Story first appeared in the Detroit Free Press.
The UAW is continuing to negotiate with a General Motors supplier owned by the Ambassador Bridge's Moroun family, but union leaders are considering whether to protest or even strike the supplier's operations inside GM's Orion Township plant.
The union had planned to protest LINC Logistics on Wednesday morning, but called off those plans ahead of a renewed effort to make progress in contract negotiations. Talks continued into the evening Wednesday, said Pat Sweeney, president of Orion's UAW Local 5960. This would be the LINC employees' first union contract, Sweeney said.
The outcome will determine whether the UAW takes any action. A strike could disrupt production of the Chevrolet Sonic subcompact or the Buick Verano compact, which are built at the GM plant. LINC's employees, who work inside the GM factory, voted unanimously in June to strike if UAW leaders call for a walkout.
Negotiations have dragged on for months between the UAW and LINC, which organizes and distributes parts at automakers' plants. LINC workers currently make less than $10 an hour.
The Orion Township factory restarted production this year after getting a reprieve from GM's plan to close it as part of its 2009 bankruptcy. GM now employs about 1,600 hourly workers in Orion -- about 60% at the $28-an-hour first-tier wage and the rest at about $16 an hour. A couple of suppliers also have employees working inside the GM factory, in part thanks to space freed up by the plant's redesigned body shop.
Separately, the Orion Township factory had a small fire around 8 a.m. Wednesday in its body shop. GM called the fire department as a precautionary measure and evacuated the body shop, but restarted production by 9 a.m. The fire did not impact production and no one was injured.
Showing posts with label UAW. Show all posts
Showing posts with label UAW. Show all posts
09 December 2011
03 October 2011
Chrysler’s Workers Overwhelming In Favor of National Labor Contract
Story first appeared in the Detroit News.
Workers at Chrysler Group LLC's Global Engine Manufacturing Alliance plant in Dundee, near Splash Universe Dundee, have voted overwhelmingly in favor of a proposal to make their factory subject to the new national labor contract the company is negotiating with the United Auto Workers.
More than 99 percent of the votes were cast in favor of the plan. Only two workers voted against it, according to local union officials.
The vote was prompted in part by Chrysler's decision to implement a controversial rotating shift schedule that would require workers to alternate between days and nights.
Tom Zimmerman, plant chairman for UAW Local 723, said Chrysler has agreed to reconsider that plan now.
A labor expert comment that she thinks it's ultimately better for them to be a part of the national agreement, noting that GEMA workers will now have the right to relocate to other factories if there are job cuts at their facility. She added that it's easier for Chrysler too, because it makes things a lot simpler for the company."
The measure had been endorsed by UAW Vice President General Holiefield, head of the union's national Chrysler department.
The Dundee factory was not previously part of the national agreement because it was originally set up as a joint venture between Chrysler and two Asian automakers: Japan's Mitsubishi Motors Corp. and South Korea's Hyundai Motor Co.
Zimmerman said negotiations will begin shortly on a new local agreement that will address the shift schedule, which was due to begin next week.
Workers at Chrysler's Trenton Engine Complex have been working the grueling schedule since last year and are lobbying for it to be rescinded or changed.
If Chrysler and the UAW agree to the same language on alternative shift scheduling that was part of the recently approved contract between the union and General Motors Co., at least some relief could be in sight.
There would still be alternative work schedules allowed, as there is in the GM agreement, but there is a wide range of work schedules made possible by that language.
Workers at Chrysler Group LLC's Global Engine Manufacturing Alliance plant in Dundee, near Splash Universe Dundee, have voted overwhelmingly in favor of a proposal to make their factory subject to the new national labor contract the company is negotiating with the United Auto Workers.
More than 99 percent of the votes were cast in favor of the plan. Only two workers voted against it, according to local union officials.
The vote was prompted in part by Chrysler's decision to implement a controversial rotating shift schedule that would require workers to alternate between days and nights.
