GM says they are offering workers a generous contract with wage hikes and new jobs, FOX Business' Grady Trimble reports.
Autoworkers now in the second day of a strike at General Motors will have to wait almost two weeks before receiving assistance pay of $250 a week.
Continue Reading Below
The union benefit, which breaks down to $50 per weekday, is available to workers on Day 15 of a strike, according to the United Auto Workers website. That comes to $6.25 an hour, below the federal minimum wage of $7.25 -- or $13,000 a year, which is barely above the federal poverty line of $12,490 for a single-person household.
.
MORE FROM FOXBUSINESS.COM...
GM autoworker Patricia Brown, who lives in Detroit, told FOX Business on Monday that her biggest fear is "that we might be here for a while... and we can't make it on $250 a week. You know, GM might not want to budge. So I'm just here trying to prove a point, that's it."
We can't make it on $250 a week. You know, GM might not want to budge.
Advertisement
The weekly pay barely covers rent for a two-bedroom apartment in Detroit, according to the Detroit Free Press. "We don't want to do it at all, but I guess we're going to be out here as long as we can," Brown said.
Workers have to meet a few qualifications to get strike pay. They must participate in the labor action, and if they perform outside work earning more than $250 a week, they forfeit the assistance. Those workers still qualify for specified health care benefits available through the UAW Strike and Defense Fund.
The UAW will raise its strike pay to $275 a week in 2020.
This is the first strike against GM in 12 years. More than 49,000 UAW members walked off General Motors factory floors or set up picket lines early Monday. UAW is demanding a bigger share in the company's profits, including through annual pay raises.
The Federal Reserve is widely expected to cut interest rates at the conclusion of its two-day meeting on Wednesday.
Continue Reading Below
A rate cut would be the Fed’s second in the same number of meetings as it looks to keep the longest economic expansion on record going into a 12th year.
“The Fed will likely cut 25bp at this week’s meeting and guide toward further rate reductions,” New York-based Bank of America Merrill Lynch economists wrote Monday. “The meeting should have a dovish tone. However, in our view, the big question is whether Chair Powell continues to characterize the easing cycle as a 'mid-cycle adjustment."
Recent economic data has softened a bit as the U.S.-China trade war has stretched into its second year. The U.S. economy grew at an annualized 2 percent rate in the second quarter, down from the previous quarter’s 3.1 percent print. U.S. manufacturing and employment data have also shown signs of slowing.
“The United States, because of the Federal Reserve, is paying a MUCH higher Interest Rate than other competing countries,” Trump tweeted Monday.
Advertisement
“They can’t believe how lucky they are that Jay Powell & the Fed don’t have a clue. And now, on top of it all, the Oil hit. Big Interest Rate Drop, Stimulus!”
Trump isn’t the only one calling for a big rate cut.
St. Louis Fed President James Bullard, who is a voting member, said earlier this month an outsized 50 basis point cut is needed to get ahead of market expectations and cushion the economy from the U.S.-China trade war.
Still, traders at the CME Group are pricing in a 65.8 percent chance the Fed cuts rates by 25 basis points on Wednesday, down from more than 90 percent just last week. They see a zero percent chance of a 50bp cut.
Even without a 50bp cut at Wednesday's meeting, the Fed is expected to lower rates further before the end of the year.
“Beyond the September meeting, we continue to expect the FOMC to deliver a third and final 25bp cut to 1.5-1.75 percent in October,” a Goldman Sachs economics research team wrote Friday.
“A 75bp total realignment of the policy rate appears to be roughly the ‘mid-cycle adjustment’ following the 1990s template that the Fed leadership has in mind, a moderate response to moderate concerns about growth risks and soft inflation.
United Auto Workers President Gary Jones speaking at the opening of GM-UAW contract talks on July 16 in Detroit.
The deadlock comes at an awkward time for the United Auto Workers union, one of the most powerful labor groups in the country.
UAW President Gary Jones was directly implicated late Thursday in a growing scandal involving the union and its finances, the Detroit News reported.
It could further damage the necessary trust that rank and file union members have in the union's leadership during negotiations.
The scandal involves misappropriation of union funds, and in some cases, union officials accepting bribes from officials at one of the automakers, Fiat Chrysler.
Agents from the FBI, IRS and Labor Department had searched Jones' home late last month, an FBI spokesman confirmed to CNN.
On Thursday a top union official, Vance Pearson, became the first active union official to be indicted in the scandal.
Nine other people who have pleaded guilty in the scandal were former union officials, the widow of one union official, or employees at Fiat Chrysler who dealt with the union.
The indictment did not name Jones, but the Detroit News reported that he's one of the unidentified co-conspirators named in the government's filing, identified only as "UAW Official A." The News cited three unnamed sources for its report.
