GM strike, Day 2: Nearly 50,000 workers off the job in 19 states
Who pays for the health care insurance for the striking workers?
Effective Tuesday, GM employees on strike were no longer covered under the company’s plan. Instead, they will be eligible to sign up for medical assistance or COBRA from the United Autoworkers Union. The change doesn't represent a loss in health care, just a transition of coverage.
In a statement GM said: “We understand strikes are difficult and disruptive to families. While on strike, hourly employees will be eligible for COBRA so their health care benefits can continue."
In a letter to the UAW obtained by CNN Business, Scott Sandefur, a vice president at GM, confirmed the company will no longer be paying for employees’ coverage. “Our employees should be eligible for COBRA paid for by the UAW fund so that their health care benefits continue. As a result, we believe that our employees, and your members will not suffer any loss of health care coverage,” Sandefur wrote.
The UAW initially told its members on Monday that their company coverage would continue until the end of the month. But union VP Terry Dittes said that indeed members will need to sign up for medical assistance or COBRA. The UAW has activated its strike fund to pick up the cost.
CNN's Ryan Young is outside of a GM plant in Flint, Michigan where several workers are picketing.
He talked to some workers who said they plan to stand outside of the factory for their entire shift to "make sure their GM bosses understand how hard they are fighting for this."
One employee told Young the strike is a "battle for the middle class."
Watch Young's full report below from HLN:
Ray Carter-Wilson, a single father striking at a Detroit-area plant, said surviving with a limited income during the strike is "very difficult." But he's ready for it last a while.
"I understand the difficulty of the negotiations and the importance of them," he told CNN "New Day" anchor Alisyn Camerota. "This being a lengthy strike ... I'm fine with it as long as everything gets ironed out and is fair for everyone."
Shawnte McMichael, a striking GM worker at a Detroit-area plant, said the strike was "mind blowing" because she didn't think it would happen.
"It's very scary," McMichael told CNN "New Day" anchor Alisyn Camerota. "I'm fearful and I want it to end very soon."
She said she wants the UAW and GM to agree on "something fair."
The autoworkers union has asked General Motors to shift jobs and manufacturing from Mexico to the United States. GM would not budge on that point, according to a UAW source close to the negotiations.
A GM spokesperson, who asked not to be identified, confirmed that the UAW asked about moving jobs currently held in Mexico to the United States. But the spokesperson said GM understood the UAW's request to mean autoworkers wanted the company to create more jobs in the United States.
GM has pledged to create more than 5,400 new jobs and invest $7 billion in the United States as part of its offer to the UAW.
Negotiators from General Motors and the United Auto Workers union are due back at the negotiating table Tuesday as Day 2 of the strike by nearly 50,000 workers gets underway.
The talks wrapped up around 9 p.m. on Monday, according to a person familiar with the talks. Typically, negotiators will work late into the night if they are close to an agreement.
GM said it is ready to engage in round-the-clock talks. Union officials repeatedly said Monday that despite some progress the two sides remain far apart on key issues of wages, profit sharing, health insurance, job security and GM's reliance on about 3,000 temporary hourly workers. The union wants those workers to have permanent and better paying jobs. The union also wants vehicles built in Mexico shifted to US plants now slated for closure.
The strike is costing GM about $50 million a day in lost revenue, according to an estimate from Credit Suisse. Those losses could be partly offset because the company won’t be paying the striking workers.
CNN Business has obtained a letter from Terry Dittes, vice president of UAW, telling union members that during the strike their health insurance will continue through the end of September— paid for by GM.
“To allay any concerns that our Members may have regarding an interruption in health care coverage, I am writing to confirm that the Company will continue health care benefits through the end of the month for all UAW-represented employees as provided for in the contracts,” Dittes wrote.
A source close to the UAW/GM negotiations tells CNN Business that discussions will continue through Monday night.