Tom Zimmerman, plant chairman for UAW Local 723, said Chrysler has agreed to reconsider that plan now.
A labor expert comment that she thinks it's ultimately better for them to be a part of the national agreement, noting that GEMA workers will now have the right to relocate to other factories if there are job cuts at their facility. She added that it's easier for Chrysler too, because it makes things a lot simpler for the company."
The measure had been endorsed by UAW Vice President General Holiefield, head of the union's national Chrysler department.
The Dundee factory was not previously part of the national agreement because it was originally set up as a joint venture between Chrysler and two Asian automakers: Japan's Mitsubishi Motors Corp. and South Korea's Hyundai Motor Co.
Zimmerman said negotiations will begin shortly on a new local agreement that will address the shift schedule, which was due to begin next week.
Workers at Chrysler's Trenton Engine Complex have been working the grueling schedule since last year and are lobbying for it to be rescinded or changed.
If Chrysler and the UAW agree to the same language on alternative shift scheduling that was part of the recently approved contract between the union and General Motors Co., at least some relief could be in sight.
There would still be alternative work schedules allowed, as there is in the GM agreement, but there is a wide range of work schedules made possible by that language.
27 September 2011
UAW-CHRYSLER NEGOTIATIONS AT A STANDOFF
Story first appeared in the Traverse City Record-Eagle.
Negotiations over a new four-year contract between Chrysler and the United Auto Workers have broken down as both sides refuse to budge on key financial issues, two people briefed on the bargaining said Thursday.
The talks ended late Wednesday in a dispute over the number of workers who are paid an entry-level wage, said the people, who asked not to be identified because the negotiations are private.
Chrysler Group LLC, which is losing money, wants no limit on cheaper entry-level workers. The union wants a cap on the number of those workers, who make $14 to $16 an hour, about half of what a longtime union employee earns.
Chrysler factories continue to operate under a contract extension.
Detroit’s three car makers are each negotiating labor agreements with the UAW.
Negotiations over a new four-year contract between Chrysler and the United Auto Workers have broken down as both sides refuse to budge on key financial issues, two people briefed on the bargaining said Thursday.
The talks ended late Wednesday in a dispute over the number of workers who are paid an entry-level wage, said the people, who asked not to be identified because the negotiations are private.
Chrysler Group LLC, which is losing money, wants no limit on cheaper entry-level workers. The union wants a cap on the number of those workers, who make $14 to $16 an hour, about half of what a longtime union employee earns.
Chrysler factories continue to operate under a contract extension.
Detroit’s three car makers are each negotiating labor agreements with the UAW.
12 July 2011
CAN THE UAW AND THE DETROIT BIG THREE FIND COMMON GROUND
Despite massive restructuring at the Detroit three since 2007, top union and company negotiators who kick off national labor talks later this month will be in for a difficult stretch as they race toward a Sept. 14 deadline on the current contract.
As many as six assembly plants face uncertain futures — three each at Ford and GM — and the automakers will still make an effort to cut labor costs that have already been dramatically slashed in recent years.
UAW and Detroit Three leaders may also find themselves at odds with rank-and-file autoworkers who feel they've already taken more than their fair share of cuts. Many are talking tough about winning back concessions.
One Ford employee said it has been over six or seven years since they have had a raise and complained the automaker just keeps taking away from them.
Throughout it all, the seasoned negotiators must be mindful of appearances after the highly politicized government-backed bankruptcies of General Motors and Chrysler. Neither side wants to look like it's slipping back into old ways.
The UAW's top agenda will be jobs. For them it is all about putting America back to work.
For GM and Ford, the talks will be about getting labor costs in line with foreign rivals.
Ford's hourly labor costs are at $58, compared with about $50 for Asian automakers in the U.S.
The carrot: Jobs
Automakers often use job commitments as leverage during contract talks, and that will happened again this year.
One difference this time around, however, is that in the past two years automakers have already announced 13,000 U.S. jobs are coming, even before the start of formal negotiations.
