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Talks between UAW and GM take 'turn for the worse': union official

Issue of moving work from Mexico to US plants a major stumbling block

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The United Auto Workers union says that GM's latest response to its new contract proposal "did nothing to provide job security" for its US workers.

Detroit

GENERAL Motors and the striking United Auto Workers (UAW) hit a roadblock in contract talks on Sunday over the question of moving production from Mexico to plants in the United States, two people close to the talks said.

The union, which has been on strike since Sept 16, has pressed GM to shift production of some SUVs and pickup trucks from Mexican factories in order to create and secure jobs in domestic plants, these people said.

After the two sides appeared to make progress in recent days, a UAW vice-president said on Sunday that the union had offered a new contract proposal over the weekend but that GM's response failed to address key concerns.

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"We, in this union, could not be more disappointed with General Motors," Terry Dittes, the UAW's lead negotiator with GM, said in a letter to members. "These negotiations have taken a turn for the worse." He did not refer specifically to the issue of where GM produced cars, but said GM's latest response "did nothing to provide job security" for its US workers.

In a statement, GM said it was committed to continuing discussions around the clock to reach a resolution. "We continue to negotiate in good faith with very good proposals that benefit employees today and build a stronger future for all of us," the company said.

The two sides were continuing negotiations on Sunday, but the tone was growing rancorous. In a letter to the company, Mr Dittes wrote: "During your response to our proposal delivered at 9:05 am today, Sunday, Oct 6, 2019, you didn't even have a professional courtesy to explain why you could not accept or why you rejected our package proposal for each item we addressed. We expect the company to respond and discuss the package proposal we presented yesterday. The law and basic decency require no less."

By Saturday, the union and the company appeared to have reached agreements on most major issues, including wage increases and a path for temporary workers to become permanent employees, people close to the talks said. Two unresolved matters, they said, included the time of service required for less senior workers to reach the top union wage - it currently takes eight years - and inflation and cost-of-living adjustments for pensions and 401(k) retirement plans.

But then the issue of moving work from Mexico to US plants arose as a major stumbling block.

GM has three vehicle-assembly plants in Mexico that make SUVs and pickup trucks sold under the Chevrolet and GMC brands. The company's decision a few years ago to make the new Chevrolet Blazer in Mexico in particular has rankled the union since the mid-size SUV is the kind of vehicle that typically can be made profitably in US plants.

At the same time, GM has closed a car plant in Lordstown, Ohio, and engine and transmission plants in Baltimore and in Warren, Michigan. A second car plant in Detroit is scheduled to close in January.

The union is pressing GM to move some production from Mexico to the idled US plants. Carmakers sometimes move production between plants, but doing so can disrupt production and incur costs for new machinery or moving existing assembly lines.

GM has offered to invest US$7 billion in US plants that would create 2,700 jobs and preserve 2,700 others, including keeping the Detroit car factory open. It has also offered to build a new battery plant with a partner near Lordstown that would hire union workers.

"They are down to the toughest issue," said Erik Gordon, a University of Michigan business professor who follows the auto industry. "GM sees it as the flexibility to survive the changes in buyer tastes and from gas to electric vehicles. The UAW sees it as job security for workers who are as worried as GM is about the changes." NYTIMES