Autoblog

The GM strike lasted less than 40 hours, not even two full days. For UAW president Ron Gettelfinger, however, it was just enough time to secure for his members the concessions he wanted. So which side blinked after 40 hours of staring the other down? It's tough to tell, but the UAW's main sticking point was job security, and it was looking for a guarantee that production for new models wouldn't be moved outside the United States. This is the issue that initiated the strike, and it appears that GM did change its mind and offer the UAW some type of broad job guarantee for the duration of this 4-year contract. Here's how the whole deal breaks down as we see it.

UAW got:

• An independent retiree health care trust that will be funded with enough money from GM to remain solvent for 80 years
• Undisclosed job guarantees that we expect includes a promise of investment in particular U.S. plants in preparation for production of new models
• GM will hire up to 5,000 temporary workers as full-time employees
• Signing bonuses of an undisclosed amount for all UAW members who sign the contract
• Wage increases of 3% in first year, 4% in second and 3% in third

GM got:

• $50 billion in health care liability off its back after a large one-time payout into independent retiree health care trust
• Two-tier wage structure, as those 5,000 new hires who were previously temp will be brought in at their current wage of $18/hour, rather than the $28/hour current full-timers earn
• Undisclosed revisions in the Jobs Bank program that continues to pay laid-off employees
• Reduction in labor cost to produce vehicles, though might not be realized right away

Next up for the UAW is either Ford Motor Company or Chrysler LLC. It has yet to decide which of the remaining domestics it will negotiate with next, but we're anxious to see if one contract already in place will make the next two go smoother.

[Source: Automotive News, sub. req'd]

Investors and industry pundits don't believe the UAW strike will last long, proving their belief with a slight drop of $0.20 in GM's stock price. Widespread belief is that GM could handle a two-week halt in production without devastation to its balance sheet and recovery plan. GM's got three months of inventory on hand, and GM had planned to cut production by 10-percent in Q4 anyway. The only hitch could be with popular vehicles like the Enclave and Acadia, which typically spend just two weeks on dealer lots.

It's estimated that Toyota, Honda, and Nissan have a $1,000 advantage per vehicle, and one commenter said that analysts are happy to see GM take a hard stance in light of the necessity of gaining on the Japanese three. Other analysts were, of course, varied in their take on the impact: while two weeks is seen as acceptable, according to one analyst, a four-week stoppage would cost GM $4 billion and send GM into bankruptcy. S&P, though, thinks GM has $32 billion in cash, and Moody's thinks the company has enough to last four weeks.

The UAW doesn't want to look like it's shooting itself in the foot and GM in the head, but it does have its active members and retirees to worry about. GM, though, with a more global operation, has a much better position in terms of time, patience, and clout to wait for the deal it wants. As David Cole with the Center for Automotive Research said, "It's unimaginable that it would be a long strike -- absolutely unimaginable. The stakes are so high."

[Source: Detroit News]

We had the TV on at 11:00AM EST expecting to see CNN, MSNBC and Fox News providing up to the minute coverage of the UAW's potential strike in the wake of failed contract negotiations with General Motors. Only CNN is covering the strike at this point, and it's 11:15 now. CNN, however, has been confused as to whether a strike is actually happening. They've been running live footage of vehicles streaming out of GM's Warren plant while passing picketers waving signs that read "UAW on Strike". Looks like a strike to us. The Detroit News, however, is not so confused, and is reporting that 73,000 workers at 59 plants were told yesterday that if they didn't hear otherwise by 11AM EST, they were to walk off the job. Word never came that an agreement had been reached, so GM's entire UAW workforce is walking off the job right now. The question remaining now is clear: how long can GM last?

We'll bring you more updates throughout the day as these historical events that could radically alter the automotive industry unfold.

UPDATE 8: The International Brotherhood of Teamsters announced it will honor the UAW's picket lines and not cross them to deliver parts and cars to various plants.

UPDATE 7: Is it a token strike? Some analysts surmise that the UAW is holding a token strike to (ironically) obtain job security from GM, which the automaker, of course, can't guarantee anyway until this contract is finalized. That's a nasty Catch 22.

UPDATE 6: Canadian Auto Workers president Buzz Hargrove will respond to news of the strike at 1:30PM EST. We'll let you know what he says. Read about his pessimistic response here.

UPDATE 5: GM has released an official statement (read in entirety after jump) in which it says "We are disappointed in the UAW's decision to call a national strike." Understatement of the Year nominee, right there, folks.

UPDATE 4: Kickingtires.net reports that GM has 67 days of inventory left at its current rate of sales. Popular vehicles like the Buick Enclave, however, have only a 26-day supply left.

UPDATE 3: Today would be a good day to have forums, but since we don't have them (yet), check out the forums at the Detroit Free Press where six pages of heated discussion are already underway.

UPDATE 2: Watch GM's stock price throughout the day over at BloggingStocks (GM). As of 11:21AM EST, it is up 1.01 (+2.89%) to 35.95.

UPDATE: Automotive News has its report up now, reiterating that UAW president Ron Gettelfinger said he was "shocked and disappointed" by GM's hard line stance during negotiations.