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UAW On Strike Against GM

Thousands of United Auto Workers walked off the job at General Motors Corp. plants around the country Monday in the first nationwide strike against GM since 1970.

UAW President Ron Gettelfinger said the union launched the strike after "one-sided negotiations" failed to reach an agreement.

"It was going to be General Motors' way at the expense of the workers," Gettelfinger said. "The company walked right up to the deadline like they really didn't care."

Workers walked off the job and began picketing Monday outside GM plants after the 11 a.m. UAW strike deadline passed. The UAW has 73,000 members who work for GM at 82 U.S. facilities, including assembly and parts plants and warehouses.

If you're looking to buy a car, you're not going to notice this strike, reports CBS News correspondent Anthony Mason. GM has a two-month backlog of inventory that will keep it in business for a while.

But if the strike drags on, the whole economy could feel it.

For all the downsizing Detroit has endured, it's still a power engine in the U.S. economy. Nearly 4 percent of our GDP comes from the sale and production of new cars and trucks, adds Mason.

As GM workers filed out of a big Cadillac plant just a few miles from GM's headquarters in Detroit, most were surprised, reports Jeff Gilbert of CBS News affiliate WWL. Many expected a settlement.

Pay and job security are the big issues. Both sides say they want to keep talking, adds Gilbert.

Bargaining broke off Monday morning, and then resumed in the afternoon at an office building in Detroit.

Included in the negotiations was a groundbreaking provision establishing a UAW-managed trust that will administer GM's retiree health care obligations. GM pushed hard for the trust - known as a Voluntary Employees Beneficiary Association, or VEBA - so it could move $51 billion in unfunded retiree health costs off its books. GM has nearly 339,000 retirees and surviving spouses.

"This strike is not about the VEBA in any way shape or form," Gettelfinger said at an afternoon news conference in Detroit.

"The No. 1 issue here is job security," Gettelfinger later said, adding that the union also was fighting to preserve workers' benefits.

GM spokesman Dan Flores said the automaker was disappointed in the UAW's decision to call a national strike.

"The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company," he said. "We remain fully committed to working with the UAW to develop solutions together to address the competitive challenges facing GM."

It remained to be seen what effect the strike would have on the automaker and consumers. The company has sufficient stocks of just about every product to withstand a short strike, according to Tom Libby, senior director of industry analysis for J.D. Power and Associates.

Worker Anita Ahrens burst into tears as hundreds of United Auto Workers streamed out of a GM plant in Janesville, Wis.

"Oh my God, here they come," said Ahrens, 39. "This is unreal."

Ahrens has seven years at the plant, where she works nights installing speakers in sport utility vehicles. She waited outside the building Monday for her husband, Ron Ahrens, who has worked there for 21 years.

The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.

"This is horrible, but we're die-hard union, so we have to," Ahrens said. "We got a mortgage, two car payments and tons of freaking bills."

Gettelfinger said he believed the UAW's leadership owed "our membership an answer as to why they're out there."

"This is as serious as anything that any of us do," he said. "There's not one person on this stage ... that wanted to see these negotiations end in a strike. Who wins in a strike? But again, you can be pushed off a cliff, and that's what we feel like happened here."

Despite the strike, GM stock rose a penny to $34.95 in midday trading.

More than a thousand UAW workers streamed out of GM's Delta Township plant near Lansing at 11 a.m. UAW members were handing out picket signs that said: "UAW On Strike."

"I don't think it's a win for either side. It's too bad it's come to this, but we have given up a lot already," said Pat Haley, 50, from Dimondale, a quality control specialist who has been with GM for 31 years.

While GM has enough cars and trucks to withstand a short strike - the automaker had about a 65-day supply of cars and trucks as September began, according to Paul Taylor, chief economist for the National Automobile Dealers Association - it still would be costly for the company.

The UAW last struck GM in 1998. In that strike, workers at two GM parts plants walked out for 54 days, costing the automaker $2.2 billion. The strike, which occurred between years when national negotiations were held, was over work rules and GM's plans to eliminate jobs.

The negotiations came at a difficult time for both the automakers and the union. Detroit's automakers lost a collective $15 billion last year, and all say they need labor cost parity with their Asian competitors in order to turn consistent profits. GM said it pays its workers $73.26 per hour in wages, pension and health care benefits, while Toyota Motor Corp. pays an estimated $48 per hour, according to an estimate from U.S. automakers. Retiree health costs are a large part of that gap.

The Detroit automakers also face more competition than ever before in the U.S. market. The Detroit automakers' combined share of their home market has plunged from 73 percent in 1996 to 54 percent last year. In August, Detroit's Big Three controlled less than 50 percent of the U.S. market for the first time.

The union also is feeling pressure. UAW membership has fallen from a high of 1.5 million active members in 1979 to around 576,000 today, and the union already has agreed to massive buyout plans and changes to retiree health care to help the automakers.