In mid October GM announced the month long strike is almost over, union members will have to vote to accept the offer made by GM. The GM strike shows how the US economy has changed over the years. Back in the 1950’s, a GM executive said to the affect as GM goes so does the US economy. A strike back then would have slowed down economic growth and many would be worried. Now, while GM is important, the rest of the economy continued on its pace.
In an article by Tom Krisher of Associated Press about 49,000 workers have been on strike for the past month and the strike has cost GM about $2 billion. The workers will receive pay raises, lump sum payments and a signing bonus of $11,000. In return GM will proceed to close down factories in Lordstown, Ohio, Warren, Michigan and a plant near Baltimore, Maryland.
The Detroit Hamtramck plant which GM was considering closing will remain open as it shifts to producing a new electric pick up truck.
GM was using different wage scales depending on the years hired with new hires making about $5.00 less money for the same work. If a worker has 3 years continuous service they will be making full wages of $32 a hour.
One of the reasons why GM’s stock was not affected, it has about 50,000 workers in China. The car is selling vehicles as the US was having problems with US operations.
Linking to dividend paying stocks, economies change as much as the auto industry ruled the economy it does not anymore, although it is an important part of the overall economy. The auto vehicle industry is changing to electric which requires less parts and can be even greater robotized or need fewer workers, but the auto is needed for people to move around.
There are more questions than answers, till the next time – to raising questions.