Big 3, UAW talks to define industry future

Last Updated: July 11. 2011 1:00AM
Big 3, UAW talks to define industry future
Union, auto companies must forge innovative contracts that fit new competitive reality
Bryce G. Hoffman and Christina Rogers/ The Detroit News
The 2011 contract talks slated to begin this month between Detroit’s Big Three automakers and the United Auto Workers will be about more than work rules or cost-of-living adjustments.
They will be a referendum on the new Detroit.
In 2009, the UAW agreed to game-changing concessions, ending jobs banks, streamlining work rules and freezing cost-of-living adjustments. These helped create the leaner and newly profitable industry that is again becoming an engine of economic growth, both for Michigan and the nation.
But the union made these concessions with Washington’s gun to its head. Workers never had an opportunity to vote on them — at least not at General Motors Co. and Chrysler Group LLC.
Now, those workers face a real choice: Do they try to turn back the clock and fight to regain what they gave up in 2009 and 2007, or do they figure out a new way forward that allows them to share in the automakers’ success without jeopardizing it?
Some are already organizing “vote no” campaigns, even though the contracts have yet to be negotiated.
The automakers also face a choice: Do they restore concessions to keep the peace, or do they hold the line on costs and do whatever is required to remain competitive?
“Michigan is at a historic crossroads,” UAW President Bob King said at the Mackinac Policy Conference last month. “The public is looking at us to see whether we’ve learned from the crisis or whether we go back to the same old way of doing things.”
This year, the old ways of doing things no longer apply.
All three Detroit automakers are keeping quiet in the lead-up to formal negotiations, but privately they all agree Washington’s intervention in the industry fundamentally altered the rules.
The deal the Obama administration imposed on the UAW during the industry bailout in 2009 prevents it from striking GM or Chrysler. Its only resort is binding arbitration.
Ford Motor Co., which did not take a taxpayer bailout, cannot force the union into binding arbitration like its crosstown rivals.
That means concepts such as strike targets are obsolete, said labor expert Harley Shaiken, a professor at the University of California, Berkeley, who has advised the UAW in the past.
“We’re in uncharted waters,” he said. “The past is only a very loose guide.”
Goal: Staying in the black
Even pattern bargaining may be a thing of the past. Sources at all three companies say GM, Ford and Chrysler are all in such different positions that a common one-size-fits-all approach no longer makes sense.
Chrysler is majority owned by a foreign automaker, GM is partly owned by the U.S. government, and Ford made it through the crisis on its own, without a bailout or bankruptcy.
King has signaled a willingness to work with the companies to craft contracts that would allow his members to share in their relative prosperity without adding significantly to their fixed costs. Think profit-sharing instead of wage increases.
The UAW boss believes the best way to guarantee jobs for his members is to keep the companies they work for in the black. He is keenly aware of how bad it would look for the UAW to be seen as kicking the Detroit automakers in the shin just as they are getting back on their feet.
King has said as much to local union leaders. Many of them seem to be preparing their members for a contract that limits guaranteed wage increases and cost-of-living adjustments, but would pay more generous bonuses as the automakers’ bottom lines improve. But union dissidents are already up in arms.
“I’ve lost over $30,000 a year from those concessions,” said Mary Springowski, an activist at Ford’s Ohio Assembly Plant in Avon Lake. “People want this stuff back. I want my time-and-a-half after eight hours back. If they can afford to give (Ford CEO) Alan Mulally, (Ford Americas President) Mark Fields and these other guys all this money, they can afford to do that.”
Some ready to vote ‘no’
At some plants, workers are already trying to organize opposition to the new contract before it has even been negotiated.
Nick Waun is one of them. The GM worker from Lordstown, Ohio, is a member of the Autoworkers Caravan, a dissident group that includes workers from all three Detroit auto manufacturers, as well as UAW retirees. He has been passing out leaflets and stickers calling for an elimination of the two-tier wage system that workers approved in 2007, reinstatement of the cost-of-living allowance and the rollback of other concessions.
“A lot of members say if they don’t see those two things, they’re going to vote ‘no’ on the contract,” he said.
Like Springowski, Waun opposes profit-sharing in lieu of wage increases. Workers, he said, want “solid, definable gains in their wages, rather than arbitrary bonuses determined by management.”
At Ford factories such as the Ohio Assembly Plant, workers approved concessions in 2009 to help keep the Dearborn automaker out of bankruptcy court. The UAW approved even deeper concessions at GM and Chrysler at the urging of the Obama administration as part of the government’s bailouts.
GM and Chrysler workers never got to vote on these givebacks. Groups including the Autoworkers Caravan tried to make their voices heard from the sidelines, but without success.
That is why Shaiken expects this year’s talks to be volatile. “I wouldn’t be surprised if we get into arbitration,” he said. “There will be locals that vote it down.”
Wall Street is watching developments in Detroit closely.
“In our opinion, the upcoming contract will involve a mix of politics, theater and economics,” said analyst Eric Selle, who follows the industry for JPMorgan Chase. “We expect for the UAW leaders to bang the war drum to rally the rank and file.
“However, we believe the potential for a protracted strike is low as the UAW’s VEBA (voluntary employees beneficiary association) trust owns equity, the White House faces risk from a strike, it hurts the UAW’s ability to organize transplants and the GM and Chrysler bankruptcy deals involved no strike clauses related to wages and benefits.”

From The Detroit News: http://detnews.com/article/20110711/AUTO01/107110331/Big-3–UAW-talks-to-define-industry-future#ixzz1Rsx1yJ7z

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