Skip Navigation

Strike Against GM Ends, UAW President Resigns Amid Corruption Probe

December 15, 2019

GM lost billions, and workers gained little.

A 40-day strike by nearly 46,000 United Auto Workers (UAW) members against General Motors resulted in losses for some workers after an agreement between the union and automaker ended the strike.

The work stoppage was the longest such walkout in decades.

Striking UAW members did not receive paychecks during the walkout. Instead, they had to make do with $250 a week in union-funded strike benefits until the UAW board raised that to $275.

Anderson Economic Group estimated skilled trade workers lost $9,240, “in-progression workers” (those hired after 2007) lost $6,240, and temporary workers lost $5,280, Fox Business reported November 7.

GM hourly employees received ratification bonuses to offset pay lost during the strike. Full-time employees received $11,000, and temporary workers pocketed $4,500, but union dues and taxes ate into those bonuses. For temporary workers, the ratification bonus was less than the lost wages. In total, the strike, which ended on October 25, cost UAW workers $14 million a day in lost wages, the Anderson Economic Group calculated.

Bonuses, Lost Wages

Under the terms of the new contract, more than 900 temporary workers will become full-time employees on Jan. 1, 2020. After that, the remaining temporary workers will get permanent jobs as they accrue time on the job. In-progression workers will receive a raise within 52 weeks of their last raise. The old contract set a starting wage for these workers at $17 an hour, and the new contract raises it to $28 an hour, eight years later.

“Under the deal, wages for most veteran workers will rise by 6% during the four-year life of the contract to $32.32 an hour,” Fox 59 News reported on October 25.

The share of their wages hourly workers pay for health care will remain at 3 percent.  GM also agreed to invest $7.7 billion in the United States to create or retain 9,000 jobs. The union failed to get GM to keep three of its plants open.

Feds Probe Corruption

The federal government has been investigating corruption among union officials, and the probe has produced “10 convictions and charges against 13 people” so far, The Detroit News reported on November 20.

UAW President Gary Jones took a leave of absence with pay on November 4. Jones resigned as UAW president on November 20 and resigned his union membership on November 29. Jones is suspected of splitting $1.5 million in union funds with another UAW official, The Detroit News reported. Federal officials seized more than $32,000 from Jones’ home in August.

The GM strike produced relatively few benefits for the workers, leading some UAW members to wonder if the goal of the strike was to divert attention from union bosses’ legal problems, says Stanley T. Greer, a senior research associate at the National Institute for Labor Relations Research.

“During the job action, a number of GM’s frontline workers voiced their suspicion that Gary Jones and other ethically challenged union bosses had called the GM strike primarily to save their own skins, rather than to secure a better deal for union members,” Greer said. “Now that the strike is over and it is clear how much it cost workers and how little it accomplished for them, such suspicions are bound to keep rising.”

‘Not Worth It’

It is instructive to compare GM’s original offer with the final offer that was accepted, says Christopher C. Douglas, associate professor of economics at the University of Michigan-Flint.

“The comparison makes clear that the strike was not worth it,” Douglas said. “GM originally offered the UAW an $8,000 signing bonus, $7 billion of investment in the United States, guaranteed wage increases and lump-sum payments, profit sharing, and capping health insurance at 3 percent of pay. GM originally wanted to raise the cap to 15 percent but quickly backed down.

“The final offer is largely identical except the ratification bonus is $11,000,” Douglas said. “Thus, full-time UAW members lost between $6,240 and $9,240 to gain an extra $3,000. Temporary workers lost even more.

“The strike was a miscalculation on UAW’s part, and the members would have been better off agreeing to the contract much earlier and avoiding the long strike altogether,” Douglas said.

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Article Tags
Economy
Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org

Related News & Opinion View All News