Gettelfinger led UAW into new era that redefined union
Gettelfinger led UAW into new era that redefined union
His legacy: Concessions to save industry
Ron Gettelfinger won’t soon forget Election Day 2008 because that’s when he learned the most important company to the United Auto Workers’ survival was broke.
"Steve Girsky was the guy that told me," the UAW president said in an interview this week at Solidarity House, just days before his scheduled retirement after eight years atop the union. "Set right here in this lobby … and he said: ‘I told my wife, remember this day, this is the day we learned General Motors was in bankruptcy.’ " Or headed there, to be exact.
But it was Gettelfinger’s job to lead the union through its toughest times since the bellwether strikes of the 1930s, this 21st-century confluence of accumulated bad habits, unprecedented economic events and political change that will make the Indiana native the most consequential UAW president since Walter Reuther.
"We made calls to banks, we did different things," Gettelfinger said. "But, yes, November the fourth of 2008, right here in this lobby, because at the time I was leaning very heavily on Girsky" — the former Wall Street analyst turned corporate adviser whom the UAW appointed to the General Motors Co. board on his way to becoming vice chairman.
To hear Gettelfinger tell it, modestly, he leaned on lots of people over his two terms as president: Girsky, who corroborates the Election Day exchange; UAW staffers, local presidents and bargaining committee members; company CEOs and chairmen, starting with Ford Motor Co.’s Bill Ford Jr., with each needing a partner to navigate the most dangerous times in generations.
"He never saw it as one side winning and the other side losing," Bill Ford said, calling Gettelfinger "exceptionally bright" and "very principled." He added: "There have been a lot of fundamental shifts … in the last several years and the labor agreement is one of those fundamental shifts."
Gettelfinger parries the praise: "It’s not me, it’s all of us. We did the absolute best that we possibly could, and I do believe that the economy is slowly rebounding. The industry is on very solid footing."
More so, certainly. Yet the automakers employ tens of thousands fewer. Market shares, save for Ford, are smaller. The membership of the UAW — 355,000 at the end of last year — is at its lowest point since the end of World War II. The federal government controls GM and Chrysler Group LLC in exchange for billions in taxpayer dollars to keep the companies and the union afloat.
Bailouts shape legacy
The bailouts, likely to define the Detroit industry for years to come, rescued more than two automakers from collapse. Twin bankruptcies and the workouts that followed averted mortal wounds to Gettelfinger’s UAW, a legacy of his that will endure even as it drives heated debate.
To critics, the ever-escalating demands of successive UAW contracts, the targeted strikes that interrupted the supplies of cars and parts to customers and the inability of the union to adapt to competitive threats from foreign rivals in the United States helped push Detroit to the brink of extinction.
Union members received a slight wage premium over counterparts at Toyota in Kentucky or Honda in Ohio. Their benefits were better, their pensions richer and all of it contributed to the financial stranglehold on Detroit’s automakers. And when seismic economic events threatened it all, a union-friendly president armed with taxpayer money came to the rescue.
The critics are right — to a point.
The union’s record under Gettelfinger isn’t one of recalcitrance and confrontation (notwithstanding prominent strikes against GM in Lansing and American Axle & Manufacturing Holdings Inc. in Detroit). It’s one of aggressive, and increasingly desperate, concessions to help Detroit’s automakers confront brutal reality.
"We were at the table in ’05," Gettelfinger said. "We went back in ’06. We were in negotiations in ’07. We went back in and made changes in ’08. And we went in twice in ’09 to each one of them. So that’s a lot of movement on the part of the union."
He’s right, too. Labor costs for Detroit’s automakers are dramatically lower today. New hires will be paid roughly half what the veterans now get. Defined-benefit pensions will be replaced with defined-contribution 401(k) plans. Active members pay more for their health care, and so do the legions of retirees.
Said John Casesa, a longtime Wall Street analyst and managing partner of Casesa & Co.: "Ron correctly sensed that Detroit would reach an inflection point during his term as president — that the money would run out — and so he was prepared enough to save the UAW when the crisis came."
Saving jobs drives contract
But the UAW, like the automakers, is being eviscerated to do it. By arguably the most crucial measure any union can muster — dues-paying members — the downward arc of the UAW’s decline accelerated during Gettelfinger’s tenure.
In 2001, the UAW reported 701,818 members in filings with the Labor Department. At the end of last year, which claimed 76,000 members, the union said its membership stood at 355,151 — a decline of 49.4 percent in eight years. Membership peaked in 1979 at 1.5 million.
The union president doesn’t flinch with his response: "The best contract in the world doesn’t mean anything if you don’t have a job."
Gettelfinger skeptics inside the UAW "can be critical of this decision or that decision, but we’re still here," said Mike Green, president of UAW Local 652 in Lansing. "The fact is we’re still here because of Ron Gettelfinger. We live to fight another day. The outcome could have been much worse."
Unquestionably. In late 2008 and into ’09, sentiment ran decidedly against Detroit’s automakers, the UAW and pouring more money — any money — into the industry’s capital-destroying maw. But for the intervention of Team Obama, a domino-like collapse into liquidation appeared likely.
Now? There’s hope and a path back. As he prepares to pass the gavel to Vice President Bob King — 45 years and six months to the day he hired into Ford and joined the union in 1964 — Gettelfinger sounds optimistic.
Sergio Marchionne is "the salvation for Chrysler" and will make "that company a success." GM’s Ed Whitacre is "very respectful" and "GM is coming on strong." Bill Ford is a singular leader who showed the courage to step down and woo CEO Alan Mulally from Boeing, "a stroke of genius."
Gettelfinger, says the Chrysler and Fiat SpA CEO Marchionne, "wants to fix the situation, permanently." He’s not the only one.
June 11, 2010