General Motors Co said it would not continue paying for health insurance for workers who are on strike on Tuesday. Workers from the United Auto Workers union had sat on strike on Monday as negotiations with the company failed on a new national agreement for 48,000 hourly workers regarding their pay, healthcare, etc.
Such a company-wide strike has been the first one in 12 years in the company’s history. Negotiations between the union and automakers Ford Motor Co, Fiat Chrysler and GM had already been anticipated to be difficult. This comes as the union took up issues like profit sharing, health care and the use of temporary workers against the companies that are finding it hard to stay up in the current market conditions.
While talks had progressed a bit on Tuesday, a deal did not seem possible as of yet, officials from UAW said.
Workers from the union believe that the carmaker should allow for profit-sharing for the employees of the union as they stood with the company when it was on the brink of bankruptcy. Workers stood with signs “UAW On Strike” outside factories of GM.
Jim Cain, GM spokesman said that the company understands that strikes can be harmful to the families of the workers. When a union sits on a strike, the union’s strike fund is used to finance benefits for the workers. The automaker shifted the health insurance costs to the union which has put another drain on its funds. On the website of UAW, the union has mentioned that the strike fund would be used for medical and prescription drugs.
The automaker said in a statement that its total expenditure on its workers’ healthcare insurance amounted to $1 billion per year or $1,700 to $2,000 for each worker per month.