In June, Chrysler said it would add 268 jobs at its Trenton North engine plant.
In May, GM said it would create or retain about 4,000 jobs in eight states over the next 18 months.
GM commented that these were investments that were done to continue to move their business forward, and should not be read as negotiating tactics.
Despite those announcements, many of the 1,700 Ford workers in Flat Rock are worried about Mazda's decision to end production of the Mazda 6.
One assembly worker comment that this is a little scary, and they would like to get their concessions back, but definitely job security is more important.
And in St. Paul, Minn., where Ford plans to discontinue the Ranger pickup in December, the mood for about 750 workers is also grim.
Estimates are that three plants each at Ford and GM are in danger of eventual closure or of not being reopened.
For Ford, those plants are in Minnesota, Flat Rock and Avon Lake, Ohio. Ford makes the ever-popular Econoline van at Ohio Assembly but could make the next-generation model at another plant.
Meanwhile, the UAW has been publicly pressuring GM to keep its pickup truck plant in Shreveport, La., open and re-open plants in Spring Hill, Tenn., and Janesville, Wis., that have been on standby since the bankruptcy in 2009.
GM could move production of the GMC Canyon and Chevrolet Colorado from Shreveport to a plant in Wentzville, Mo. That would help fill the capacity of the Wentzville plant, which is operating on one shift.
Even if the plants closed, many UAW workers would be able to keep their jobs by accepting the already-announced new positions in other locations, although they'd likely have to move to another state to take them.
'Vying for new work'
To be sure, the danger of plant closures and job disruption is lower than in 2007, when automakers were losing billions and their labor costs were far higher than Asian rivals.
But the dramatic restructuring over the last several years has left many plants with underutilized space.
In Brook Park, Ohio, UAW Local 1250 is hoping Ford's engine plant is picked for a four-cylinder version of the EcoBoost engine. That could bring 300 more jobs to the plant.They are a strong advocate that it should be built in Cleveland, but every other plant is vying for new work.
As the UAW fights for jobs, and the automakers work to lower labor costs, the two sides could find common ground.
That's because the automakers can lower their labor costs by hiring new workers an entry-level wage rate of $14 and $16 per hour, thereby lowering their average labor cost per worker.
Under the current contract GM and Chrysler can hire an unlimited number of entry-level workers until 2015 while Ford's contract is capped at 20 percent.
Already, Chrysler has lowered its total labor costs more than Ford and GM because it has filled many of the more than 2,800 jobs it has announced since June 2009 with entry-level workers.
That has helped Chrysler cut its total labor costs per worker from nearly $76 per hour in 2006 to $49 per hour in 2010.
Ford could reduce its total hourly labor costs by as much as $3 per hour to $55 per hour if it hires the maximum amount of entry-level workers allowed under its current contract. But it cannot do that unless older workers retire, and many are reluctant to do so given Ford's success, which comes with annual bonuses.
The UAW plans to push for an increase in the entry-level wage, which is about half of the regular $28 per hour. They feel entry-level may not be a good middle-class standard of living today, so they want to figure out a way to get more income to those workers.
As many as six assembly plants face uncertain futures — three each at Ford and GM — and the automakers will still make an effort to cut labor costs that have already been dramatically slashed in recent years.
UAW and Detroit Three leaders may also find themselves at odds with rank-and-file autoworkers who feel they've already taken more than their fair share of cuts. Many are talking tough about winning back concessions.
One Ford employee said it has been over six or seven years since they have had a raise and complained the automaker just keeps taking away from them.
Throughout it all, the seasoned negotiators must be mindful of appearances after the highly politicized government-backed bankruptcies of General Motors and Chrysler. Neither side wants to look like it's slipping back into old ways.
The UAW's top agenda will be jobs. For them it is all about putting America back to work.
For GM and Ford, the talks will be about getting labor costs in line with foreign rivals.
