Strike action | GM faces huge strikes as worker pay dispute persists

GM faces huge strikes as worker pay dispute persists

Car workers in the United States have expanded their strike once again, just hours after General Motors (GM) warned investors that the costs associated with the ongoing industrial action remained unpredictable.

The strike, initiated by the United Auto Workers (UAW) union in September, has now entered its sixth week and is impacting the automotive industry on a significant scale.

GM, one of the major players in the US automotive sector, announced that the ongoing industrial action is expected to cost the company approximately $200 million each week.

This announcement comes after GM had already reported that the strike had cost the company around $800million to date. Executives at the company have been unable to predict when this protracted dispute over pay and benefits will finally come to an end.

The strike, which has already been significantly expanded since its inception, now involves more than 45,000 workers, making it the first in the history of the UAW to simultaneously target all three major automotive companies: GM, Ford, and Stellantis.

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The latest development has seen the strike extended to a GM assembly plant in Texas, employing approximately 5,000 union members and responsible for the production of popular vehicles like the Chevy Tahoe SUV.

GM has expressed its disappointment in response to the strike's escalation, describing it as "unnecessary and irresponsible."

The company stated that it is "harming our team members who are sacrificing their livelihoods and having negative ripple effects on our dealers, suppliers, and the communities that rely on us."

GM's executives have been taking measures to alleviate the situation by offering a "record" labor contract, which includes a 23% increase in pay, the reinstatement of pay adjustments tied to inflation, and other benefits.

This proposed contract, if accepted, would result in an average worker's salary reaching about $84,000 by the end of the four-year agreement.

GM CEO Mary Barra, who has faced criticism from the union for her pay package of over $28million last year, addressed concerns about the impact of higher labor costs.

She emphasized that such cost increases have been inevitable due to inflation and other factors in the post-COVID economic landscape. Barra assured that the proposed contract "rewards our team members but does not put our company and their jobs at risk."

The UAW, representing over 140,000 workers at GM, Ford, and Stellantis, has reported that negotiations are making progress but affirmed that there are still unresolved issues. UAW boss Shawn Fain encouraged workers to remain steadfast, stating, "We've got cards left to play and they've got money left to spend."

The ongoing strike has taken a toll on GM's profits, with the company reporting $3.1billion in earnings for the July-to-September period, down approximately seven per cent from the same quarter the previous year. Despite this decline, GM's revenue managed to increase by more than 5% year-on-year, reaching $44.1billion.

In response to the challenging financial situation, GM has initiated cost-cutting measures aimed at reducing expenditures by $2billion.

Additionally, the company has postponed the opening of some of its manufacturing plants, partly due to slower-than-expected sales of electric vehicles. Nonetheless, GM remains committed to its goal of producing one million electric cars in the United States by 2025.

As the strike persists and costs continue to mount, the future remains uncertain for GM, its workers, and the broader automotive industry.

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