phjesusthatguy3
non-full-time employees. Or being in a state with a Right To Work law.

Which is actually worse, because non-union employees are required to be
~represented by the union without paying for that representation~ treated as
though they are represented by the union when in fact they are not. So the
employee reaps the reward of the union without contributing.

dammit I want to strikeout something and I can't find the correct markup for
HN. I know I've done it before.

------
dreamcompiler
I was kind of looking forward to the new C8 Corvette because it's only one of
two interesting cars GM has produced recently (the other being the Bolt). But
of course those people are on strike too.

[https://www.bgdailynews.com/news/local-uaw-strike-puts-
corve...](https://www.bgdailynews.com/news/local-uaw-strike-puts-corvette-
production-in-doubt/article_f05e2f10-0625-56f0-9345-1f3850025483.html)

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specialist
I've heard, but have not confirmed, that GM now makes and sells more cars in
China than the USA.

"The Truth About GM’s Huge Layoffs and Why You Should Be Mad About It"

Scott Kilmer 2018/12/06

[https://www.youtube.com/watch?v=FEyppHyeSWQ](https://www.youtube.com/watch?v=FEyppHyeSWQ)

Even if this is only partially true, I don't think labor (striking UAW
workers) are going to win this round.

~~~
rpiguy
GMs profit comes almost completely from large SUVs and Pickup trucks, which
gives the union a lot of power.

Essentially, they are selling pickup trucks and Escalades to Americans with
fantastic margins to prop-up their car business (which is unprofitable in the
US and only occasionally profitable elsewhere) and to fuel global expansion.

Basically if the UAW stops making pickup trucks and Escalades, GMs cashflow
will turn ugly fast. Doesn't matter where the growth is.

------
spodek
Success for labor will truly come when they can do what management did:
globalize.

If labor is cheaper elsewhere, can they get them to strike together? Are they
trying to connect with them?

~~~
claudeganon
I think you’re subtracting quite a bit of historical context from your
equation. The United States military and intelligence services through their
weight behind making this globalization happen, policing trade routes and
deposing economically unfriendly regimes. I don’t see them doing the same for
labor any time in the near future...