Ford's hourly labor costs are at $58, compared with about $50 for Asian automakers in the U.S.
The carrot: Jobs
Automakers often use job commitments as leverage during contract talks, and that will happened again this year.
One difference this time around, however, is that in the past two years automakers have already announced 13,000 U.S. jobs are coming, even before the start of formal negotiations.
In June, Chrysler said it would add 268 jobs at its Trenton North engine plant.
In May, GM said it would create or retain about 4,000 jobs in eight states over the next 18 months.
GM commented that these were investments that were done to continue to move their business forward, and should not be read as negotiating tactics.
Despite those announcements, many of the 1,700 Ford workers in Flat Rock are worried about Mazda's decision to end production of the Mazda 6.
One assembly worker comment that this is a little scary, and they would like to get their concessions back, but definitely job security is more important.
And in St. Paul, Minn., where Ford plans to discontinue the Ranger pickup in December, the mood for about 750 workers is also grim.
Estimates are that three plants each at Ford and GM are in danger of eventual closure or of not being reopened.
For Ford, those plants are in Minnesota, Flat Rock and Avon Lake, Ohio. Ford makes the ever-popular Econoline van at Ohio Assembly but could make the next-generation model at another plant.
Meanwhile, the UAW has been publicly pressuring GM to keep its pickup truck plant in Shreveport, La., open and re-open plants in Spring Hill, Tenn., and Janesville, Wis., that have been on standby since the bankruptcy in 2009.
GM could move production of the GMC Canyon and Chevrolet Colorado from Shreveport to a plant in Wentzville, Mo. That would help fill the capacity of the Wentzville plant, which is operating on one shift.
Even if the plants closed, many UAW workers would be able to keep their jobs by accepting the already-announced new positions in other locations, although they'd likely have to move to another state to take them.
'Vying for new work'
To be sure, the danger of plant closures and job disruption is lower than in 2007, when automakers were losing billions and their labor costs were far higher than Asian rivals.
But the dramatic restructuring over the last several years has left many plants with underutilized space.
In Brook Park, Ohio, UAW Local 1250 is hoping Ford's engine plant is picked for a four-cylinder version of the EcoBoost engine. That could bring 300 more jobs to the plant.They are a strong advocate that it should be built in Cleveland, but every other plant is vying for new work.
As the UAW fights for jobs, and the automakers work to lower labor costs, the two sides could find common ground.
That's because the automakers can lower their labor costs by hiring new workers an entry-level wage rate of $14 and $16 per hour, thereby lowering their average labor cost per worker.
Under the current contract GM and Chrysler can hire an unlimited number of entry-level workers until 2015 while Ford's contract is capped at 20 percent.
Already, Chrysler has lowered its total labor costs more than Ford and GM because it has filled many of the more than 2,800 jobs it has announced since June 2009 with entry-level workers.
That has helped Chrysler cut its total labor costs per worker from nearly $76 per hour in 2006 to $49 per hour in 2010.
Ford could reduce its total hourly labor costs by as much as $3 per hour to $55 per hour if it hires the maximum amount of entry-level workers allowed under its current contract. But it cannot do that unless older workers retire, and many are reluctant to do so given Ford's success, which comes with annual bonuses.
The UAW plans to push for an increase in the entry-level wage, which is about half of the regular $28 per hour. They feel entry-level may not be a good middle-class standard of living today, so they want to figure out a way to get more income to those workers.
17 October 2010
UAW Workers protest Leaders
The Detroit Free Press
Orion plant's 2-tier wage deal draws members from 3 states
Union members who protested at the UAW's headquarters in Detroit on Saturday said they are worried that a contract for General Motors' plant in Orion Township sets a precedent that will be used to broaden the use of a lower, tier-two wage at other plants.
More than 100 UAW workers and retirees came from Indiana, Ohio and across Michigan to protest against UAW leadership, who they believe are out of touch with members' concerns.
