General Motors Corp. is losing more than $80 million each day because of the United Auto Workers strike in Flint, Mich. UAW workers started the strike early in June, claiming GM had violated numerous contract agreements, including a promise to invest $300 million in the Flint Metal plant. GM claims it is not bound to invest the entire $300 million because workers at the plant were not working at maximum productivity. The UAW workers in Flint have seen company profits soar in the past decade. They were promised a piece of that growth in the form of a $300 million investment. By withholding the money from the plant and continuing to outsource work to low-wage foreign labor pools, GM is reinforcing the UAW’s perception that American workers don’t matter.
The residents of Flint have had a love-hate relationship with GM ever since the company was started in 1908. Flint has profited immensely from GM’s presence, but it also has a long list of complaints. The past 90 years have been peppered with strikes, with 43,000 jobs cut since 1978. Workers interpret GM’s unwillingness to invest in their plant as a sign their jobs are once again in danger. This notion is reinforced by a newly released corporate plan to outsource more work to its already existing operations in Mexico. UAW Vice President Richard Shoemaker has estimated the move could lead to a loss of 11,000 more jobs.
Back in 1992, GM reported a record loss of $4.5 billion. Chairman Robert C. Stempel was ousted as a result. New Chairman John F. Smith Jr. had one goal: Make GM a top global competitor. In the first quarter of 1998, GM posted a record profit. Chrysler and Ford have made the global shift as well, yet officials at Ford and Chrysler say labor relations at their plants are good. GM cannot attain these positive relations because the company refuses to provide its domestic workers with the investment capital they were promised. The move to outsource labor into Mexico and other low-wage countries needs to be accompanied by financial reassurance to its domestic work force.
The company claims that the plant is not working at full productivity because of rules that allow workers to receive a full day’s pay for meeting a quota in less than eight full hours. This practice may be losing money for GM, but it was part of a previous contractual agreement with the Flint plant. Withholding investment capital from the Flint plant is not a fair retribution for poor contract negotiations. If labor practices are not meeting GM standards, then they need to renegotiate, not cut jobs.
If GM returns to the bargaining table and vows to follow through on its promise to invest in the community that helped it attain greatness, then maybe it can start making money again. Profits can disappear quickly, especially with GM facing more efficient global competitors. GM violated its promise to workers. Flint residents have invested years of labor in GM to secure themselves and the company a future. Flint and GM were once partners in the making of an auto giant. And now that GM is showing new profits, it is time for the company to take care of the community that nursed it to greatness by following through on its promise.