UAW strike could result in local layoffs

Kent County

WYOMING, Mich. (WOOD) — Nearly 50,000 hourly workers walked off the job Sunday night amid a contract dispute between the United Auto Workers and General Motors.

About 800 of the striking UAW members work at GM’s Grand Rapids Operations in Wyoming. The plant builds axles and other components for GM vehicles.

“If we don’t see a lot of movement in the next 48 hours, then we might be pulling in for a long haul,” Paul Isely, the associate dean of undergraduate programs at Grand Valley State University’s Seidman College of Business, said Monday.

By late in the day, there were already signs of a ripple effect. Grand Rapids auto supplier Lacks Enterprises Human Resources Director Jim Green told News 8 that if there’s not a quick settlement, the company may have to lay off workers, though a final decision on that won’t come until the end of the week. Lacks, whose largest customer is GM, is already asking for volunteers to avoid forced layoffs.

Still, Isely said, local suppliers have diversified what they’re selling and who they’re selling it to, so most are better suited to weather this kind of storm than they were during the 2008 recession.

“That really helps them,” Isely said. “It helps their product mix. It helps them from having to lay off as many people when things start to slow down.”

There are about 8 billion reasons the UAW targeted GM for a strike over Ford and Fiat Chrysler at the end of a four-year contract. GM made about $8 billion last year. Now, UAW members want pay raises that guard against economic downturns. The automaker wants to continue lump sum bonus checks tied to profits, avoiding guaranteed fixed costs.

The union also wants GM to reopen four shuttered plants with new product lines. The automaker has reportedly made some concessions in that area at the bargaining table.

GM wants to bring labor costs more in line with what it claims foreign competitors pay. According to published reports, GM pays workers an average of $63 per hour compared to $50 an hour by foreign automakers.

Health care costs are another issue. UAW members pay about 4% of their health care costs. The national average for other large firms is about 34%.

Isely said one issue motivating strikers are concessions made by workers during the recession, when GM was forced into bankruptcy.

“Part of what’s here is a continual feeling that the workers gave back during the downturn and they should be rewarded for that,” Isely said.

Isely said the timing of the contract negotiations may not play in the union’s favor.

“We’re seeing a slowdown in automotive right now, so that’s going to make it harder for GM to give them as much as the UAW is hoping for,” Isely said.

But GM is also fighting Ford and Chrysler’s Ram truck division for a bigger share of the very profitable truck segment, with the launch of new full-size pickup, something that could help the UAW’s cause.

“GM is going to be more likely to want to get out of this quickly so they can continue to produce these pickup trucks,” Isely said.

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