UAW says GM talks take 'a turn for the worse'

DETROIT -- Contract negotiations between the UAW and General Motors suffered a setback after the union said the automaker essentially rejected its latest offer, providing little hope a national strike, now entering its fourth week, will end soon.

Talks were expected to continue Monday, but neither the union nor the company offered any updates as of mid-afternoon. 

Terry Dittes, vice president of the UAW-GM department, said Sunday in a letter to members that GM this morning turned down an "extensive package" that addressed all of the union's demands, from wages to profit-sharing. He said the company instead fell back on a previous offer the union already rejected.

"The company's response did nothing to advance a whole host of issues that are important to you and your families," he said.

"It did nothing to provide job security during the term of this agreement. We, in this union, could not be more disappointed with General Motors who refuse to recognize the experience and talent of our membership who make their world class products and billions of dollars in profits."

He said the two sides will continue to talk but noted that negotiations "have taken a turn for the worse."

GM said in a statement: “We continue to negotiate in good faith with very good proposals that benefit employees today and builds a stronger future for all of us. We are committed to continuing discussions around the clock to reach a resolution.”

The UAW’s Saturday offer addressed at least 35 hourly and three salaried proposals, Dittes wrote in a letter to Scott Sandefur, GM’s vice president of labor relations. Dittes said in the letter that GM did not explain why it rejected the UAW’s offer.

“We expect the Company to respond and discuss the package proposal we presented yesterday. The law and basic decency require no less,” Dittes said.

The UAW released the letter to GM later Sunday, following the note to members. 

One key issue centers on assembly of future vehicles. The UAW wants GM to make commitments on future products it would build in various plants beyond what has currently been offered, a person familiar with the talks told Reuters.

GM officials previously said the Detroit company's labor rates are the highest in the industry and that it needs the ability to build some vehicles in other markets to keep costs down.

The tone of Dittes' letter stands in contrast to a Friday update that noted the sides had made "good progress" on contentious issues such as temporary workers and health care.

The walkout has the attention of the Trump administration. Larry Kudlow, the White House economic adviser, told Fox News on Monday he’s concerned about the slowdown in U.S. manufacturing and said the GM strike is “not helping.”

The fight won’t be over once an agreement is reached, since the deal must be ratified by all members. After four years of record profits for the company, workers want a share of the spoils, said Kristin Dziczek, vice president of the labor and economics group and the Center for Automotive Research. “They will have to sell it,” she said.

If a tentative deal is signed, union workers may stay on strike until they vote to ratify the four-year deal. UAW local leaders nationwide will convene in Detroit to decide whether to remain out of work until that ratification vote is completed.
Outstanding Issues

GM and the UAW continue to debate over a boost to retirement accounts for older workers with pensions and newer hires with 401(k) plans. Another outstanding issue is pay progression for temporary workers.

It's unclear how much of a raise workers will get, Bloomberg reported, quoting people with knowledge of the situation. GM originally wanted to give workers 2 percent raises in two of the contract’s four years, interspersed with 2 percent lump sum payments in the other two years. UAW leaders want 4 percent raises in two years and 4% lump sums.

For temporary workers, negotiators have discussed a path to full-time employment after three years. The two sides debated whether a temp who was laid off could claim the accumulated time once called back, one of the people said. The union also wants more vacation time and better health care for temps.

UAW members on the picket line at GM's Detroit Hamtramck Assembly plant said they have a “strengthened resolve” following Sunday's update on negotiations hitting a snag.

John Hatline, a 35-year skilled trades training representative at the plant, said news of the rejected proposal was motivating despite financial hardship caused by the strike. 

“I think it only strengthened the resolve of everyone out here on the line,” said Hatline, 64. “We’re gonna be here until it’s over. We’re going to last one more day than General Motors does.”

Members’ goals of “a fair contract with fair wages and affordable healthcare,” Hatline said, must be met in order for the strike to end.

“They better get it settled because the UAW is going to win this," he said.

UAW members have received grocery donations from fellow local UAW offices, but some are suffering financially because of the strike.

“We’ve gone three weeks without a paycheck,” Hatline said “A lot of our members are worried about putting groceries on the table for their families. A lot are probably even thinking about finding part-time work. It depends on the amount of money they have been able to save.”

Scott Ferguson, 65, a paint repair employee at the plant for 46 years, said he has co-workers struggling to meet car and mortgage payments. 

“I’m doing okay,” Ferguson said. “I’ve been saving for a long time, but I had to take money out of savings the other day to pay some bills. At my age I’m mostly fighting for the younger workers. There were guys before me who did the same thing for me.”

The strike, Ferguson said, is "a good hard lesson,” for younger UAW members to “understand the importance of the union.”

“People in my age group know the fight,” he said. “Younger people are starting to see the fight other people had to do before us. This strike is probably going to be longer than any of the ones I have encountered. I think GM wants to play hardball now. But we’re ready. Bring it on.”
 

Bloomberg and Reuters contributed to this report.