The three leading American auto manufacturers – GM (General Motors), Chrysler, and Ford – had gone through a major turmoil around the late 1970s and 1980s after fuel prices skyrocketed. In a bid to save the three corporations, UAW (United Auto Workers) had agreed to some concessions. The union had agreed to wage cuts, elimination of jobs, and pay freezes.
The union later regained its glory (that it had lost with the concessions) in the late 1990s after registering improved profits. Since the union was gaining power, the relationship between workers and the management turned sour.
By 1998, Flint was home to several workers, more than in any other place in the U.S. Flint had some 33,000GM workers at 18 offices and factories. However, that number was still unmatchable to the number of people employed (in Flint) in the late 1970s when GM held more than 50% of the U.S auto market. Due to the financial struggles of the 1970’s and 1980’s, GM had weakened its dominance, and the company was forced to eliminate more than 40,000 employees - as a way of streamlining its operations.
On June 5, 1998, 3,400 members of the UAW union downed their tools at a GM factory in Flint. The metal-stamping facility together with other GM plants countrywide had to halt their operations in a strike that lasted seven weeks. GM had previously faced more than seven strikes across the U.S in the year leading up to the 1998 strike. The strikes mostly revolved around issues of job security.
At the metal-stamping factory (where the walkout began), UAW was unhappy that the company had not fulfilled its 1995 commitment of spending $300 million in upgrading the facility. The strike did not end. After a week, another 5,800 employees downed their tools citing frustrations over the company’s outsourcing (both in North America and abroad) of work to other plants that were not part of the union. The 54-day strike in Flint halted GM’s operations countrywide and cost the company $2 billion. The strike in Flint meant that other facilities could not operate since they could not receive parts that were needed in production.
After the strike, both sides issued their demands and signed an agreement to seal the deal. The workers agreed to some changes in the work rules, which included a 15% rise in the daily –required- output of parts for some employees. GM promised it would not shut down several of its striking plants. GM also promised that it would invest a sum of $180 million in new equipment for one of the plants.
Both parties had ended a dispute that had pushed thousands of Americans into temporary unemployment and slowed the country’s economic growth. It seemed the strike had started draining the cash reserves of both GM and UAW, and it would be a disaster for either to call a truce due to insufficient funds.
Even though things had changed for the better, the relationship between GM and its workers worsened in the later years. UAW launched a nationwide strike against GM in September 2007. During the strike, 73,000 workers downed their tools and stopped operations in 30 states for two days until a solution was found.