GM appeals directly to employees as strike losses pile up

By Ben Klayman and David Shepardson

DETROIT/WASHINGTON (Reuters) – General Motors Co took the unusual step of appealing directly to employees in a blog post on Friday that laid out the terms of the automaker’s latest offer aimed at ending a month-long strike.

While emphasizing GM’s commitment to the collective bargaining process, the letter, signed by Gerald Johnson, executive vice-president for global manufacturing, circumvents United Auto Workers (UAW) leadership and points to frustration at a lack of progress on ending a conflict that has already cost the company more than $1 billion.

The UAW strike began on Sept. 16, with the union’s 48,000 members seeking higher pay, greater job security, a bigger share of profits and protection of healthcare benefits. Credit Suisse estimated the loss could hit about $1.5 billion.

As part of its revised offer, GM boosted the amount it plans to invest in the United States to about $9 billion from its previous offer of $7 billion, a source familiar with the offer said.

Of the new total, $7.7 billion would be invested directly in GM plants, with the rest going to joint ventures including a potential battery plant near the Lordstown, Ohio, factory that has been idled, the source said.

GM stock was up 2.2 percent in midday trading.

The company said the offer also includes increased compensation through wages and one-time payments, preserving industry-leading healthcare benefits without increasing workers’ costs, enhanced profit sharing with unlimited upside and a higher ratification bonus than the $8,000 previously offered.

For temporary workers, GM said its offer would create a path to permanent employment and include a ratification bonus.

“The strike has been hard on you, your families, our communities, the company, our suppliers and dealers,” GM’s letter read, saying the latest offer increased compensation and promised a path to full-time jobs for temporary workers.

“We have advised the union that it’s critical that we get back to producing quality vehicles for our customers. … Our offer builds on the winning formula we have all benefited from over the past several years.”

A UAW spokesman declined to comment on the new offer.

In a Thursday letter to UAW leaders, GM urged the union to agree to around-the-clock negotiations, while the union insisted in its own letter on dealing with five specific issues first before it responded to the broader proposal made to union negotiators Monday.

GM Chief Executive Officer Mary Barra met Wednesday with UAW President Gary Jones and lead GM negotiator Terry Dittes to urge a faster response by the union to the company’s last offer.

One of the five issues the committees are discussing is the fate of four U.S. factories that GM has indicated could close; another is future technological changes to production, according to the UAW letter. Dittes said he did not know when the issues would be resolved, suggesting a final deal may not be close.

UAW workers are concerned that as GM shifts to more electric vehicles it will require fewer workers, and that workers in battery production plants may earn less than those at existing transmission plants.

Reuters previously reported GM told the UAW it could build a new battery plant near the now-shuttered Lordstown factory, and assemble an electric truck at its Detroit Hamtramck plant.

Moody’s said in a Friday report that GM must maintain its flexibility under any new deal to build electric and self-driving vehicles without its fixed costs rising further. It said GM’s annual costs in wages and benefits are more than $1 billion higher than foreign automakers operating U.S. plants.

“It is critical for GM that any new UAW contract not allow an even wider differential,” Moody’s said.

“We expect that the long-term strategic benefits of obtaining a UAW contract … will outweigh the costs of enduring a protracted strike that might last into November,” Moody’s added.

On Sunday, the UAW said the talks took a “turn for the worse” and on Tuesday the union urged GM to boost U.S. vehicle production. Union workers are angry about production of trucks and sport-utility vehicles in Mexico.

The UAW’s membership is largely in the Midwest, in states that could be critical to both sides in the 2020 presidential election, so the strike has drawn the attention of Republican President Donald Trump, his rivals seeking the Democratic nomination, and U.S. lawmakers. They have urged GM to build more vehicles in the United States and shift work from Mexico.

(Additional reporting by Ankit Ajmera in Bengaluru; editing by Patrick Graham, Saumyadeb Chakrabarty and David Gregorio)

Workers picket GM plants as UAW contract talks resume

By Nick Carey and Ben Klayman

DETROIT (Reuters) – Negotiators for General Motors Co and the United Auto Workers were continuing talks Monday afternoon to resolve a strike that shut down the automaker’s highly profitable U.S. operations.

The UAW on Sunday launched the first company-wide strike at GM in 12 years, saying negotiations toward a new national agreement covering about 48,000 hourly workers had hit an impasse.

