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UAW Gamble Targets Outsourcing, Health Care

RENEE MONTAGNE, Host:

It's MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.

Thousands of autoworkers are back on picket lines today, one day after the United Auto Workers called a nationwide strike against General Motors.

RON GETTELFINGER: And this is nothing that we wanted. Nobody wins in a strike, but there comes a point in time where somebody can push you off a cliff. And that's exactly what happened here.

MONTAGNE: That's UAW president Ron Gettelfinger speaking to reporters after talks broke down yesterday morning. The union is taking a bold gamble in striking against General Motors. It's betting it can get stronger contract by shutting down an already weakened company. If the walkout does drag on, it could take a big toll on both sides.

NPR's Frank Langfitt reports from Detroit.

FRANK LANGFITT: GM and the union have a lot to lose in this strike. For the company, a lingering shutdown could cause it huge sums and further road its U.S. market share.

Harley Shaiken is a labor expert at the University of California at Berkeley. He says that although, GM has a lot of unsold vehicles, the work stoppage could hurt newer and more popular models that are critical to the company's turnaround plans.

HARLEY SHAIKEN: They are loosing money every day the strike takes place.

LANGFITT: But the longer the union stays on the picket lines, the more it could encourage GM to ship jobs abroad.

Dave Cole is a leading auto analyst in Ann Arbor, Michigan.

DAVE COLE: They are globally integrated like they have never been before, and so they have an option whether to invest here in the United States or invest in other places. And I think they have basically said that if we have a contract that enables us to be competitive, we will invest. If not, we'll disinvest in the U.S. and use our money where we think we can get a better return.

LANGFITT: So far, the contract negotiations are revolved around a tradeoff. The company has been asking the union to take over responsibility for crippling health care obligations. In exchange, the union wants the company to guarantee jobs and new products in the U.S. Union president Ron Gettelfinger says he decided a strike when GM failed to make those guarantees.

Job loss is a real issue for autoworkers. In the last several years, GM has cut cost by paying 30,000 workers to leave. And many union members complain about continued offshoring. Anthony Adams is a 55-year-old worker in a GM engine plant outside Detroit.

ANTHONY ADAMS: A matter of fact, the plant that I'm working at now, the engine plant, they've shipped out a whole department to Mexico, and they've shipped all it out. They came back about two months later and got the rest of the machines.

LANGFITT: Like his fellow union members, he sees the exporting of jobs as an overwhelming trend that's hard to reverse.

ADAMS: They're outsourcing a lot of things. There's nothing we can do about it.

LANGFITT: But Cole, the auto analyst, says that GM might be willing to keep jobs in the U.S. or new product lines. That's if the union could help it compete on cost with foreign firms like Toyota and Honda. Consider, GM owes nearly 270,000 retirees more than $50 billion in health care. Meanwhile, Toyota has only about 300 retirees in the United States. Cole says savings for GM could translate into more jobs for the union.

COLE: There's a very interesting tradeoff that exists between cost, particularly health care cost, and a new product - and investment in the new products. And I think this has dramatically seen if you look at - if General Motors had Toyota's health care cost in the U.S. The difference between that health care cost is equal to five new products a year every year by General Motors. That's how large that difference is.

LANGFITT: Cole says the stakes surrounding this contract are huge not only for GM but also for Ford and Chrysler where negotiations will follow.

COLE: This is not a healthy industry. And the absent - a major restructuring of the contract, one or two of these companies could fail.

LANGFITT: Harley Shaiken, the labor scholar, says the stakes for the union are equally high. The autoworkers need commitments for more jobs and new vehicle lines in the U.S. to halt the erosion of their membership.

SHAIKEN: So for the union, guarantees for future investment are pivotal to ensuring the sacrifices it makes today will pay off tomorrow.

LANGFITT: Although, the workers remain out on strike, the union in GM are continuing to talk. Many observers see that as a sign that both sides want to end the walkout as soon as they can.

Frank Langfitt, NPR News, Detroit. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Frank Langfitt is NPR's London correspondent. He covers the UK and Ireland, as well as stories elsewhere in Europe.
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