A strike at General Motors (GM) is having a big impact on the nation’s largest auto manufacturer.

This week, nearly 50,000 employees stayed off factory assembly lines in Detroit and dozens of other factories around the country, demanding equal wages for workers. And as the strike has entered its second week, it’s estimated to have cost GM between $25 and $50 million.

GM has been in the process of restructuring its operations, aiming to aggressively enter the electric vehicle market. In 2018, it announced plans to cut 15,000 workers and shutter up to five plants.

What do strikers want?

GM workers reportedly want equal pay and an end to a system that pays workers who have longer tenures about 40% more than people hired more recently. They also reportedly want a path to regular employment for temporary employees, many of whom have remained contractors for close to a decade. Additionally, workers want to keep their health care affordable, according to reports.

The strikers are represented by the United Auto Workers Union, which last organized a strike against GM in 2007. The UAW is one of the largest unions in the country, representing nearly 1 million current and former automobile workers.

What happens when workers go on strike?

A strike is a collective group action by employees to attempt to change working conditions, such as wages, benefits, or safety conditions, by withholding their labor. Under something called the National Labor Relations Act, employees are entitled to lawfully engage in a strike.

Unions, such as the UAW, typically represent workers in negotiations with an employer, to come up with new working agreements and contracts. Workers pay dues to belong to a union, and in exchange, they receive a number of benefits, such as representation in these contract negotiations, and pay for each week they remain on strike. Union members who cross a picket line to return to work before a strike concludes could jeopardize their pay and membership in the union.

As union membership has declined over the past few decades, the number of strikes has also decreased dramatically.

More about GM

  • GM is one of the largest auto manufacturers in the world. GM, along with Ford and Chrysler, are the three largest auto producers in the U.S. Together, they account for nearly 3% of the U.S. economy.
  • GM produces and sells cars under four brand names in the U.S.: Chevrolet, Cadillac, Buick, and GMC.
  • In the 1980s, GM employed nearly 1 million workers. Today, that number is closer to 170,000.
  • Last year, it announced plans to lay off 15% of its workforce, saying the move would save the company about $4.5 billion.
  • Tariffs on steel and aluminum, stemming from the U.S. trade war with China, may have cost GM as much as $1 billion in the past year.
  • Because of its size, GM has been rescued several times over the years from bankruptcy by the federal government, at taxpayer expense. Most recently, GM received a bailout of $13 billion during the financial crisis of 2008.
  • GM Chief Executive Officer Mary Barra has said the company plans to sell up to 1 million electric vehicles annually, reportedly a costly transition that will require new, more tech-savvy workers and engineers.
  • GM’s troubles come at a time when U.S. consumers are buying fewer passenger cars, and are instead shifting to pricier SUVs.

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