Workers took to picket lines outside GM factories, waving signs declaring “UAW On Strike.” During the walkout, UAW members will get $250 a week from the union’s strike fund.

The UAW confirmed Monday morning that talks had resumed and GM said the talks were continuing more than five hours later. Lost production could cost GM up to $50 million a day in pretax profit, RBC Capital Markets estimated in a note Monday. GM could make up the lost production with overtime work after a settlement.

Moody’s Investors Service said in a note Monday the critical issue is whether GM will “secure the operating flexibility necessary” to address challenges including higher hourly costs than foreign automakers, a potential severe downturn in U.S. auto sales and the need for automakers “to begin transitioning to the production of more electric vehicles that will likely require fewer workers to assemble.”

Company and union officials say there are a number of issues to be resolved and that no immediate resolution on Monday is expected.

Contract talks with GM have been overshadowed by a mushrooming U.S. federal corruption probe into top union officials. The investigation has raised questions about UAW President Gary Jones, who a source said was an unnamed official cited in a searing federal complaint last week detailing alleged embezzlement by union leaders.

The strike quickly became a political issue, as both U.S. President Donald Trump and Democrats who want to unseat him in 2020 weighed in. Trump and Democrats see the votes of UAW members in the Midwest as critical to victory.

Trump on Monday told reporters he hoped the strike was a short one after taking to Twitter to urge the UAW and GM to “get together and make a deal!” GM spokesman Tony Cervone said the automaker “couldn’t agree more” with Trump’s call.

GM Chief Executive Mary Barra met with Trump ahead of the strike deadline. Trump has attacked GM for Barra’s decision to stop building small cars at an assembly plant in Lordstown, Ohio. The state is pivotal to Trump’s re-election.

The union wants to stop GM from closing Lordstown and an assembly plant in Detroit. The UAW has said workers deserve higher pay after years of record profits for GM in North America.

GM argues the plant shutdowns are necessary responses to market shifts, and that UAW wages and benefits are expensive compared with competing non-union auto plants in southern U.S. states.

GM initially insisted the UAW dramatically boost its share of healthcare costs but largely dropped that demand, union and company officials said.

In a statement Sunday, GM outlined its offer to the union, saying the package included solutions for the Michigan and Ohio assembly plants currently lacking products, $7 billion in U.S. investment and a signing bonus of $8,000 per worker.

A person familiar with GM’s offer said the company could produce a future electric pickup truck at the Detroit-Hamtramck plant that now has no future assignment.

GM could also build an electric vehicle battery plant in Lordstown, and go through with the proposed sale of the plant to a group affiliated with electric vehicle start-up Workhorse Group Inc.

A new battery plant could give some UAW workers at Lordstown the chance to remain with GM.

The UAW’s top negotiator at GM said the company’s proposal came just two hours before the strike deadline and laid the blame for the strike on the automaker.

“Had we received this proposal earlier in the process, it may have been possible to reach a tentative agreement and avoid a strike,” UAW Vice President Terry Dittes wrote in a letter to GM on Sunday, according to a copy viewed by Reuters.

GM shares closed down 4.3% on Monday.

ECONOMY COULD FEEL IMPACT

A strike will very quickly shut down GM’s operations across North America and could hurt the broader U.S. economy. Prolonged industrial action would also cause hardship for GM hourly workers on greatly reduced strike pay. Suppliers of parts and services to GM’s U.S. operations could also suffer from a long shutdown, as could dealers and consumers.

GM’s workers last went out on a brief two-day strike in 2007 during contract talks. A more painful strike occurred in Flint, Michigan, in 1998, lasting 54 days and costing the No. 1 U.S. automaker more than $2 billion.

The UAW has framed the plant closures as a betrayal of workers who made concessions in 2009 to help GM through its government-led bankruptcy.

Some of those concessions are now matters of disagreement. The union wants to limit GM’s use of temporary workers in its plants, and narrow the pay gap between new hires and veteran workers.

The strike will test both the union and GM at a time when the U.S. auto industry is facing slowing sales and rising costs associated with launching electric vehicles and curbing emissions.

The impact of the strike on dealers and car shoppers will be delayed. GM started off the strike with healthy levels of inventory of some its key, high-margin vehicles.

