After two months of negotiations and roughly one week after its existing contract expired, the United Auto Workers (UAW) went on strike today against General Motors (GM), the country's largest automaker. Some 73,000 workers are expected to walk off the job.
The number of work stoppages has been down in the U.S. in recent years. Last year, there were no strikes of comparable size. The last major UAW strike occurred nearly a decade ago and involved several parts plants, and the last strike directly against auto manufacturing operations occurred three decades ago.
The strike comes at a bad time for the U.S. economy, which is already battling a housing slump, a credit crunch, and $80 a barrel oil prices. Employment figures last month indicated that the number of jobs had actually decreased from the month before. A large, long-lasting strike would increase the chances of entering a recession. The only "good" news (if you can call it that) is that GM's manufacturing workforce has shrunk so much that many fewer workers are involved than in the earlier UAW strikes.
The strike also comes at a bad time for GM. The company has seen its market share, work force, and profitability decline. In the late 1970s, GM sold nearly half of the vehicles in the U.S.; today it sells less than a quarter. The company has suffered net losses in the last two years. Although worker productivity is high, the company has huge legacy costs that reduce its competitiveness. Also, the strike comes right at the start of the new auto year.
Although both sides are rushing out press releases expressing disappointment and blaming the other for the work stoppage, there are some encouraging signs. The most hopeful are that the UAW and GM are keeping most details of the negotiations under wraps and that the UAW has asked to continue meeting. There also appears to have been some progess in the negotiations on some major issues, such as shifting some of the risk for retiree health expenses away from GM and towards the union. The remaining sticking points appear to be related to job security measures.
Still, a strike of any length is unwelcome news, especially for the families and communities involved.
