STRIKING A DEAL
July 28, 1998
A tentative agreement was announced today between the striking United Auto Workers union and General Motors. The seven week strike, which virtually shutdown GM's production, cost the automaker more than two billion dollars. Elizabeth Farnsworth and guest discuss the terms of the settlement.
ELIZABETH FARNSWORTH: The settlement must still be ratified by the workers who went out on strike. For more we go now to Don Gonyea, who's in Flint, Michigan, covering the story for National Public Radio. Don, what's the mood there, first among the workers?
A RealAudio version of this segment is available.
July 14, 1998:
General Motors files suit in hopes of ending the 40 day old strike.
June 26, 1998:
GM workers continue to strike.
June 19, 1998:
A discussion on the GM strike.
March 12, 1996:
The United Auto Workers strike in Dayton, Ohio.
Browse the NewsHour's coverage of business.
United Auto Workers
The mood among the workers.
DON GONYEA, National Public Radio: Well, the workers are weary, as you can imagine. They've been out almost two months, some of them, but it really has become a party out on the picket line. There's music blaring and cars honking and workers dancing, and they are very, very, very happy to get word of this tentative settlement this evening-this afternoon.
ELIZABETH FARNSWORTH: And the reaction among the company reps.
DON GONYEA: Well, the company's vice president for personnel, Gerald Knechtel, came out, and he called it a good agreement. He said it is an agreement that addresses the basic things General Motors was always seeking, that is, an opportunity to improve the productivity of these plants. General Motors is really concerned about cost cutting. They lag behind Chrysler and Ford and the Japanese in terms of their plant productivity, and they saw Flint as the place to make some gains. That's what this strike was all about for them, and they say that they got some gains. Ultimately, though, the company negotiator said the measure of this contract-just how good of a contract it is for the company-just how worth it was losing the $2.2 billion or so that they lost-will take a long time to determine. I mean, time will tell, is essentially what he said to that point.
ELIZABETH FARNSWORTH: Okay. Before we go through some of the points, I want to get one thing clear. This is a strike at two local plants, and we heard in our excerpt-we heard the UAW representative say that though they were local issues, they had national implications, but explain that a little bit. Why is this so important for the UAW and GM nationally?
The national implications of local issues.
DON GONYEA: The local issues they were out over include things like health and safety, production standards, which covers how equipment at any given plant is run, speed of the assembly line, things like that, and those are the only things that you can strike over, according to the contract at a given local plant anyway. But the union, overall, has been fighting to hang onto as many jobs as it can in a town like Flint. They have really been concerned about that, because this town last lost 40,000 auto jobs over the past couple of decades. General Motors, meanwhile, again, saw this as an opportunity to address those national concerns that the company has, that being the poor performance of its plant when they are stacked up against the plants of the other major domestic and foreign auto makers in terms of productivity. So even though they technically were over those local issues, you couldn't discuss the local issues without these other bigger things intruding on the bargaining table and really ultimately I think being much of a focus of the settlement.
ELIZABETH FARNSWORTH: All right. Let's start with the Flint metal center stamping plant where the strike began. What kind of a settlement was arrived at for the issues there?
DON GONYEA: The Flint metal center was the area where the company was really worried about something called pegged rates, where workers on certain jobs could work faster than they're expected to work and could knock off an hour or two or two and a half hours early and still get paid a full eight hours-eight hours pay. The company wanted to re-negotiate some of those rules so workers would just continue to work the whole day and get paid for the whole day, and then if they went into overtime beyond that, they get paid overtime. They have apparently re-negotiated some of those pegged rates to increase the amount of production they'll get out of those plants. What the union got, though, is a promise that the company will make good on a promise it made years ago to invest $180 million into the plant to buy new equipment and modernize it, which the union says will improve productivity. But, overall, both sides say that this settlement will help that Flint metal stamping plant improve its productivity significantly.
ELIZABETH FARNSWORTH: And what did both sides get at the Delphi Flint East plant, which went out on strike after the first one?
DON GONYEA: You know, the Delphi plants-especially those that aren't seen as particularly effective or profitable for General Motors-are all in danger of being closed or sold off or their work being shifted elsewhere, perhaps to an outside non-union facility. You hear a lot of workers at the Delphi plant on the picket line talking about how they're worried about their jobs going to Mexico or Brazil or somewhere like that. What the company did at Delphi East is agree not to sell any of the product lines, not to close the plant, not to sell the plant to anyone else, until at least the end of next year. After that, it's an open question. We don't know what will happen, but that was a significant thing for the workers at that particular plant. We're not sure what the union gave up for that. The UAW's top negotiator today-Dick Shoemaker-said when asked about-you know, after that 14 months-he said, hey, we'd like to get a deal to keep every one of these plants open forever, but we realize that that's not something that's realistic. So right now they are going to take that 14 months at this particular plant.
ELIZABETH FARNSWORTH: And, Don, there were agreements for three other plants too, right?
DON GONYEA: Right. There were talks underway at plants that were not striking-two brake plants in Dayton, Ohio, a metal stamping plant, another stamping plant in Indianapolis, and then there's another plant here in Flint called the Buick City Complex where talks were underway. And part of what-what the union says slowed down the pace of talks here, and made the strike drag on-these strikes drag on as long as they did-is because the company insisted they get agreements that all of these plants-at the other non-striking locations-to head off possible strikes there. The company's concern, of course, was that they would go through grueling talks here, settle with the workers in Flint, and then a month or two or six months down the road they'd get hit by another crippling strike in someplace like Dayton. So we did get settlements today at Buick City and at Indianapolis. Dayton we did not get a settlement, but we got something that was just as good for the company, and that was a promise from the union that there would be no strike there. There's a "no strike" clause, and they're going to continue negotiating, you know, until they do get an agreement, but, again, no strike in Dayton, that was enough for the company to sign off on the whole agreement today.
ELIZABETH FARNSWORTH: Do you get the sense that fundamental issues were resolved here, or that they were just put off a couple of years?
A prelude to future troubles?
DON GONYEA: You know less than a couple of years maybe because next year the UAW and GM open national talks, the national contract expires next September, so next June they'll be back at this again. I don't know if any of them are quite ready to think about this, but this really was kind of the prelude to what we're going to see there-and all of these issues are going to be on the table. Now, that said, there was something else very significant said today that could-could help address these issues long-term. Both the union and the company acknowledge that it really is a shame that their relations are so-so poor these days that it always seems to come to a strike, and a brutal, bloody battle, and then they both have to kind of some middle ground after all of the economic pain and the loss and the pain on each side. So they have agreed to set up some sort of a frame work with special committees that will meet regularly in hopes of heading off some of these disputes before they really reach their crisis level that we saw here in Flint.
ELIZABETH FARNSWORTH: Well, Don Gonyea, thanks very much.
DON GONYEA: My pleasure.