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Autoworkers in U.S. strike against GM in contract dispute

More than 49,000 members of the United Auto Workers walked off General Motors factory floors or set up picket lines early Monday as contract talks with the company deteriorated into a strike.

Thousands of members of the United Auto Workers walk off the job

General Motors assembly workers work on Chevrolet 2019 heavy-duty pickup trucks at the General Motors Flint Assembly Plant in Flint, Mich., last February. Thousands of GM workers in the U.S. are now on strike. (Rebecca Cook/Reuters)

More than 49,000 members of the United Auto Workers walked off General Motors factory floors or set up picket lines early Monday as contract talks with the company deteriorated into a strike.

Workers shut down 33 manufacturing plants in nine states across the U.S., as well as 22 parts distribution warehouses.

It wasn't clear how long the walkout would last, with the union saying GM has budged little in months of talks while GM said it made substantial offers including higher wages and factory investments.

It's the first national strike by the union since a two-day walkout in 2007 that had little impact on the company.

Night shift workers at an aluminum castings factory in Bedford, Ind., that makes transmission casings and other parts shut off their machines and headed for the exits, said Dave Green, a worker who transferred from the now-shuttered GM small-car factory in Lordstown, Ohio.

Green, a former local union president, said he agrees with the strike over wages, plant closures and other issues.

"If we don't fight now, when are we going to fight?" he asked. "This is not about us. It's about the future."

UAW Vice-President Terry Dittes, the union's top GM negotiator, said a strike is the union's last resort but is needed because both sides are far apart in negotiating a new four-year contract. The union, he said Saturday, does not take a strike lightly.

"We clearly understand the hardship that it may cause," he said. "We are standing up for fair wages, we are standing up for affordable quality health care, we are standing up for our share of the profits."

GM, however, said it offered pay raises and $7 billion worth of U.S. factory investments resulting in 5,400 new positions, a minority of which would be filled by existing employees. GM would not give a precise number. The company also said it offered higher profit sharing, "nationally leading" health benefits and an $8,000 payment to each worker upon ratification.

Talks to resume in morning

Because public statements from both sides conflict, it's hard to tell how long the strike will last, said Kristin Dziczek, vice-president of labour and industry at the Center for Automotive Research, an industry think tank. The length "depends on how far apart they really are and where the lines in the sand are drawn," she said.

Talks were scheduled to resume at 10 a.m. ET on Monday.

The union's contract with GM expired Saturday night, but pacts with the company's crosstown rivals, Ford and Fiat Chrysler, were extended indefinitely. The union has picked GM as its target company this year, and any deal it negotiates will be used as a template for the others. GM was picked because it's the most profitable of the three, and because its plans to close four U.S. factories have angered union members.

Terry Dittes, director of the UAW General Motors department, said that the fight is about wages, health care and profit-sharing. (Clarence Tabb Jr./The Associated Press)

On Sunday, about 200 plant-level leaders voted unanimously to strike against GM if no deal could be reached by Sunday night. Although talks were halted over the weekend, UAW spokesperson Brian Rothenberg said there was still dialogue.

It's unclear how many workers the two plants would employ. The closures, especially of the Ohio plant, have become issues in the 2020 presidential campaign. President Donald Trump has consistently criticized the company and demanded that Lordstown be reopened.

Rothenberg said UAW was striking for fair wages, affordable health care, profit sharing, job security and a path to permanent employment for temporary workers.

GM has factories in Michigan, Ohio, New York, Kentucky, Tennessee, Texas, Missouri, Indiana and Kansas.

A strike would bring to a halt GM's U.S. vehicle and parts production, and would likely stop the company from making vehicles in Canada and Mexico as well. That would mean fewer vehicles for consumers to choose from on dealer lots, and it would make it impossible to build specially ordered cars and trucks.

General Motors employees work on the chassis line as they build the frame, power train and suspension onto the truck's body last June at the Flint Assembly Plant in Flint, Mich. (Jake May/The Flint Journal/The Associated Press)

Analysts at Cox Automotive said GM has enough vehicles on dealer lots to last about 77 days at the current sales pace. That's well above the industry average of 61. But supplies of the Chevrolet Tahoe and Suburban large SUVs, which generate big money for the company, are well below the industry average.

The talks this year have been overshadowed by a growing federal corruption probe that snared a top union official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It's the same region that UAW President Gary Jones led before taking the union's top office last year. Jones himself has been touched by the investigation, leading some union members to call for him to step down, but he hasn't been charged.

Here are the main areas of disagreement:

— GM is making big money, $8 billion last year alone, and workers want a bigger slice. The union wants annual pay raises to guard against an economic downturn, but the company wants to pay lump sums tied to earnings. Automakers don't want higher fixed costs.

— The union also wants new products for the four factories slated to close. GM currently has too much U.S. factory capacity, especially to build slower-selling cars.

— The companies want to close the labour cost gap with workers at plants run by foreign automakers. GM pays $63 per hour in wages and benefits compared with $50 at the foreign-owned factories. GM's gap is the largest at $13 per hour, according to figures from the Center for Automotive Research.

— Union members have great health insurance plans and workers pay about 4 per cent of the cost. Employees at large firms nationwide pay about 34 per cent, according to the Kaiser Family Foundation. Automakers would like to cut costs.

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