General Motors and the United Auto Workers could be weeks away from inking a new collective bargaining agreement. Both sides are reportedly digging their heals in as nearly 49,000 hourly GM workers strike, leaving GM’s assembly plants to sit idle.
Most forecasters agree that GM is unlikely to cave soon, according to Automotive News. The automaker is reportedly losing $50 to $100 million per day during the strike, which is going on week two. Despite the hefty loss, GM is sitting on over $34 billion in cash, enough to weather a strike for weeks or even months without putting a huge dent in the bottom line.
GM added additional pressure to the UAW by swiftly offloading its 49,000 members from the company’s health care plan, shifting those responsibilities to the union. Starting next week the union will have to compensate members at a $250 per week rate and they’ve already started paying for the member’s health care. Both costs will come from the UAW emergency fund, which has about $700 million in it.
Pressure will also start mounting on GM from its supplier and dealership network. Nexteer Automotive has already warned it may have to implement temporary layoffs since GM isn’t buying parts right now. Dealerships may also start running out of parts, which could cripple their service departments.
Speaking of inventory, GM dealerships have a hefty national inventory of new vehicles to ride out the strike.
The current strike commenced after the UAW declined a last-minute offer from GM that included $7 billion of investment, 5,400 new employees and status quo health insurance benefits. The union says the proposal did not go far enough on most issues.