The allegation against the UAW president, even if only in a news report, could be bad news for GM in its hope of reaching a deal with the union at a difficult time for the industry, said Kristin Dziczek, vice president of industry labor and economics for the Center for Automotive Research, a Michigan think tank.
United Auto Workers President Gary Jones speaking at the opening of GM-UAW contract talks on July 16 in Detroit.
The deadlock comes at an awkward time for the United Auto Workers union, one of the most powerful labor groups in the country.
UAW President Gary Jones was directly implicated late Thursday in a growing scandal involving the union and its finances, the Detroit News reported.
It could further damage the necessary trust that rank and file union members have in the union's leadership during negotiations.
The scandal involves misappropriation of union funds, and in some cases, union officials accepting bribes from officials at one of the automakers, Fiat Chrysler.
Agents from the FBI, IRS and Labor Department had searched Jones' home late last month, an FBI spokesman confirmed to CNN.
On Thursday a top union official, Vance Pearson, became the first active union official to be indicted in the scandal.
Nine other people who have pleaded guilty in the scandal were former union officials, the widow of one union official, or employees at Fiat Chrysler who dealt with the union.
The indictment did not name Jones, but the Detroit News reported that he's one of the unidentified co-conspirators named in the government's filing, identified only as "UAW Official A." The News cited three unnamed sources for its report.
The allegation against the UAW president, even if only in a news report, could be bad news for GM in its hope of reaching a deal with the union at a difficult time for the industry, said Kristin Dziczek, vice president of industry labor and economics for the Center for Automotive Research, a Michigan think tank.
The union's 46,000 hourly workers walked out at 31 GM factories and 21 other facilities, spread across nine states, mostly in the center of the country. It's the largest strike by any union against any business since the last strike at GM in 2007.
The strike started at 11:59 pm Sunday night. The two sides did not formally meet Sunday after the union declared its intention to strike at a morning press conference, although union spokesman Brian Rothenberg said that the dialogue between the two sides was ongoing. A new meeting of the two sides is set for 10 a.m. Monday.
The union said that GM was putting profits ahead of employees who helped to turn the company around when it went through bankruptcy and federal bailout a decade ago.
The company said it made a substantial offer that includes improved pay and profit sharing for union members, along with investment to bring new jobs. It also promised a "solution" for two of the four plants currently slated for closure: one in Detroit and another in Lordstown, Ohio.
The company did not say what the solution would be. But a person familiar with GM's offer said it included a promise to build a new electric truck at Detroit Hamtramck, and to build new batteries for electric vehicles in Lordstown. That work wouldn't start immediately, so the plants would likely remain dark for some time. Work would start sometime in the next four years if the offer is accepted.
A source close to the UAW with direct knowledge of negotiations said most of the proposals the company disclosed publicly on Sunday came very late in negotiations Saturday.
The UAW has vowed that keeping the plants open would be a key bargaining demand. Late Saturday it said while there had been progress in the talks there was still "significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing."
GM says its average hourly employee earns about $90,000 per year, not including benefits. But the number of hourly workers at GM has declined sharply in recent decades, due to a combination of automation, lost market share and outsourcing. But GM still builds the overwhelming majority of cars it sells in the US market in North America. And it has far more factories in the United States than it does in Mexico or Canada.
The union had earlier extended the contracts at two other US automakers with UAW contracts, Ford(F) and Fiat Chrysler(FCAU), as it targeted GM in an effort to reach a deal that would set a pattern for the industry. The union announced late Saturday while membership would work past the original 12:01 a.m. ET contract expiration early Sunday, there would be no long-term extension of the contract at GM if the two sides did not reach a deal on Sunday.
All three automakers are dealing with slower sales and the need to make huge multi-billion-dollar investments in developing electric and self-driving vehicles that have more long-term potential than current market demand.
It was the need to save money for those efforts that GM halted operations at three US plants — including the assembly line in Lordstown, and announced plans to shut the Hamtramck plant, its last Detroit factory, early next year.
But negotiations come as the union is hit by a scandal involving misappropriation of union funds, and in some cases, union officials accepting bribes from officials at Fiat Chrysler. Nine people associated with the union or Fiat Chrysler have already pleaded guilty to federal charges.
Last week, the Detroit News reported the union's president, Gary Jones, was the unnamed union official identified in the most recent indictment as "UAW Official A." The union has not responded to a request for comment about that report.
Experts say the scandal will make it more difficult to get rank and file union members at the automakers to ratify any tentative deal reached by union leadership. Four years ago the deals all passed by only narrow margins, even though there was no scandal at that time.
The last strike 12 years ago lasted only three days, but some strikes against GM in the past have stretched on for months. For many of the employees hired since 2007, this is their first work stoppage.
The union's 46,000 hourly workers walked out at 31 GM factories and 21 other facilities, spread across nine states, mostly in the center of the country. It's the largest strike by any union against any business since the last strike at GM in 2007.
