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Autoworkers union counters GM contract offer amid strike

Members of UAW Local 31 picketing in Kansas City, Kan
Members of UAW Local 31 picketing at a GM plant in Kansas City, Kan.
(Associated Press)

The United Auto Workers made a counterproposal to General Motors Co. that would end a nearly monthlong strike if the automaker agrees, capping a tumultuous day in which the union and company traded barbs and blame.

UAW Vice President Terry Dittes offered no specifics on the proposal late Friday in a letter sent to members and published on the union’s website. GM had been awaiting a response to its latest offer made Monday, which a person familiar with the matter said included $9 billion of total investment in U.S. plants, about $2 billion more than the carmaker had proposed in mid-September.

Analysts say the strike has cost GM more than $1 billion of lost profit. The automaker’s senior executives appealed to rank-and-file employees late this week, portraying UAW leadership as dragging its feet in responding to its proposals.

“We object to having bargaining placed on hold,” Scott Sandefur, GM’s vice president of North American labor relations, wrote to Dittes late Thursday in a letter obtained by Bloomberg. “As we have urged repeatedly, we should engage in bargaining over all issues around-the-clock to get an agreement.”

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The public war of words escalated midday Friday, with the UAW issuing an open letter accusing GM of holding up negotiations itself to “starve UAW-GM workers off the picket lines” and protect its own interests. The union said its negotiators remain committed to bargaining day and night to find an agreement.

“These delaying tactics have human costs. Families are suffering, from Detroit to Texas to New York,” the letter said. “This strike has been and continues to be about securing the American workers’ future.”

The UAW’s walkout has halted production at 34 U.S. plants and disrupted output at factories in Mexico and Canada. While GM publicly released details of its first formal offer to the union on Sept. 15 — the day the UAW called the strike — the company had until this week limited public criticism of union leaders, who themselves are dealing with a credibility crisis.

GM was raising the pressure on UAW brass Friday in a bid to clinch an agreement before the strike enters a fifth week.

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“GM is frustrated with the pace of negotiations,” said Art Schwartz, a former GM labor negotiator who’s now a consultant in Ann Arbor, Mich. “They gave the union a comprehensive offer on Monday, and it’s Friday and they haven’t had a response yet. If I had members out on strike, I would be responding within hours.”

GM shares rose 2.6% on Friday, paring their decline since the strike began to 8.5%. While credit-rating companies initially warned of risk to the automaker if the walkout lasted more than a couple weeks, they’ve been reluctant to downgrade GM’s debt.

“GM has adequate liquidity to contend with a strike of this duration,” Bruce Clark, lead U.S. auto analyst for Moody’s Investors Service, wrote in a report Friday. The carmaker would start to forgo significant earnings if the walkout extends into late November, he said.

Earlier Friday, GM released a broad outline of the offer made at the beginning of the week, saying it would boost wages and lump-sum payments while also preserving healthcare benefits. Gerald Johnson, GM’s executive vice president of manufacturing, wrote to employees the automaker was prepared to enhance profit-sharing, including by lifting the cap on how much is paid out based on the company’s earnings.

UAW members also would receive bigger ratification bonuses than in 2015, when each worker was paid an $8,000 signing bonus. And the offer gives temporary workers a clear path to permanent status, Johnson said.

“The strike has been hard on you, your families, our communities, the company, our suppliers and dealers,” Johnson wrote to employees. “We have advised the Union that it’s critical that we get back to producing quality vehicles for our customers.”

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