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Teamsters fight Chrysler, GM cuts

October 16, 2009

Teamsters fight Chrysler, GM cuts

Detroit News Washington Bureau

Washington — Union car haulers are angry with Chrysler Group LLC for shifting some work to nonunion companies to save money, and they fear General Motors Co. may follow suit.

The International Brotherhood of Teamsters says moves by Chrysler and by GM, if the automaker takes the same action, will put many of the union’s 5,000 hauling jobs at risk, including up to 1,500 in Michigan.

The companies, which both filed for bankruptcy this year, strongly deny they are trying to put union haulers out of business, but say rates must be competitive.

GM is in talks with its car haulers, who move vehicles from factories to dealers, because some contracts are set to expire. The Teamsters said GM demanded a 26 percent cost reduction from one union carrier.

As of Oct. 1, Chrysler said it had shifted 28 percent of its carhauling business from two companies: Atlanta-based Allied Systems Holdings and Illinois-based Cassens Transport Co.

Chrysler says the change will cost the jobs of 77 Teamster drivers in Michigan. Twenty of those jobs, however, will be filled by Ohio Teamsters. The union, which represents nearly 5,000 active car haulers, claims the job losses are higher: as many as 400 nationwide thus far.

In a fact sheet distributed on Capitol Hill, Chrysler said its actions will pare its $111 million in annual hauling costs by $31 million in three years and will improve transit time by an average of 23 percent.

The union plans protests at 70 GM and Chrysler dealerships today, including about 15 in Michigan, urging the automakers not to use cheaper, nonunion companies. The Teamsters also are unveiling a Web site,, to pressure automakers to stick with union haulers.

"The American taxpayers bailed out Chrysler with $14 billion of our hard-earned wages in order to help our economy," said a flier Teamsters will hand out in Michigan starting today.

"Chrysler took the money and now is outsourcing good Michigan car haul jobs to low-wage contractors in Ohio — throwing more Michigan families into the unemployment lines."

The decision to transfer work to Ohio irked some Michigan members of Congress, who sent protest letters to the automakers.

Among the members writing the companies in recent weeks are Sens. Debbie Stabenow, D-Lansing, and John Kerry, D-Mass., and Reps. John Dingell, D-Dearborn; Dale Kildee, D-Flint; Gary Peters, D-Bloomfield Township; Pete Hoekstra, R-Holland; Mark Schauer, D-Battle Creek; Thaddeus McCotter R-Livonia; and Sander Levin, D-Royal Oak. Michigan House Speaker Andy Dillon also wrote on the Teamsters’ behalf.

"The intent of the government’s support for GM and Chrysler and the ‘cash for clunkers’ program was to keep the automobile industry viable and not to force companies in the supply chain like the car haul industry into bankruptcy," McCotter said in an Oct. 2 letter similar to other congressional letters to Chrysler. "Relatively minor short-term cost savings generated by shifting this work to non-unionized companies is greatly outweighed by the elimination of good-paying, union middle-class jobs."

Chrysler spokeswoman Shawn Morgan said the company had been working with its car haulers for more than a year in efforts to make them more competitive. "We have to make solid business decisions that will allow us to pay back our loans to the taxpayers and be competitive," she said.

The automaker’s action was not, she said, a surprise or a "knee-jerk decision."

The car haulers’ controversy pales in comparison to dramatic cuts at Chrysler, where 29,000 hourly workers have left the company during restructuring in the past two years.

A United Auto Workers health care trust fund owns 67.7 percent of the new Chrysler, but doesn’t have control of the company.

GM is in contract talks with its union and nonunion car haulers.

"GM has no plans to phase out unionized hauling companies," said GM spokesman Dan Flores. "Open dialogue continues with the management teams at these companies."

Flores said the automaker’s aim "is to help solidify the most profitable business arrangements with our current providers and then to conduct a competitive bid process for the remaining business requirements."

Flores noted that "all of the companies in this process are U.S. owned and operated."

Teamsters are concerned that Ford Motor Co., the only one of Detroit’s three automakers to avoid bankruptcy, could go the same route if GM shifts business to cheaper nonunion carriers.

Ford spokesman Todd Nissen wouldn’t speculate on any future contract decisions. "We would want to be competitive with the industry so we can be competitive in our own costs," Nissen said.

Car haulers, like others in the auto industry, have struggled due to sharply lower sales; they, too, have been forced to consolidate.

Over the past year, more than 1,000 jobs have been shed in the car hauling business, said Fred Zuckerman, the Teamsters chief negotiator and car haul division director. He noted that Teamsters drivers at Allied, for example, agreed to a 17.5 percent wage cut.

There are 1,500 Teamster car haulers in Michigan, but only about 700 are working because of job cuts and layoffs.

"We have done whatever we could to help," Zuckerman said.

Shifting work to nonunion carriers, he said, threatens the rocky financial stability of the three largest car haulers that employ some 3,000 union drivers.

Last year, the Teamsters struck Allen Park-based Performance Transportation Services, then the nation’s No. 2 car hauler in the United States. The company went out of business."> (202) 662-8735

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