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The Honolulu Advertiser
Posted on: Tuesday, September 25, 2007

UAW strike shuts down GM plants nationwide

 •  Lengthy strike could stall the launches of 3 key GM vehicles

By Katie Merx and Tim Higgins
Detroit Free Press

Hawaii news photo - The Honolulu Advertiser

Striking UAW members Rocco DeGiulio, left, 76, and Ed Sims, 57, picket outside a GM power-train plant in Romulus, Mich.

PATRICIA BECK | Detroit Free Press

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DETROIT — The strike many believed never would happen shut down General Motors Corp. plants nationwide yesterday, casting uncertainty on whether the U.S. auto industry can get the kind of revolutionary changes it says it needs to compete.

An end to the strike will depend on resolving the key union issues of wages and benefits, job security and investment in U.S. facilities and vehicles, UAW President Ron Gettelfinger indicated at a news conference yesterday. He repeatedly said that the strike was not related to talks over a landmark retiree healthcare trust on which the two parties are believed to have agreed to a general framework.

Everyone hoped for a short strike as talks continued last night. They recessed and are expected to resume today.

Analysts and labor experts said the automaker and the UAW can manage a short labor stoppage without much trouble. GM has enough cash and inventory to manage a strike of a few weeks to a couple of months. The UAW had more than $800 million in its strike fund as of November — enough, in theory, to strike GM for a year.

But the frightening effects a national strike would have on UAW members, their households and the many other businesses and individuals who rely on GM for their livelihoods likely would come much sooner.

Even though workers knew a strike was a possibility, the call to walk off the job yesterday morning stirred fear, surprise and anxiety in the hearts of many who won't receive paychecks this week. Those workers will receive strike pay after eight days, worth just $200 a week.

"We can't afford to be out," said Nicole Sanders, 30, who walked out at Detroit-Hamtramck Assembly and wasn't happy about it. "I've got babies that got to be fed. We can't afford it. Our economy is too bad. ... I can hardly afford gas to come to work."

The vast majority of workers were supportive of leadership's decision to call a strike, saying the union needed to fight for equal rights and benefits for all workers, and to protect the hard-earned benefits that retirees were promised in earlier contracts. Some picket lines on the lovely fall day were almost jovial, if you could ignore the nervous energy.

Mario Flores, who works at the GM truck assembly plant in Pontiac, Mich., said he's not surprised the strike was called. GM managers seem to want to blame their problems on the UAW, not mistakes they made in losing market share, he said. "We don't want the company to fail, but we have to have our lives, too," he said.

But even among the hard-liners who believe the UAW needed to call a strike to stand its ground on job security and hold the line on wages and benefits, there was a sense that the strike would have to be short-lived to avoid causing irreversible damage to the automaker or the union.

GM is pushing the UAW to allow it to lower its labor costs — by doing such things as transferring responsibility for retiree health to an independent trust, freezing cost-of-living increases and instituting a new level of benefits for new hires — as the automaker battles to reach sustained profitability in its home market despite having a falling share of the sales market and higher costs than its foreign competitors.

And while the fate of union workers is inextricably tied to the fate of the company in the United States, the union must win commitments for middle-class jobs to sell such a deal to its 73,000 hourly workers, analysts and workers say. A majority of GM workers must ratify an agreement for it to take hold.

Analysts and some workers speculated the call to strike may be a plan to get a concessionary contract ratified. Although it may push GM to offer a bit more, it also drives home the risks of a strike to members.

Gettelfinger said during a news conference at the union's headquarters in Detroit that he called the strike as a last resort after GM seemed unwilling to make any further movement toward compromise on key issues.

"The No. 1 issue here is job security," Gettelfinger said. "That's one of our primary concerns. We're talking about investment, we're talking about job creation, we're talking about product being committed into the plant."

He repeatedly said that the strike was not related to talks over the retiree healthcare trust, known as a voluntary employee beneficiary association.

"We were very disappointed in this round of negotiation to discover as we moved forward that it was a one-way set of negotiations. It was gong to be General Motors' way at the expense of the workers," Gettelfinger said. "The company walked right up to the deadline like they really didn't care."

GM spokesman Dan Flores said in a statement: "We are disappointed in the UAW's decision to call a national strike. The bargaining involves complex, difficult issues that affect the job security of our U.S. workforce and the long-term viability of the company. We will continue focusing our efforts on reaching an agreement as soon as possible."

Although both parties said they desire a prompt resolution of the issues, analysts said they have a little time before the matter becomes truly detrimental.

GM has 111 days of inventory on hand to sustain dealers for two to three months, according to estimates by Lehman Brothers analyst Brian Johnson.

• • •

Impact in Hawai'i not known yet

Russ Wong, general manager of Jackson Auto Group, said it's too early to tell what kind of impact the General Motors strike would have on the supply of cars in Hawai'i.

The dealership's inventory of new Pontiac models remains at healthy levels and GM is in the process of shipping "a bunch of 2008" models here, Wong said.

GM accounts for about a quarter of Jackson Auto's inventory at its three-acre lot on Nimitz Highway, said Wong. Lincoln, Mercury, Isuzu and Volvo account for most of the dealership's sales, he said.