G.M. and U.A.W. Engage in Fierce Negotiations Amidst Strikes at Parts Factories

The United Automobile Workers union and General Motors are locked in a heated dispute over the auto maker's investments in the United States, with the union accusing G.M. of pursuing a strategy that prioritizes profits over jobs and the company countering that it has committed to investing billions of dollars in American factories. The standoff has resulted in crippling strikes at parts factories in Flint, Mich., and has left the union threatening to prolong the strike into mid-August. As the negotiations between the two parties continue, the focus is on the level of investments G.M. has committed to making in the United States, with the company highlighting its plans to invest $21 billion in the country by 2001, while the union points to the fact that this figure works out to an average of $4.2 billion a year, which is lower than the company's annual investments abroad.

Key Takeaways:

• The United Automobile Workers union is accusing General Motors of pursuing an "America Last" strategy by prioritizing investments in developing countries over the United States.
• G.M. has publicized plans to invest $21 billion in the United States by 2001, but the company's financial statements and projections show that its investments in the United States will not increase in coming years and may actually decline.
• The company's annual investments overseas are rising, with G.M. building new assembly plants in Argentina, Brazil, Poland, Thailand, and China.
• G.M. officials have consistently refused to provide figures for the company's future investments overseas, but they totaled $2.45 billion last year and are expected to grow.
• The union is demanding that G.M. follow through on a promise to invest another $180 million in one of the struck parts factories in Flint, Mich., in exchange for workers' agreement to change work rules.
• G.M. has chosen to focus on investment rather than jobs as the measure of commitment to the United States, but its investments in the United States are mostly in costly operations like new assembly plant equipment, which preserve a few high-paying jobs for highly skilled workers.
• The strike has idled 122,400 G.M. workers across North America, while outside suppliers have also laid off thousands of workers temporarily.
• The union is preparing members for a protracted struggle, with Stephen P. Yokich, the U.A.W. president, warning that the strike could last until mid-August if a deal is not reached this week.
• G.M. needs to begin mass production of its 1999 models by then and will be under considerable pressure to compromise, as its factories have long been scheduled to close at the end of this week for the company's annual two-week summer vacation.

Statistics:

• G.M. plans to invest $21 billion in the United States by 2001, averaging $4.2 billion per year.
• The company's annual investments overseas are rising, with G.M. building new assembly plants in Argentina, Brazil, Poland, Thailand, and China.
• G.M.'s investments in the United States are mostly in costly operations like new assembly plant equipment, which preserve a few high-paying jobs for highly skilled workers.
• The strike has idled 122,400 G.M. workers across North America, while outside suppliers have also laid off thousands of workers temporarily.
• G.M.'s annual report shows that the company invested $5.39 billion last year in North America automotive operations and $5.18 billion in 1996.
• G.M. has refused to provide exact figures for the amount invested annually in Mexico and Canada, but these investments are relatively small.

Sources:

• "G.M. and U.A.W. Engage in Fierce Negotiations Amidst Strikes at Parts Factories" by an unnamed author, The New York Times, June 1998.
• General Motors annual report, 1997.
• United Automobile Workers union convention in Las Vegas, Nev., June 1998.
• Reuters, June 1998.