Collective Bargaining: The General Motors-United Auto Workers Deal


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : HROB109 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Human Resource/ labor relations/ industrial relations/ Collective Bargaining
Case Length : 19 Pages
Period : 2005-2008
Pub Date : 2008
Teaching Note : Not Available
Organization : General Motors
Industry : Automotive
Countries : USA

Abstract:

This case is about the collective bargaining agreement between one of the world's leading automobile manufacturers, General Motors Corporation (GM), and the United Auto Workers in late 2007. The agreement, which a number of experts have termed as 'historic', was the result of a very complex bargaining process.

GM, which dominated the US market till 1980, with a market share of 46 percent, saw its market share decline steadily after the entry of Japanese competitors. In addition to issues relating to its products and marketing, GM's fortunes were severely affected with under-funded pension liabilities, rising employee and retiree healthcare costs, and a decreasing market share in the US automobile market.

The company's US market share fell to less than 25 percent in 2006. In 2007, GM inked a new labor contract with UAW which, analysts felt, would change the competitive landscape of the US auto industry and go a long way in ensuring GM's survival. Analysts felt that the deal also showed the changing role of the labor union in the 21st century.

Issues:

» Understand the challenges faced by GM in the US automobile market while competing with Japanese competitors.

» Understand the impact of GM's healthcare and other legacy costs on its ability to compete in the US automobile market.

» Understand issues and concepts related to the collective bargaining process, and, also study how GM negotiated a historic deal with the union that was expected to contribute to its turnaround strategy.

» Explore and discuss the changing role of trade unions in the 21st century.

Contents:

  Page No.
A 'Monumental Outcome of Collective Bargaining' 1
Background Note 3
Effect of Healthcare & Other Legacy Costs 4
GM's Initiative to Reduce Costs 6
UAW's Nationwide Strike 7
The Agreement 9
A Win-Win for Everyone? 10
Outlook 12
Exhibits 14

Key Words:

Collective bargaining, Negotiation, Collaboration, Trade union, Strike, social contract, Labor union, Labor contract, Human Resource, attrition program, Turnaround, Strategy, Competition, Japanese competitors, competitive advantage, restructuring, VEBA, Healthcare, GM, Ford, Chrysler, Toyota, Honda, UAW

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