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General Motors and striking workers bargain in the dark

A striking auto worker at GM's assembly plant in Flint, Mich.
A striking auto worker at GM's assembly plant in Flint, Mich. Photo: Jeff Kowalsky/AFP/Getty Images

The conflict between GM and its 46,000 striking workers comes down to a fundamental issue: both sides are unclear about where the industry is headed.

The big picture: The labor dispute is shaped, in part, by the changing transportation landscape. Traditional business models are fading, but it's not clear whether investments in new technologies like electric vehicles and self-driving cars will pay off.

What's happening: Faced with uncertainty, anxious workers naturally want to lock down income and job guarantees — exactly the opposite of what employers want, which is flexibility and contingency.

Where it stands: Prospects for a quick settlement faded Tuesday, after GM cut off union members' health benefits, escalating the dispute that has shut down 55 factories, warehouses and other GM facilities.

  • Workers are eligible for continued coverage under union-paid COBRA benefits, but the move significantly increases the cost to the UAW to keep workers off the job.
  • The tactic could eventually drive the parties toward a resolution, but little progress was reported Tuesday and sources said "main table" negotiations on financial issues had been suspended as of Tuesday evening.

Details: Businesses hate uncertainty, and carmakers are awash in it right now.

  • Fuel economy standards aren't finalized because the EPA wants to roll back Obama-era targets and revoke California's authority to set stricter rules; a court battle is likely.
  • A new trade deal between the U.S., Canada and Mexico has yet to be ratified.
  • President Trump's trade war with China is escalating.
  • Steel tariffs, while lifted on Canada and Mexico, remain in place for imports from other countries.
  • Trump is threatening 25% tariffs on imported cars and auto parts to protect U.S. national security.

Meanwhile, the shift toward electric vehicles is a major source of anxiety for the union.

  • EVs have 80% fewer parts, and are easier to assemble, which means they'll require a lot fewer workers, including those that manufacture parts like engines and transmissions, according to a UAW analysis.

But EVs could also create new jobs making things like batteries, electric motors, electronics and thermal systems.

  • The union's worry is the production of these EV components could shift to new players that are more likely to import them from overseas.
  • The UAW wants companies like GM to commit to re-tool plants, re-train workers and produce new components in the U.S.
  • GM has said its offer to the union includes a new electric pickup truck to be built in Michigan and a new battery facility in Ohio.

"You can't be paralyzed by the uncertainty," Kristin Dziczek of the Center for Automotive Research, tells Axios. "Businesses have to move forward, make bets on technology and plan their supply chain based on where they think trade policy will go."

The bottom line: Until the 2 sides can unite on a shared vision for at least the next 4 years, the strike against GM will continue.