NEW YORK -- New York State Comptroller Thomas DiNapoli weighed in this week on the ongoing labor dispute between the UAW and General Motors.
Crain's New York Business, an affiliate of Automotive News, obtained an Oct. 1 letter DiNapoli sent to GM CEO Mary Barra voicing concerns about the strike, which began 18 days ago, and how it might impact the New York pension fund's 3.8 million GM shares. Both the company and the union have signaled significant advancements in the ongoing negotiations over a new contract, in which GM has offered raises and payouts to its employees in exchange for the ability to employ workers on a "temporary" basis for years at a time.
At no point in his letter does DiNapoli threaten to divest the retirement system from GM.
"As an investor, I am concerned about reports estimating the Company's lost earnings between $50 and $100 million per day during the strike," he wrote, noting that a two-month-long labor battle in 1998 cost the company $2 billion. "It is conceivable this strike could similarly cause significant losses unless a resolution is quickly reached."
DiNapoli, whose past campaigns have received the UAW's support, also noted that the union counts a number of New Yorkers among its members and that the strike has idled facilities in portions of the state. He urged the company to consider maintaining and enlarging its operations on U.S. soil.
"I believe the effective management of human capital is critical to the success of GM and its ability to create long-term shareholder value," the letter said.
GM has offered to open new electric vehicle plants in Michigan and Ohio as part of a resolution to the strike. The company's response to DiNapoli did not directly address any of the concerns he raised.
"We are working hard to reach an agreement that builds a stronger future for our employees and our business," GM spokesman Daniel Flores said in a statement.
Read the letter in full below:
Dear Ms. Barra;
I write as Trustee of the New York State Common Retirement Fund (Fund), the third largest public pension fund in the United States, which holds and invests the assets of the New York State and Local Retirement System on behalf of its 1.1 million members, retirees and beneficiaries. The Fund is a long-time investor in General Motors Company (GM or the Company) and as of June 30, 2019 held more than 3.8 million shares of the Company's stock.
Specifically, I am writing to express my concern regarding the current labor dispute betwee GM and the United Auto Workers which has resulted in approximately 46,000 employees striking at more than thirty Company factories in several different states, including New York State. As an investor, I am concerned about reports estimating the Company's lost earnings between $50 and $100 million per day during the strike. The last prolonged strike at GM, lasting 54 days in 1998, reportedly cost the Company $2 billion and two percent of market share. Even though recent reports indicate the Company and the UAW are making progress in their negotiations, it is conceivable this strike could similarly cause significant losses unless a resolution is quickly reached.
I believe the effective management of human capital is critical to the success of GM and its ability to create long-term shareholder value. Fair wages and benefits for workers and a more U.S.-based work force are important matters to consider in fostering positive labor relations. Some news reports suggest that a tentative negotiation may be near and I urge GM to continue working diligently towards an expeditious resolution of this dispute on terms that are equitable to both labor and management. Such an agreement will allow the company to continue building its successes in partnership with its employees.
Thank you for your attention to this matter.
Thomas P. DiNapoli