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What’s at stake for GM and other automakers with UAW strike

Nearly 50,000 workers at General Motors plants across the country went on strike at midnight Sunday, bringing production to an immediate halt. It’s the first nationwide work stoppage since 2007 for United Auto Workers, which says it hasn't been able to agree with management on key issues like pay raises and limits on using temporary workers. John Yang reports and talks to USA Today’s Nathan Bomey.

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  • Judy Woodruff:

    Nearly 50,000 workers at General Motors plants across the country went on strike at midnight, bringing production to an immediate halt.

    John Yang has the details.

  • John Yang:

    It's the first national work stoppage by the United Auto Workers since 2007. As negotiations resumed today, the union said it had been unable to reach a deal with GM over several key issues, including higher wages and limits on the use of temporary workers.

    The UAW also wants to end some of the concessions it made in 2009 to help GM through its government-led bankruptcy, including lower pay and benefits for new workers.

    James Cotton was on the picket line today in Detroit.

  • James Cotton:

    A few years back, we gave up a lot to keep this house open and all the houses around General Motors. And now that they're making more money than they ever have, we feel like we should get some of that stuff back, like cost of living and things of that nature.

  • John Yang:

    GM posted nearly $12 billion in profits, but the automaker says it needs to slash costs as it pivots to future technologies like electric cars and as sales decline.

    Last year, it said it was closing several plants, including this one in Hamtramck, Michigan, a decision that President Trump heavily criticized.

    Late last year, the "NewsHour"'s Yamiche Alcindor went to Hamtramck and spoke to one autoworker who said her job was her ticket to the middle class.

  • D’Nitra Landon:

    I have never made this much money hourly before in my life. I have never had these great health benefits before in my life.

  • John Yang:

    In a statement, GM said it had offered new investments in plants that improves wages, benefits and grows U.S. jobs in substantive ways.

    The strike comes as top UAW leaders, including current president Gary Jones, are under federal investigations for allegedly misusing union money.

    The auto industry remains crucial to the U.S. economy, with some 220,000 people employed making cars. Many more make the parts that go into them and work in other sectors of the industry.

    Nathan Bomey is a business reporter with USA Today. He previously covered GM for The Detroit Free Press. He's author of "Detroit Resurrected: To Bankruptcy and Back."

    Nathan, thanks so much for joining me.

  • Nathan Bomey:

    Thanks for having me.

  • John Yang:

    Let's begin.

    They do this every four years. And the UAW and the Big Three automakers negotiate new contracts. Going into this year's negotiations, broadly speaking, I want to ask you what the goals were on each side.

    Let's begin with the UAW. What did they hope to achieve?

  • Nathan Bomey:

    Well, I think the biggest thing that they wanted was to basically end this two-tier wage system that started about 10 years ago during the bankruptcies of General Motors and Chrysler, when the auto companies were on their knees.

    The autoworkers helped them get through it by basically giving concessions. And so what the UAW wants is to get some of that back. On the other side, you have GM and, of course, the other auto companies that also — they basically want to eliminate the gap between them and the foreign automakers, because it's still more expensive for the American automakers to produce vehicles in this country than it is for Toyota and some of the other foreign automakers.

  • John Yang:

    In their offer that GM released last night, which is unusual to talk about what they — what's on the table while the talks are still going on, they said that they made some — offered some investments into two of the biggest plants that are being idled, Hamtramck and Lordstown.

    Hamtramck, they want to build electric pickup trucks. Lordstown, they want to build new battery cells there with union workers.

    Are these going to be able to really get to the numbers and have comparable jobs that were there before?

  • Nathan Bomey:

    Yes, I think it's unlikely.

    If you look at when they made the announcement that they were idling these plants, the one in Ohio and the one in Michigan, I mean, these are political footballs in some sense, because you're talking about thousands of workers, and you have got politicians on both sides of the fence who have a significant interest in preserving those jobs.

    So I think GM understood that from the beginning. And now they're looking and saying, hey, maybe we can bring some jobs back here.

    But the reality is, if they bring batteries to Ohio, for example, Lordstown, that's simply not going to be as many jobs as you would see with a typical assembly plant.

  • John Yang:

    How long is it going to take before this starts to squeeze each side?

    GM is said to have healthy inventories on hand. The UAW has a strike fund that they started beefing up earlier this year. But when is this going to start to squeeze?

  • Nathan Bomey:

    If you look at GM's inventory levels, they have a few months' worth of vehicles at this point. But that doesn't mean they have a few months to spare.

    After a couple weeks, they'd run into trouble because then you would have certain vehicles or certain trim levels would run into issues, and then you have people walking into the dealers and not being able to get those vehicles.

    On the other hand, UAW workers only get $250, $275 a week in strike pay. So that's far below what your average worker is making on a given week. So they really can't last too long — too long as well. I think you're looking at a few days, maybe weeks, before this reaches a head. But you never know.

    There have been strikes in the past that have gone a couple months.

  • John Yang:

    And also not only GM itself, but the supply chain, their suppliers, the parts makers start getting squeezed.

  • Nathan Bomey:

    There is a ripple effect here.

    When the automaker can't make their cars, then the suppliers can't make their parts, and the other automakers can be affected.

  • John Yang:

    In the report, I talked about the federal investigation going into the spending habits of — or practices of current and former UAW officials.

    Is that a factor in these talks?

  • Nathan Bomey:

    Well, this is a significant federal corruption investigation.

    And I think the UAW at this point has to fear a federal racketeering case that could come on top and basically have the federal government taking control of the UAW. That's what happened to the Teamsters, and oversight lasted for a couple decades.

    So you have to wonder, is the UAW trying to get this contract done before that kind of thing happens?

  • John Yang:

    And, also, on the other side, what is GM's approach to this? Where they're seeing this union under investigation, does that affect their position?

  • Nathan Bomey:

    GM is walking a tightrope here. I think you see they're being very careful not to be too vocal in their criticism of the UAW.

    At the same time, they have said a few times, hey, this is a little questionable, but, hey, UAW, it's represents tens of thousands of workers and maybe this isn't reflective of the entire organization.

    But it is very uncomfortable for them to be negotiating at the same time they're under investigation by the federal government.

  • John Yang:

    Earlier today, the UAW said, GM, if you had given us this offer earlier, we might have avoided this strike.

    Any sense of how long this might go on?

  • Nathan Bomey:

    Well, you always have to ask yourself if this is a case of an unreliable narrator on both sides.

    I'm not sure when the official best offer was really made on each side, who came to the table first. It's tough to say.

    But I think, at this point, it doesn't seem like they're miles apart, but they're not inches apart either. I think you got a little time to go still.

  • John Yang:

    Nathan Bomey of USA Today, thanks so much.

  • Nathan Bomey:

    Thanks, John.

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