On September 15, 2019, roughly 48,000 members of the Union of Auto Workers (UAW) went on strike from General Motors (GM) factories across the country. Their goals in striking related to issues brought on by GM’s bankruptcy during the Great Recession. In order to allow GM to recover, the UAW conceded lower job security and health care plans. However, since GM has returned to being a profitable company, UAW workers wanted greater work benefits. Lasting six weeks, the strike ended on October 25.
So how did the strike impact GM? Production completely ceased at over 30 GM factories in the U.S, meaning that no more cars and trucks were being rolled off of the assembly line. It also slowed down production for parts suppliers in the U.S. and Mexico. However, this did not mean that GM dealerships did not have any cars to sell. According to Bank of America Economic Analyst John Murphy, GM dealerships had over 83 days of inventory on hand at the beginning of the strike. Because the strike did not last longer than this time period, GM’s revenue never decreased, meaning that the strike did not significantly scare away investors. However, over the course of the strike, it is estimated that GM lost around 2 billion in revenue.
The strike did not significantly help workers either. While the workers did gain a three percent pay increase, this is not a great victory, considering that they had earned the same in 2015, without going on strike and foregoing pay. GM also has agreed to keep a Detroit factory open and invest three billion dollars into it, using it for the production of electric trucks and SUVs. Two other factories, one in Tennessee and one elsewhere in Michigan, will both receive one-billion-dollar investments and will be used to produce SUVs. These internal investments will create more jobs for autoworkers. Permanent workers also gained a signing bonus of around $11,000, which really only covers lost wages throughout the strike.
Overall, the GM workers strike caused problems for both workers and the company, as GM lost a significant amount of revenue while its workers were barely able to pay their bills. Unproductive for both parties, the strike is largely seen as a failure.
Sources:
I think this is a common problem with strikes. For the most part they end up not working for the union and just make the corporation more upset, meaning nobody wins. This makes for a more rocky relationship between the labor market and the owners in the long run, which usually comes back to hurt the consumer, much like how we saw in the Baseball case.
ReplyDeleteStrikes work when unions are able to cause enough damage to the company to force them to accede to their demands. In GM's case, both sides were hurt by the conflict, but the workers were hurt more - which led to them taking whatever they could, even if it was only marginally better than what they previously had. GM even shut down their plan to increase health care premiums during the strike, in a way punishing workers. The UAW was crucial in making the strike work, providing $275 stipends to striking workers, but that was not enough money to sustain the workers, ultimately leading to losses on all sides.
ReplyDeleteSource: https://www.vox.com/identities/2019/10/25/20930350/gm-workers-vote-end-strike
Delete