The GM Strike, President Trump and California’s Clean Air Act Waiver
GM workers are on strike for better pay, greater profit sharing and the end to lower pay and benefits for temp worker jobs. GM is trying to move towards cleaner, less polluting and higher gas efficiency motor vehicles. President Trump is revoking California’s waiver for cleaner air, less polluting vehicles and pursuing anti-trust actions against those car manufacturers working with California towards less pollution, fewer greenhouse gases and higher gas mileage.
GM workers agreed to establish a two-tier wage and benefit structure in 2009 to help GM avoid shutting down. The Obama Administration, GM and the UAW agreed on a broad package of changes that allowed GM to stay in business and return to prosperity. https://obamawhitehouse.archives.gov/realitycheck/the-press-office/fact-sheet-obama-administration-auto-restructuring-initiative-general-motors GM is now highly profitable. https://www.macrotrends.net/stocks/charts/GM/general-motors/net-profit-margin GM has been showing substantial growth in US car sales. http://gmauthority.com/blog/gm/general-motors-sales-numbers/ However it has lost a lot of US market share over the past 20 years, declining from 28% to 17% of market share.
The UAW wants to end the lower tier temp jobs and put all workers on the same pay scale. The UAW wants to keep its worker’s low share of health insurance premiums – about 4% as compared to the US average of about 25% (you can see why they may be a little skeptical about the immediate benefits to UAW members of Bernie Sanders’ Medicare for All proposal). UAW and the automakers have a profit sharing agreement; for GM, its workers received about $10,000 annually in profit sharing over the past four years. https://www.autonews.com/manufacturing/record-uaw-profit-sharing-payouts-confront-post-peak-market GM is proposing a bonus of $8,000 per workers on the signing of the new contract.
GM has closed unprofitable plants in Lordstown, Ohio and Hamtramack, Michigan because customers were not buying the cars they were producing. https://www.freep.com/story/money/cars/general-motors/2018/11/26/ontario-plant-closure/2112539002/ GM says that it wants to re-open new plants to produce electric trucks and electric car batteries in those communities and is offering to commit $7 billion in new investments in plants producing electric vehicles. https://www.autoblog.com/2019/09/20/uaw-gm-offer-lower-paying-jobs/
Southern California and Central Valley have some of the worst air pollution in the nation due to “inversions” – i.e. the pollution we emit is trapped by and cannot get over the high mountains to our east, creating killer smogs, especially severe in the summer’s heat. When the EPA (Environmental Protection Act) was established under President Nixon in 1970, California was given waiver authority to establish stricter standards due to our already perilous air. California has adopted some of the toughest anti-smog and anti-greenhouse gas emissions rules in the nation, and we have made enormous progress in cleaning up our air. https://ww3.arb.ca.gov/research/health/healthup/feb08.pdf We still have a very long way to go, as we still have the nation’s dirtiest air. https://qz.com/1604654/the-us-cities-with-the-worst-air-pollution-are-in-california/
California just reached a historic voluntary agreement with four large auto-makers – Ford, VW, Honda, and BMW – to reduce air pollution and green house gas emissions from their vehicles. https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/ They will achieve an average of 50 miles per gallon on vehicles sold in California by 2026. https://www.npr.org/2019/07/25/745389326/california-signs-deal-with-automakers-to-produce-fuel-efficient-cars
The Trump Administration has responded by revoking California’s EPA waiver to get cleaner air and is pursuing an anti-trust investigation of the four path-breaking auto manufacturers. https://www.nbcnews.com/business/autos/trump-about-strip-california-its-right-overrule-emissions-regulations-n1055811 The car makers are sticking with California and the other states adopting the tighter controls on pollution and greenhouse gas emission. In part, they recognize that the rest of the world is moving quickly in that direction, and they need to be competitive in a global automotive industry.
China is GM’s largest market, accounting for nearly 4 million in vehicle sales in 2017. Trump’s trade war is badly hurting GM’s car business in China. https://www.autonews.com/article/20181008/GLOBAL03/181009687/gm-s-china-sales-slip-into-reverse-dropping-15-as-market-stalls The future for GM in China and elsewhere is electric vehicles which the company hopes to grow to one million vehicles in the not too distant future. https://www.gm.com/our-stories/technology/gm-technology-paves-the-way-for-an-all-electric-future.html
So what should GM and the UAW do? Sign on with California and move towards better gas mileage, less pollution and reduced greenhouse gas emissions or stick with Trump for lower gas mileage, more pollution, greater greenhouse gas emissions and a much hotter planet with faster climate change? This is a bet on the future of the car manufacturer, our nation and our planet.
Prepared by: Lucien Wulsin