Unionised workers at General Motors walked off the job yesterday after the world's largest car maker missed a deadline to conclude vital new contract negotiations.
Optimism that a deal on pay, conditions and healthcare benefits was near evaporated and the United Auto Workers began their first nationwide pay strike in more than 20 years.
Protracted industrial action threatens to cripple the car maker at a time when it is struggling to return its US operations to profitability and claw back the market share it is losing to Japanese rivals. Production of more than 12,000 vehicles a day would be halted by the strike, with overseas factories feeling the effects through a lack of parts by next week.
The UAW's president, Ron Gettelfinger, triggered the strike after talks failed to complete by a union deadline of mid-morning yesterday. GM "walked up to the deadline like they didn't really care", he said. However, both sides returned immediately to the negotiating table and it was not clear whether Mr Gettelfinger's harsh words reflected genuine frustration at progress or were aimed only at ensuring support for the strike.
In a press conference carried live by several television stations in GM's native Detroit, the union leader said issues such as job security and factory investment remained unresolved. "We were very disappointed when we got to this round of negotiations that it was a one-way set of negotiations – General Motors' way, at the expense of the workers."
There had been optimism earlier yesterday because the question of healthcare liabilities appeared over the weekend to have been settled. GM is expected to create a $50bn (£25bn) fund to cover the healthcare costs of its current and retired workers, which would then be separated from the company and managed by the UAW, in one stroke freeing GM of liabilities it says are hampering its ability to compete with lower-cost rivals.Reuse content