UAW calls strike against General Motors for first time since financial crisis

The United Auto Workers union plans to strike against General Motors following the two sides not reaching a tentative deal before a Saturday night deadline.

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By Michael Wayland, CNBC

DETROIT — The United Auto Workers union plans to strike against General Motors following the two sides not reaching a tentative deal before a Saturday night deadline.

The strike, depending on its length, could easily cost GM hundreds of millions of dollars. The last time the union declared a strike at GM was in 2007. The two-day work stoppage was estimated to have cost the Detroit automaker more than $300 million a day.

UAW Vice President Terry Dittes, who oversees the union’s GM unit, made the strike announcment during a press conference Sunday morning in Detroit. The strike will take effect at 11:59 p.m.

The union, according to Dittes, did not make this decision lightly. He called the strike the union’s “last resort.” He did not take questions after the remarks.

Brian Rothenberg, a spokesman for the union, said the union does not believe a deal will be reached to avoid a strike . He said upward of 200 or so local union leaders unanimously voted for the strike.

Dittes, in a letter to members Saturday night, said there remained “many outstanding issues” that negotiators still need to reconcile, including “differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing.” The listed issues were expected to be some of the most difficult in the negotiations.

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Since midnight, UAW members with GM have been working without a contract and those working Sunday had to cross picket lines of their fellow union brethren, as UAW janitorial workers at the facilities went on strike at midnight.

The circumstances add to the tension of already unprecedented negotiations, following UAW Region 5 Director Vance Pearson, a member of the union’s International Executive Board, by federal officials Thursday with embezzlement of union funds, among other charges.

The affidavit detailing the charges also reportedly implicated UAW President Gary Jones and former UAW President Dennis Williams, along with Pearson’s by FBI, IRS and Department of Labor agents two weeks ago. Pearson, who joined the UAW in 1981, succeeded Jones as director of UAW Region 5.

Federal prosecutors say Pearson and other unnamed union officials conspired to embezzle hundreds of thousands of dollars in union money “for their own personal benefit along with other crimes.”

The new charges and implication of Jones, as first reported Thursday night by The Detroit News, raise significant questions about the union’s credibility as it works to sign new labor contracts on behalf of 158,000 members.