Moody’s Investors Service, days after lowering rival Ford Motor Co.’s credit rating to junk, said in a note Monday that 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.”
As of Tuesday, the striking workers’ health care coverage has been transferred to the Consolidated Omnibus Budget Reconciliation Act, or COBRA. It will be paid for through the union’s strike fund, significantly increasing the cost to the UAW to keep workers off the job.
Dittes announced the move in a Tuesday letter, updating a Monday letter in which he said workers’ current health care coverage would remain through September.
“We understand strikes are difficult and disruptive to families,” GM spokesman Jim Cain wrote in an email. “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.”
Workers on the picket lines, who during a strike make $250 a week after the eighth day, have said their priorities in a new contract include protections for temporary workers and a quicker path to top wages for those still earning second-tier pay. The union and automakers in 2015 established an eight-year grow-in period for workers to earn top dollar, but workers want that time frame shortened.
Workers also want GM and the other automakers to make up for concessions the union agreed to during the financial crisis to help keep them afloat.
“They didn’t address all the concessions we’ve had in recent years, the things we’ve given up for this corporation for it to become profitable again,” David Bupte, a longtime electrician who works at the company’s Detroit-Hamtramck assembly plant, told Automotive News Monday. “These employees have kids that want to go to school, they’ve got mortgages and car payments. All we’re asking for is a guarantee that we have a job and an income.”
Meanwhile, both the White House and GM say the Trump administration is not involved in talks between the automaker and the UAW. That comes after Politico on Tuesday reported that the White House was intervening in the negotiations.
A GM spokesman said the White House “has no involvement in the negotiations.”
The White House also said it’s not playing a role in the talks.
“The Trump Administration, including Larry Kudlow and Peter Navarro, are not involved in the negotiations between the UAW and GM,” said White House spokesman Judd Deere.
President Donald Trump on Monday had said “federal mediation is always possible, if that’s what they want,” adding that he was “sad to see the strike, and hopefully it’s going to be a quick one.”
Crain’s Detroit Business and Reuters contributed to this report.