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General Motors just made an unusual power play that experts see as clear punishment for the auto workers' strike — and an effort to potentially kill the country’s largest strike since 2007.
Earlier this week, General Motors decided to shift the costs of providing health insurance to the union that represents the nearly 50,000 striking auto workers across at least ten states. By one estimate, the work stoppage could cost the company as much as $100 million every day. But the union has also dipped into its coffers to pay each of the striking workers $250 a week.
General Motors pulled in $8.1 billion in profits last year, after taxes. The United Auto Workers union, which represents the GM workers, said it has $750 million in its strike fund — the only fund for all of the 400,000 workers that it represents. Paying workers alone costs the union more than $1 million a day. Adding healthcare costs will further deplete the union’s funds and could even affect the length of the strike.
“It may impact the ability to have a monthlong strike,” said Art Wheaton, a labor relations professor at Cornell University. “It looks like a punitive action against the union — as in, ‘You’re on strike? Here, take this.’”
But the workers say they’re not going anywhere.
“If it takes months, so be it. We'll stay out there for months,” said Jim Morgan, a 41-year-old General Motors worker from Waterford, Michigan. “We're all committed to weather the storm, as they say, until we reach an agreement here.”
It’s not unusual for unions to pick up insurance costs for workers during a prolonged strike — and the auto workers union was expecting to if the strike ran until October. But the workers had already paid into their healthcare plan for the month of September, which makes it unlikely the company is saving cash by cutting healthcare mid-month, according to Wheaton.
Neither the union nor the workers expected their company benefits to be cut mid-month. The workers’ benefits will continue under COBRA, which allows people to keep their coverage under their former employer's health plan in the event that they lose their job. But that hasn’t allayed some workers' fears of getting slapped with unexpected bills.
“I currently have an enlarged lymph node that needs radiation treatment, but I don’t know when I can schedule it now because I don’t know what’s going to be covered and what’s not,” Morgan said. “GM’s decision to cancel our benefits on day two, without any notice or anything, that’s completely uncalled for.”
General Motors management, for its part, stressed that the shifting of healthcare costs to the union is standard protocol during a strike. “We understand strikes are difficult and disruptive to families,” the company said in a statement to VICE News. “While on strike, some benefits shift to being funded by the union’s strike fund, and in this case hourly employees are eligible for union-paid COBRA so their health care benefits can continue.”
Asked why benefits were being cut mid-month, the company declined to comment.
Cutting healthcare benefits mid-month isn’t the only unusual move management’s made. In the lead-up to the strike, the union and the company had an agreement that the workers would not go on strike — as long as plants stayed open. But the company “unallocated” the plants, which effectively closed them, at least temporarily. The union sees that move as an attempt to avoid negotiating the plants’ closure.
The auto workers weren’t thrilled. They were already contending with a company that relies largely on temporary and hourly workers to make up its workforce. Those who have been on the job a long time do get paid well and have reliable benefits, but the temps don’t.
President Donald Trump has voiced his support for auto workers on the campaign trail but recently held a closed-door meeting with GM’s CEO, Mary Barra, that the president called called “productive and valuable.” He then tweeted his encouragement that management and the union come to a resolution quickly.
Trump isn’t the only national politician watching these strikes closely. Vocal support for unions, which has surged among Democratic voters in recent years, has also become standard for the Democrats running to oust Trump in 2020.
“At a time when the CEO of General Motors has received a $22 million compensation package and top of the line benefits, it is cruel and outrageous that GM has cut off the health care benefits from their employees in a blatant attempt to force the union into submission,” Sen. Bernie Sanders wrote in a Facebook post.
Cover image: Jerry Harris carries a sign while workers from the General Motors walk a picket line Monday, Sept. 16, 2019, in Bowling Green, Ky. 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. (AP Photo/Bryan Woolston)