A prolonged strike could delay the planned introduction next spring of GM’s redesigned full-size SUVs in Arlington, Texas. Among the company’s most profitable vehicles, they include the Cadillac Escalade, the GMC Yukon and the Chevrolet Tahoe and Suburban.

(Reporting by Nick Carey, David Shepardson, Ben Klayman and Joseph White; Writing by Nick Carey and Joseph White; Editing by Andrea Ricci)

GM will rehire 500 Michigan workers slated for layoffs

The GM logo is seen in Warren, Michigan, U.S. on October 26, 2015. REUTERS/Rebecca Cook/File Photo

By David Shepardson

WASHINGTON (Reuters) – General Motors Co plans next year to rehire 500 Michigan assembly plant workers who are to be laid off in May, citing increased demand for larger vehicles, the company said on Wednesday.

GM said last week it planned to lay off 1,100 workers in May at its Lansing Delta Township assembly plant in Michigan. The company is moving production of the GMC Acadia mid-size SUV to Spring Hill, Tennessee, from the factory, which will build just two models, the Chevrolet Traverse and Buick Enclave SUVs.

The company said that when it begins full production of the new versions of the two models in 2018, it would “bring back approximately 500 jobs to give the company flexibility to meet market demand.”

GM also said it would add 220 jobs at a plant in Romulus, Michigan, that is building 10-speed automatic transmissions, and it would retain 180 jobs by shifting Lansing workers to a Flint assembly plant to support pickup truck production.

The news comes as U.S. President Donald Trump is set to visit Michigan later on Wednesday to announce that his administration will reopen a review of fuel efficiency standards, a move that could help automakers sell more of their larger models. GM did not credit Trump with the decision to add jobs.

“We haven’t fundamentally changed any of our plans, but we continue to look for ways to improve our operations and find ways to help the country, grow jobs and support economic growth,” spokesman Pat Morrissey said.

He said Trump’s visit “gave us a positive venue to share good news for the state of Michigan – and specifically for our plants and people in Flint, Romulus and Lansing.”

The Detroit automaker in recent months has announced other U.S. job cuts and new investments. GM said in January it would invest another $1 billion in its U.S. factories.

Trump has urged GM and other automakers to build more cars in the United States as part of his pledge to boost the nation’s manufacturing jobs and discourage the industry from investing in Mexico.

GM said in November it would cut about 2,000 jobs when it ended the third shift at its Lordstown, Ohio, and Lansing Grand River plants in January. In December, it said it planned to cancel the second shift and cut nearly 1,300 jobs from its Detroit-Hamtramck assembly plant in March.

(Reporting by David Shepardson; Editing by Lisa Von Ahn)

General Motors says to invest additional $1 billion in U.S.

The GM logo is seen at the General Motors Warren Transmission Operations Plant i

By David Shepardson

WASHINGTON (Reuters) – General Motors Co confirmed on Tuesday it would invest an additional $1 billion in its U.S. factories in 2017 and will move some parts production from Mexico to the United States that was previously handled by a supplier.

The investments are in addition to the $2.9 billion the automaker announced last year, GM said.

GM and other automakers have been sharply criticized by U.S. President-elect Donald Trump for building vehicles in Mexico that are imported into the United States. Trump will be sworn in on Friday.

GM said the $1 billion investment will create or retain 1,500 jobs. The Detroit automaker said details of individual projects will be announced throughout the year.

GM also said it would begin work on bringing axle production for its next generation full-size pickup trucks, including work previously done in Mexico, to operations in Michigan, creating 450 U.S. jobs.

The part was previously built by American Axle Manufacturing Holdings Inc.  American Axle did not immediately respond to a request for comment.

GM spokeswoman Joanne Krell said the automaker planned to add 7,000 new U.S. jobs over the next two to three years. Krell said the decisions being in the announced “had been in the works for some time” but she added “the timing was good for us to share what we are doing.”

The 7,000 figure includes the 450 jobs on axle production, 1,500 jobs tied to the $1 billion announcement and more than 5,000 new jobs tied to engineering, GM Financial and advanced technology.

GM shares rose in early trading, up 0.7 percent or $0.26 per share to $37.60.

‘BIG STUFF’

Trump, who made bringing back manufacturing to the United States a large part of his successful election campaign, did not directly mention GM on Tuesday but touted recent automaker investments in the United States.

“With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back into our country and with the massive cost reductions I have negotiated on military purchases and more, I believe the people are seeing ‘big stuff,'” he wrote in a pair of tweets.

