UAW says GM labor talks 'have taken a turn for the worse'

Key Points
  • UAW Vice President Terry Dittes, in a letter Sunday to members, said the talks have "taken a turn for the worse."
  • GM, according to Dittes, submitted an inadequate counter offer to a Saturday night proposal from the union.
  • The two sides continue to negotiate Sunday, the 21st day of the union's strike against GM.
Striking United Auto Workers (UAW) walk the picket line in Hamtramck, Michigan, September 25, 2019.
Rebecca Cook | Reuters

DETROIT - The United Auto Workers' strike against General Motors could continue for the foreseeable future, as the union on Sunday said talks between the sides have "taken a turn for the worse."

UAW Vice President Terry Dittes, in a letter to members on Sunday, said the union plans to continue to negotiate but a Sunday morning proposal from GM was inadequate and "reverted back to their last rejected proposal and made little change." The offer, he said, was a counter proposal from an "extensive package" the union provided to the automaker on Saturday night.

"The Company's response did nothing to advance a whole host of issues that are important to you and your families!" Dittes wrote. "It did nothing to provide job security during the term of the Agreement."

GM, in response to the letter, said the company continues "to negotiate in good faith with very good proposals that benefit employees today and builds a stronger future for all of us. We are committed to continuing discussions around the clock to reach a resolution."

Both sides declined to comment on details of the discussions, however a source familiar with the talks told CNBC that one of the union's main concerns with the most recent offer was the company's lack of commitment to new products for U.S. plants. Prior to the talks, GM was expected to attempt to negotiate the closure of up to four domestic plants, including large assembly plants in Ohio and Michigan, to address overcapacity.

The talks, according to the source, have "cooled considerably" from the progress that was being made in recent days, including Friday, when the union publicly said "good progress" was being made on several issues. While the UAW's rejection of GM's most recent offer could be a setback, the talks continue and neither side has walked away from the table —a positive sign for the negotiations overall.

Dittes, in a separate Sunday letter released by the union to GM, said the company "didn't even have a professional courtesy" to explain why the UAW's most recent proposal was rejected: "We expect the Company to respond and discuss the package proposal we presented yesterday," he wrote. "The law and basic decency require no less."

UAW workers miss first paycheck as protests continue
UAW workers miss first paycheck as protests continue

About 48,000 UAW members with GM have been on strike and picketing outside the automaker's U.S. facilities since Sept. 16. The work stoppage has caused a ripple-effect throughout the automaker's North American operations, causing thousands of additional layoffs. It also has contributed to a double-digit decline GM shares during the past three weeks.

GM's stock closed Friday at $34.91, down 10% since the Friday before the strike began. Shares of the Detroit automaker are still up 4.4% for the year.

Wall Street analysts estimate GM is losing roughly $50 million to $100 million per day in lost production. J.P. Morgan, in a note to investors Monday, estimated the UAW's strike cost GM more than $1 billion during the third quarter.

The union's most recent proposal, according to Dittes, "addressed issues of wages, signing bonus, job security, pensions, skilled trades, profit sharing, transfer rights; just to name a few."

The Sunday letter follows a message from Dittes on Friday that cited "good progress," however cautioned outstanding issues such as health care and a path for temporary workers to become permanent employees remained.

GM's Sunday deal is the most recent in a back-and-forth between the UAW and automaker. An offer prior to a Sept. 14 contract deadline and the union calling for a strike included more than $7 billion in investments and thousands of new jobs from GM over the next four years. Members also would "retain nationally-leading health care benefits" under that deal. It's unclear if those remain part of recent deals between the two sides.