GM Takes Aim at UAW

May 16, 2008
2008 Chevrolet Malibu

2008 Chevrolet Malibu

General Motors has fired a shot over the bow of the United Auto Workers Union – canceling medical benefits and life insurance policies for the workers who recently walked off the job at a plant near Lansing, Michigan.

The automaker has been taking it hard, in recent months, as the union settled into what is now a three-month strike against American Axle, a prime GM supplier. That dispute has forced as many as 34 GM factories to close. Now, the union has started going after the automaker itself, with a walkout at several plants, including the Lansing line, which makes the hugely popular new Chevrolet Malibu. And even more plants could be hit by strikes, in the coming weeks, because they’ve yet to resolve “local” contracts with the automaker. (GM and the UAW came to agreement over a broader, national contract last autumn.)

The impact of these strikes is yet unclear, but certainly, the economics are significant, especially with Malibu production now on hold. GM can afford to slow down production of pickups, which remain in good supply, but the Chevy sedan is critical, as the U.S. market shifts from trucks to more fuel-efficient passenger cars.

But workers don’t like being without benefits even if they are officially on strike. And picking up the medical coverage, even temporarily, is a costly burden for a union weakened by a steady decline in membership. So it seems likely that GM is trying to put the screws to the union – and not only to resolve the Lansing strike, but to finally wrap up the walkout at American Axle.

The company has also fired some warning shots at the Canadian Auto Workers Union, with whom it is negotiating a separate national agreement right now. As we go to, er, print, that tactic – threatening Canadian plant closures – seems to be getting the union’s attention, and we could see an agreement any time.

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