The strike started at 11:59 pm Sunday night. The two sides did not formally meet Sunday after the union declared its intention to strike at a morning press conference, although union spokesman Brian Rothenberg said that the dialogue between the two sides was ongoing. A new meeting of the two sides is set for 10 a.m. Monday.
The union said that GM was putting profits ahead of employees who helped to turn the company around when it went through bankruptcy and federal bailout a decade ago.
The company said it made a substantial offer that includes improved pay and profit sharing for union members, along with investment to bring new jobs. It also promised a "solution" for two of the four plants currently slated for closure: one in Detroit and another in Lordstown, Ohio.
The company did not say what the solution would be. But a person familiar with GM's offer said it included a promise to build a new electric truck at Detroit Hamtramck, and to build new batteries for electric vehicles in Lordstown. That work wouldn't start immediately, so the plants would likely remain dark for some time. Work would start sometime in the next four years if the offer is accepted.
A source close to the UAW with direct knowledge of negotiations said most of the proposals the company disclosed publicly on Sunday came very late in negotiations Saturday.
GM announced plans in November of 2018 to shut the Detroit and Lordstown assembly plants, along with transmission plants in Baltimore and Warren, Michigan. The UAW has vowed that keeping the plants open would be a key bargaining demand. Late Saturday it said while there had been progress in the talks there was still "significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing."
GM says its average hourly employee earns about $90,000 per year, not including benefits. But the number of hourly workers at GM has declined sharply in recent decades, due to a combination of automation, lost market share and outsourcing. But GM still builds the overwhelming majority of cars it sells in the US market in North America. And it has far more factories in the United States than it does in Mexico or Canada.
If the union goes on strike, it will be the largest by any union against any US business since the last time UAW members struck GM in 2007.
The union had earlier extended the contracts at two other US automakers with UAW contracts, Ford(F) and Fiat Chrysler(FCAU), as it targeted GM in an effort to reach a deal that would set a pattern for the industry. The union announced late Saturday while membership would work past the original 12:01 a.m. ET contract expiration early Sunday, there would be no long-term extension of the contract at GM if the two sides did not reach a deal on Sunday.
All three automakers are dealing with slower sales and the need to make huge multi-billion-dollar investments in developing electric and self-driving vehicles that have more long-term potential than current market demand.
It was the need to save money for those efforts that GM halted operations at three US plants — including the assembly line in Lordstown, and announced plans to shut the Hamtramck plant, its last Detroit factory, early next year.
But negotiations come as the union is hit by a scandal involving misappropriation of union funds, and in some cases, union officials accepting bribes from officials at Fiat Chrysler. Nine people associated with the union or Fiat Chrysler have already pleaded guilty to federal charges.
Last week, the Detroit News reported the union's president, Gary Jones, was the unnamed union official identified in the most recent indictment as "UAW Official A." The union has not responded to a request for comment about that report.
Experts say the scandal will make it more difficult to get rank and file union members at the automakers to ratify any tentative deal reached by union leadership. Four years ago the deals all passed by only narrow margins, even though there was no scandal at that time.
The last strike 12 years ago lasted only three days, but some strikes against GM in the past have stretched on for months. For many of the employees hired since 2007, this is their first work stoppage.
Forty-six thousand General Motors workers walked out at midnight Sunday evening. The shutdown of 35 manufacturing facilities in Michigan, Ohio, Indiana, Kentucky, Missouri, Tennessee and New York will cost GM as much as $400 million in lost production each day.
Despite its frantic efforts to avoid a strike, the leaders of the United Auto Workers (UAW)—who have been exposed as criminally corrupt agents of the auto companies—concluded that they were not in a position to prevent a mass walkout.
The announcement of the strike was delivered at a press conference by UAW Vice President Terry Dittes. Demoralized and frightened, Dittes spoke as if he were attending a funeral.
Just the day before, the UAW had instructed its members to cross the picket lines of janitorial workers belonging to the same union. The UAW has refused to call out workers employed at Ford and Fiat-Chrysler, seeking as best they can to avoid mobilizing the full strength of autoworkers.
Workers at a rally against auto plant closures in Detroit earlier this year
The shutdown of General Motors is a major escalation of the class struggle in the United States and internationally. The powerful social movement that began last year with teachers is expanding into the industrial working class. The decades-long suppression of the class struggle—ruthlessly enforced by an alliance of trade unions, corporations and the government—is breaking down.
As workers begin this fight, they must survey the battlefield and develop a strategy based on an understanding of who are their allies and who are their enemies.
Workers are confronting General Motors, the symbol of the power of American capitalism, with a market capitalization of $55 billion. But GM is itself part of a globally-integrated auto industry, involving the labor of millions of workers all over the world.