Trump has been inaccurate in describing some U.S. auto investments, wrongly saying last week that Fiat Chrysler was planning to build a new factory in the United States. The company announced it is investing $1 billion in two existing plants, adding 2,000 jobs.

On Jan. 3, Trump threatened to impose a “big border tax” on GM for making some of its Chevrolet Cruze compacts in Mexico – and he has extended that threat to German automakers like BMW and Toyota Motor Corp over building vehicles abroad.

GM also said an unnamed supplier has committed to make components for GM’s next-generation full size pick-up trucks in Michigan, moving 100 supplier jobs from Mexico to the United States.

But even as GM invests in U.S. plants, it has also been making job cuts. In recent months, the company announced plans to lay off about 3,300 employees at three factories.

It said in November it would cut about 2,000 jobs when it ends the third shift at its Lordstown, Ohio and Lansing, Michigan plants in January. Last month it said it planned to cancel the second shift and cut nearly 1,300 jobs from its Detroit-Hamtramck assembly plant in March.

GM’s “general plan is to build where we sell and we’re focused on what we’re doing in the United States,” Chief Executive Mary Barra said in an interview with Reuters on Monday.

Barra, who said she planned to attend Trump’s inauguration, said GM wants to work with him, adding, “I do believe we have more in common than we have areas that we aren’t aligned.”

(Reporting by David Shepardson in Washington and Ankit Ajmera in Bengaluru; Editing by Ted Kerr and Frances Kerry)

Wal-Mart to create 10,000 U.S. jobs in 2017

A general view shows a Wal-Mart store in Monterrey, Mexico,

(Reuters) – Wal-Mart Stores said it would create about 10,000 jobs in the United States this year, adding to its near 1.5 million workforce in the country, by opening or remodeling stores and investing in its e-commerce business.

The number of jobs being created is consistent with previous years, said Lorenzo Lopez, a spokesman for Wal-Mart, the largest U.S. retailer and private employer.

Several U.S. companies, particularly automakers, have announced plans to create jobs in the United States since the U.S. election victory of Donald Trump.

Trump, who takes office on Jan. 20, has repeatedly singled out and criticized companies across industries for not doing more to keep jobs in the United States.

General Motors Co will announce as early as Tuesday long-held plans to invest about $1 billion in its U.S. factories, a person briefed on the matter told Reuters.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D’Souza)

G.M. recalls 1.04 million newer trucks

The GM logo is seen at the General Motors Lansing Grand River Assembly Plan

WASHINGTON (Reuters) – General Motors Co said Friday it is recalling nearly 1.04 million newer pickup trucks for a seat belt flaw.

The largest U.S. automaker said the recall of the 2014-15 Chevrolet Silverado and GMC Sierra 1500 pickups is not linked to any crashes or injuries. GM said the cost of the large recall “is not expected to be significant and is covered within normal and customary warranty reserves.”

GM said the recall in the United States includes 895,232 vehicles and a stop-sale of approximately 3,000 new 2014 and 2015 model year pickups still on dealer lots.

GM said the recall was prompted by warranty data that showed the flexible steel cable that connects the seat belt to the vehicle can separate over time as a result of the driver repeatedly bending the cable when entering the seat.

Dealers will enlarge the side shield opening, install a bracket on the tensioner, and if necessary, replace the tensioner assembly.

The recall includes about 142,000 vehicles outside the United States.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Nick Zieminski)

Watchdog Group Says GM Misleading Government On Faulty Car Deaths

A watchdog group is calling out General Motors for under reporting the number of deaths connected to faulty ignition systems.

The Center for Auto Safety say that over 300 people have died in GM cars where the airbags did not deploy compared to the 12 that GM reported to federal investigators.

“Without rigorous analysis, it is pure speculation to attempt to draw any meaningful conclusions,” the company said in a statement refuting the group’s claim. “In contrast, research is underway at GM and the investigation of the ignition switch recall and the impact of the defective switch is ongoing.”

Still, the company has hired outside investigators to look into the recall.

The Center for Auto Safety is taking the National Highway Transportation Safety Administration to task, saying they were negligent in following up on reports of accidents attributed to the GM system.

“The only way NHTSA could not see a defect trend is if it closed its eyes,” said the group in a letter to the NHTSA.