GM sends a bold message to the UAW
Nearly a decade after its federally backed bankruptcy and bailout, General Motors this week once again became a political football by announcing the potential closure of up to four U.S. plants, and another in Canada, that could impact thousands of American workers.
GM didn't need to make the announcement at this time. It could have waited to negotiate the fate of the U.S. plants during collective bargaining next year with the UAW, which it must contractually do anyway to close a plant.
So why now? Why give President Donald Trump and others ammunition to criticize the automaker?
Aside from cost cutting and addressing underutilized plants, GM is sending a message to the UAW and its rank-and-file members ahead of collective bargaining in 2019.
While the negotiations don't officially kick off until next year, both sides have assembled their bargaining teams, and members are discussing what to focus on during the talks. As always, many UAW members want more: more raises, more profit-sharing, more everything.
With Monday's move to end output at the plants next year, by not giving the facilities any new products, GM is attempting to manage UAW members' expectations.
GM is changing the narrative from members wanting more to potentially just wanting to save jobs and plants.
It's a bold move with many consequences and risks, which GM has already calculated.
The announcement could actually be a blessing in disguise for UAW leaders, who are fighting an internal battle with members following a federal corruption scandal.
"These are real stakes in front of the bargaining team next year for the negotiations," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research. "It might actually help the membership focus on jobs and survival more than getting more, more and more in terms of raises, benefits and bonuses."
But if any of the plants are saved, union members should read the fine print in the contract. Expect GM to demand untraditional employment practices such as an increase in temporary, subcontracted or outsourced workers.
The UAW already opened the door for the practice at Orion Assembly in suburban Detroit with an Autonomous Vehicle Memorandum of Understanding that allows the automaker to offer reduced wages and benefits for some jobs.
The reality is GM has too many plants, legacy costs that remain unacceptable, and it doesn't see crunching metal as a long-term opportunity for growth and profits. The company likely wants to close the plants but could be persuaded to change its mind under the right circumstances.
Collective bargaining between the UAW and Detroit automakers is a theatrical chess match. GM just raised the curtain with a bold move that sets the stage for the next year of negotiations.