9-25-07, 1:50 pm

After General Motors refused to agree to keep new car production and jobs in the US as part of the 2007 auto negotiations with the United Auto Workers (UAW) earlier this week, the union called a national strike of 73,000 autoworkers at 80 General Motors plants in the US.

Wall Street insiders are praising GM for its hard line approach against the workers. GM is one of the largest multinational corporations in the world and ranked 3rd on the Fortune 500 list in 2006. The company has led the US manufacturing sector in outsourcing production to other countries.

'Wall Street is pleased to see GM taking a hard line stand when it comes to retiree health cost and the company's ability to manage its employment levels,' Joe Phillippi, of AutoTrends Consulting Inc., was quoted by one pro-business Web site as saying.

Phillippi referred to two major bargaining issues: how much GM would contribute to the health care trust fund known as the Voluntary Employees’ Beneficiary Association (VEBA), created in 2005; and, to the dispute over the company's plan to move jobs overseas.

UAW President Ron Gettelfinger denied that VEBA contributions were the cause of the strike. Disagreement over job security for active workers is the key issue in the unsettled portion of the contract, said the union. Specifically, the union wants new cars being planned for production to be built in the US, keeping US workers employed in union jobs.

GM believes that its hard line will force the workers to shorten the strike and give up the union's influence over job cuts and company restructuring, such as moving jobs out of the country.

For its part, the union has worked with GM and has accepted economic concessions and health care restructuring in order to strengthen the company's financial situation. In fact, restructuring agreed to by the union and implemented in 2006 helped save the company more than $6 billion and dramatically reversed the company's financial picture, which earned about $500 million in profits in the last quarter of 2006.

In this round of negotiations, which began last July, the union again sought to work with the company to find cost-saving measures. But the company imposed its hard line and refused to budge on the key contract issue of of keeping future auto production in the US.

After the September 15th deadline came and went, the union extended the contract deadline by nine days, hoping that a deal could be forged at the eleventh hour to avoid a strike.

Union negotiators quickly realized over this past weekend, however, that the company intended to refuse to move on the issue, and the union called a strike deadline for Monday (Sept. 24) at 11 am.

By noon on Monday, thousands of UAW members at GM plants across the country walked off the job.

The impact was immediate. This morning (Sept. 25), GM-owned parts plants in Canada that do business with US plants closed due to the strike. An estimated 1,400 Canadian autoworkers went on furlough. Another 17,000 could be laid off by the weekend due to the strike.

The strike will halt production of an estimated 12,200 cars per day. If it last longer than a few days, analysts estimate, the company will lose market share and its credit rating will be damaged.

At a press conference on Monday morning, Gettelfinger expressed disappointment that GM executives put the company's shareholders and workers in this position. 'We were very disappointed in this round of negotiations,' said Gettelfinger, 'to discover as we moved forward with the negotiations that it was a one way set of negotiations.'

By this past weekend, it became clear that 'it was going to be General Motors' way at the expense of the workers,' Gettelfinger added.

'The company walked right up to [Monday's] deadline like they really didn't care,' Gettelfinger said. The union president described GM's actions as pushing the workers to strike by refusing to move at the bargaining table.

The company and Wall Street analysts have been dishonest about the cause of the strike. Preferring to talk about the company's difficult financial position, they ignore the fact that the basic issue is about keeping production jobs in the US. GM wants to use its supposed tough financial position to leverage severe job cuts that can be moved overseas.

It is almost comedic. When GM talks with shareholders, creditors, and potential investors, it talks about the financial strength of the company and its long-term robustness. When it talks to the media about the contract negotiations, it poses as if on the verge of bankruptcy.

At bottom, GM is putting its profit margins ahead of our communities which rely on good-paying jobs, not just for a 'middle-class' standard of living but also for the economic ripples caused by a strong tax base: a sound economy, good public schools, adequate public services, and more. For higher dividends, GM's executives will dismantle our communities and sell them off to the highest bidder. The UAW deserves our strong support for leading this fight against corporate America's assault on our communities and on all workers.

--Reach Joel Wendland at

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