What The GM Strike Means For Ford And Fiat Chrysler

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The United Auto Workers are still on strike even with a deal in sight, Nissan’s new boss plans a slow and steady recovery, Volkswagen’s American babysitter is sticking around and more for this most glorious Morning Shift of Friday, Oct. 18, 2019.

1st Gear: Still On Strike

Yes, the UAW workers at General Motors have reached a tentative agreement on a new contract. And yes, they’re still on strike. That will be the case until a deal is ratified, something that could take another week at least.


At this point, everyone is feeling the pinch from the action.

From Automotive News:

Prolonging the strike by another week means an additional $400 million in losses for GM, according to the Anderson Economic Group, a consulting firm in East Lansing, Mich. UAW workers will lose $14 million more in lost wages per day, and supplier employees who continue to be laid off will lose $20.5 million per day, the firm estimates.

Through bonuses and wage increases, “GM did everything they could with money,” Patrick Anderson, CEO of the firm, told Automotive News. “They absolutely needed the flexibility to close plants they can’t possibly fill. I’m not surprised that’s a bitter pill to swallow for the UAW.”


Read more about what workers may be getting here and here.

2nd Gear: What About FCA And Ford?

This go-around, GM was the “target company” for UAW negotiations, meaning it would go first and then set the general pattern of what Ford and Fiat Chrysler can expect when it’s their turn. Like GM, those automakers want to cut labor costs as well. But, and probably owing to this month-long strike, the GM contract is a pretty good one for the UAW; Ford and FCA likely aren’t going to get much to slash in theirs.


It also means that strikes are unlikely for those automakers too. From The Detroit Free Press:

The tentative agreement proposed Thursday to UAW local leaders grants GM the ability to close three of its plants in the United States. But the union-created document lays out little that would lower labor costs ahead of what automakers around the globe anticipate will be a disruptive and expensive decade of change.

“I’m sure neither Ford nor Chrysler is going to be thrilled with the economics of this deal,” said Arthur Schwartz, president of Labor and Economics Associates in Ann Arbor and the former general director of labor relations at GM. “It’s probably richer than 2011, and probably somewhat richer than 2015.”


Also, this:

The record-setting $11,000 signing bonus GM is offering UAW members upon ratification of the contract would hurt Ford, which has more hourly UAW workers in the U.S. than GM. It’s unclear the other Detroit automakers would pay a similar ratification bonus. They didn’t in 2015: GM paid workers hired before 2007 $8,000 after ratification; Ford paid $8,500; and FCA paid $4,000 to legacy employees.

Ford stands to take a greater hit from a lack of change to health care. GM had initially proposed to raise health care costs for UAW members — which are some of the lowest in the country — but ultimately there’s no change.

Meantime, Fiat Chrysler has more employees hired after 2007 than the other two automakers. Changes to pay for in-progression workers hired after 2007, and the temporary workers that were hot-button issues during the GM contract talks, could cost Fiat Chrysler over the next contract term if the automaker has to hash out a similar deal.


The Ford and FCA negotiations are expected to be resolved fairly quickly.

3rd Gear: Nissan’s New Boss Promises Exciting ‘Gradual’ Recovery

Nissan is in trouble on a lot of fronts, one of the biggest being the fact that its executives keep getting fired or maybe imprisoned for financial misconduct. It has a new CEO coming in, Makoto Uchida, and he’s not messing around—but what he told employees in a video was that the turnaround won’t happen overnight. Via Reuters:

“Nissan is on the right path for recovery ... although it might be a gradual process,” Uchida, who is Nissan’s China chief, said in a video message posted on an internal company website.

To restore profitability, the Yokohama-based automaker is in the process of laying off some 12,500 employees globally and is trying to mend frayed ties with its alliance partner, Renault SA .

Following various internal meetings, Uchida told employees in the video he was convinced that Nissan was on the right path for recovery, though it might be a gradual process.

“However, please understand that I cannot do it alone,” he said.

“The most important thing right now is to have trust and full contribution from each one of you.”

Uchida said he was poised to use all his experience to turn the company around, which he stressed also “will include the building of alliance partnerships”.


The story describes Uchida as “known for his unflagging work ethic and relentless focus on cost control.” You definitely get shades of Carlos Ghosn from that.

4th Gear: VW’s American Babysitter Sticks Around

We don’t fully trust Volkswagen not to fuck around. Not yet. Via Reuters:

Volkswagen said Thursday it has been granted an additional 90 days to test its compliance programs required under a criminal plea agreement with the U.S. government following its emissions cheating scandal.

The extension means that an independent compliance auditor, Larry Thompson, will monitor Volkswagen until September 2020.

Thompson, a former deputy U.S. attorney general, was installed in 2017 after VW was caught manipulating pollution tests. He and his team have been seeking to ensure that VW’s revamped compliance procedures are working.


5th Gear: GM’s Strike Is Part Of A Bigger Moment

American organized labor has taken some hard hits over the past few decades thanks to both concerted efforts aimed at weakening union power and a public that has often questioned its modern relevance.


But with the strikes at GM, a variety of school districts and at companies like AT&T and Mariott, folks are beginning to wonder if unions are making a comeback of sorts. From The Detroit Free Press:

Last year, there were 20 major work stoppages across several industries, the highest total since 2007. The strikes and walkouts included a lot of school districts, but also big corporate names like AT&T and Marriott. The number of workers involved, 485,000, was the highest since 1986, the Bureau of Labor Statistics reports.

[...] It’s paying off for workers. Under the tentative contract to end the GM strike, UAW members won pay raises, retained health-care benefits and will see signing bonuses of up to $11,000. The big loss was the inability to convince GM, which reported $2.4 billion in quarterly profit just as negotiations got underway, to retain production at its Lordstown Assembly Plant in Ohio.

Workers didn’t fight just for themselves, but for their coworkers. Creating a pathway for permanent status for GM’s temporary workers, who earn a fraction of the pay despite often doing the same job, became a big issue in the strike. It was ultimately resolved as part of the package won by the UAW, or more formally, the United Automobile, Aerospace and Agricultural Implement Workers of America.

“The UAW strike touched a nerve,” said Kent Wong, director of the UCLA Labor Center‌ in Los Angeles. Paying factory workers differently for the same tasks divides them and “will continually transform middle-class jobs into low-wage jobs.”


We’ll see how the UAW negotiations end at all three automakers, but it’s hard not to view this moment as a pretty powerful one for labor after many years.

Reverse: Dymaxion!


Neutral: Are Unions Back?

At least in the auto industry, this is a very different UAW than we’ve seen in recent years—that one was more known for this shit than effective organizing. Where does it go from here?