Every struggle by workers has a political dimension, but in this case the politics are especially clear. The auto industry has, for forty years, been the target of efforts by Democratic and Republican administrations to expand corporate profits at the expense of the working class.
Forty years ago, in 1979, the Democratic administration of Jimmy Carter and a Democratic Party-controlled Congress insisted that the so-called bailout of Chrysler required massive concessions by workers and the closure of factories. This was followed soon after by the Republican Reagan administration’s firing of PATCO air traffic controllers, which launched a wholesale assault on the entire working class.
In 2008, the Obama administration insisted on halving the wages of new hires as part of its restructuring of the auto industry. The mass layoffs, plant closures and pay cuts imposed under Obama led to record profits for the automakers.
In the four decades of social counter-revolution, GM, Ford and Chrysler have slashed 600,000 auto jobs, with only 158,000 jobs left. The pay of a newly hired auto worker has fallen by half.
The expansion of corporate profits through the impoverishment of workers is the basic law of the capitalist system. Profit does not fall like manna from heaven: it is extracted at the point of production from the working class. The value created by workers through the labor process is distributed to the capitalists who exploit them.
The unjust and exploitative character of this system is demonstrated by the salaries of the auto executives and the billions of dollars disbursed to investors in the form of profit.
GM CEO Mary Barra, with her annual salary of $21.87 million, makes in a day twice what a new autoworker earns in a year. GM posted a profit of $11.8 billion last year. It has spent more than $10 billion on stock buybacks since 2015.
The claim that GM does not have the money to meet workers’ demands for a restoration of their pay and benefits should be dismissed with contempt.
Even as workers are fighting the corporations, the government and the capitalist system as a whole, their most determined enemy is the organization that claims to represent them—the bribed and corrupted United Auto Workers.
The UAW’s endless betrayals of workers’ interests has culminated in the cesspool of corruption that has engulfed the entire leadership, bribed to the tune of millions of dollars from management.
Everything workers are now fighting against, from plant closures to starvation wages and the multi-tier wage and benefit system, is the product of the concessions enforced by the UAW. To believe that this will now change is to indulge in the most dangerous illusions.
While the UAW officials were shown to have spent millions of dollars in workers’ money on golf games, cigars, whiskey and prostitutes, the UAW has announced that workers will get a miserable $250 per week in strike pay—and this only after the first full week of a strike.
GM workers face many enemies, but they also have powerful allies.
Autoworkers enjoy overwhelming support and sympathy from the working population in America. The exploitative conditions that autoworkers are fighting against are those felt by millions of workers throughout the country, who have had their pay cut and benefits destroyed, and who are treated worse than the machines they operate.
Workers at GM must call on their brothers and sisters at Ford and Fiat Chrysler to join their strike, in order to shut down the entire US auto industry and bring maximum economic and political pressure to bear on the auto bosses.
Just as importantly, workers must appeal for support from workers and youth throughout the country and around the world—support that they will readily receive.
The GM walkout is the latest stage in a global strike wave. The strike by US autoworkers is unfolding in the context of an international movement of the working class. Just last week, 8,000 GM workers went on strike in Korea, and French transit workers shut down the subways of Paris. Over the past year, auto workers in India and Mexico have waged powerful strikes. In France, Puerto Rico and Hong Kong, workers and youth have been involved in mass demonstrations in defense of their social and democratic rights.
The struggle can only succeed if it is taken out of the control of the UAW traitors. Workers must elect rank-and-file committees to organize and expand the strike.
These committees must demand:
● A 40 percent increase in pay to begin recovering decades of wages lost due to illegitimate concessions by the corrupt UAW and the corporations that bribed them.
● End the tier system!Equality in the workplace! All workers, including part-time and contract workers, must immediately be brought up to top pay and benefits.
● Restore jobs! Reopen Lordstown and other closed plants and rehire all laid-off and victimized workers. Stop all plant closings and layoffs!
● Honor the retirees! Reverse all cuts in retiree health care and pensions.
● Democracy in the factory! For workers’ control over production, line speed and safety.
● $750 per week in strike pay! The UAW, together with the AFL-CIO, controls billions of dollars in assets, which they use to fund junkets and pay six-figure salaries to thousands of executives. These resources, plundered from dues and retirement plans, must now be disbursed!
In this struggle, the Socialist Equality Party, which produces the Autoworker Newsletter and helps publish the World Socialist Web Site, pledges its full support to the workers.
The Socialist Equality Party will do everything it can to build a new militant socialist leadership in the working class. It will provide workers with the information they need to assist in the organization of their struggle, to rally support throughout the country and internationally.
We call on workers to attend our upcoming online forum, which last week drew together more than 300 workers, to discuss the strategic issues that autoworkers face as they conduct this great and critical struggle.
The WSWS Editorial Board
We need your support
The WSWS recently published its 75,000th article. Become a monthly donor today and keep up this vital work.It only takes a minute. Thank you.
