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As GM workers picket, Michigan's economy feels the chill

Stock Markets Oct 10, 2019 01:29PM ET
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© Reuters. Striking union workers walk the picket line outside the GM Flint Truck Assembly in Flint

By Tim Reid

FLINT, Mich. (Reuters) - Waving a placard on the picket line outside a General Motors Co (NYSE:GM) truck plant in Flint, Michigan, Robert Bacon says he has no money to spend. His $250-a-week strike pay barely covers his food and gas.

Up the road, bartender Jeanne Bonner made just $2 in tips one day last week, compared with $80 during a normal shift.

"We've thrived off GM for years," Bonner said. "When they are not working it hurts everybody around here."

Convenience store owner Brad Khirfan says he has lost two-thirds of his business since GM workers walked off the job last month, triggering the longest nationwide U.S. auto strike in nearly 30 years.

Khirfan, who has run his shop next to the GM truck plant for 32 years, said the strike could have political repercussions.

"I take the pulse of the workers here. A lot of them feel abandoned by (U.S. President Donald) Trump," he said. "He promised manufacturing jobs would come back, and it's not happened."

The United Auto Workers union strike is spreading pain throughout Michigan, a battleground for the November 2020 election where the economy was slowing before more than 23,000 UAW workers walked out of GM's Michigan plants in mid-September. The total number of UAW strikers nationwide is 48,000.

Unemployment in the state is 4.2%, and it has been rising even as the national rate continues to fall. The state's job growth has slowed dramatically, said Chris Douglas, an economist at the University of Michigan-Flint. The strike has cost a total of $228 million in lost wages in the state between Sept. 16 and Oct. 6, according to the East Lansing, Michigan-based Anderson Economic Group.

The health of Michigan's economy matters to rivals in the 2020 U.S. presidential race.

Trump, a Republican, carried Michigan by less than 11,000 votes in 2016, an unexpected victory that along with wins in Pennsylvania and Wisconsin propelled his ascent to the White House. Trump's tough stance on trade and his promises to win back manufacturing jobs resonated with many UAW members.

Some of Trump's Democratic rivals have tried to use the GM strike to win back UAW votes. They have joined GM strikers on picket lines and echoed their calls for GM to share profit more fairly and invest more in U.S. plants.

A HISTORY OF CONFLICT

Flint, a city of about 100,000 people located 70 miles (113 km) northwest of Detroit, has a long history of labor conflict. In 1936, workers at a GM factory here staged a sit-down strike that forced the automaker to recognize the United Auto Workers union, a milestone in U.S. labor relations.

Some workers picketing outside GM's Flint truck this week remembered the UAW's 1998 strike against GM parts-making plants in Flint that lasted 54 days and cost the company $2 billion. In the years following that bitter clash, GM sold or closed several of its Flint operations, shedding thousands of UAW jobs and battering the city's economy.

Today, Flint is one of the most impoverished cities in America. Nearly 40% of the city's residents live below the poverty line, according to U.S. Census data published in 2018. Flint suffered a prolonged water crisis that began in 2014, when it emerged that lead had leeched into its water supply, exposing many residents to elevated lead levels.

The sprawling GM truck assembly plant offered hope for better times. The new heavy-duty pickup trucks assembled at the plant are highly profitable, and GM President Mark Reuss earlier this year traveled to Flint to say the plant would hire 1,000 additional workers to build them.

The strike halted production just as the truck plant was ramping up to deliver vehicles to dealers.

DOUGHNUTS AND $250 A WEEK

Instead of earning overtime pay, GM truck plant workers are getting by on $250 a week in UAW strike pay.

On the picket line, strikers acknowledged the frequent horn blasts from passing drivers honking in solidarity. One truck driver arrived with free doughnuts for the strikers, while another group set up an impromptu hot dog stand.

Russ Van Buren, 47, a striking worker outside the Flint plant, describes himself as a political independent. He has not decided whom he will vote for next year, but said if the Michigan economy turns worse, Trump will be in trouble.

"If our economy goes down the toilet, people will desert Trump," Van Buren said. A third of UAW workers backed Trump in 2016, the union has said. "People are going to look for another person to run this country," Van Buren said.

Standing nearby, Jeremy Henman, 32, a striking forklift driver, said he likes Trump's idea of a border wall and his support of gun owners, and thinks the economy is doing great.

"I'm thrilled with what he's done," Henman said. "I'm definitely voting for him again."

As GM workers picket, Michigan's economy feels the chill
 

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Shafty Megee
Shafty Megee Oct 10, 2019 2:45PM ET
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These people are paid to be on strike? How nice.
 
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