"I am hoping that they feel some type of embarrassment that we have to come out to Solidarity House in order for them to hear our message," said Nick Waun, 31, of Lapeer, who works at the Orion plant and helped organize the rally.
Planning for the demonstration began after workers were told Oct. 3 of a deal between the UAW and GM that calls for 40% of the workers at the Orion plant to be paid the lower wage, which is about half the $28 that tier-one workers make.
Waun said that if he refuses an offer from GM to transfer to the Lordstown, Ohio, plant, where the Chevy Cruze is built, he would remain laid off and retain his right to be called back to Orion at the lower second-tier wage.
"I am not going to turn it down, because I can't afford to give up my income," Waun said.
In an interview Saturday, UAW President Bob King explained that the UAW and GM reached the special local agreement so the Orion plant -- which had been selected for closure last year -- could make a subcompact car profitably. That small car had previously been slated for production in South Korea.
"We have made it very, very clear that this is only for a small car," King said after speaking at a political rally for Democratic gubernatorial candidate Virg Bernero in Warren.
"If we brought a truck into Orion, that would be at the traditional wages, so this is not going to go to other plants unless we are able to bring a (subcompact) car into Ford or Chrysler that we don't currently have. We might look at something similar for that situation. But as far as traditional products, those are going to stay under the current agreement."
King said workers have a right to appeal the agreement but argues that the Orion Township agreement was consistent with the UAW's national labor agreement.
"Ultimately, we will have a plant, and if General Motors does very well ... then we will have the opportunity to make gains in the future for our membership," King said. "If you don't have a plant, then you can't make the gains."
Despite efforts by the union and GM to paint Orion as a special circumstance, concern remains.
"This is a precedent," said Gregg Shotwell, co-founder of the Soldiers of Solidarity, a UAW dissident group. "This indicates where the UAW is heading going into negotiations in 2011."
Gregory Clark, chairman of UAW Local 23 in Indianapolis, sees parallels between the Orion deal and the situation his workers faced at a GM stamping plant in Indianapolis. Last month, workers there defeated a union contract negotiated with a potential plant buyer that would have cut unskilled workers' wages almost in half.
"It is definitely a pattern. ... They will whipsaw Orion against the next facility," Clark said.
"If they can do this to the Orion workers, they can do this to everyone," said Gary Walkowicz, a bargaining committeeman from UAW Local 600 in Dearborn. He also fought to defeat modifications of Ford's national contract last fall. At Orion, UAW officials have said that they don't expect any workers who make the standard $28 wage to be forced to accept the lower, second-tier wage. However, that depends on nearly 300 workers with 29 years of experience accepting early retirement, and on some workers transferring to other plants.
More than 100 UAW workers and retirees came from Indiana, Ohio and across Michigan to protest against UAW leadership, who they believe are out of touch with members' concerns.
"I am hoping that they feel some type of embarrassment that we have to come out to Solidarity House in order for them to hear our message," said Nick Waun, 31, of Lapeer, who works at the Orion plant and helped organize the rally.
Planning for the demonstration began after workers were told Oct. 3 of a deal between the UAW and GM that calls for 40% of the workers at the Orion plant to be paid the lower wage, which is about half the $28 that tier-one workers make.
Waun said that if he refuses an offer from GM to transfer to the Lordstown, Ohio, plant, where the Chevy Cruze is built, he would remain laid off and retain his right to be called back to Orion at the lower second-tier wage.
"I am not going to turn it down, because I can't afford to give up my income," Waun said.
In an interview Saturday, UAW President Bob King explained that the UAW and GM reached the special local agreement so the Orion plant -- which had been selected for closure last year -- could make a subcompact car profitably. That small car had previously been slated for production in South Korea.
"We have made it very, very clear that this is only for a small car," King said after speaking at a political rally for Democratic gubernatorial candidate Virg Bernero in Warren.
"If we brought a truck into Orion, that would be at the traditional wages, so this is not going to go to other plants unless we are able to bring a (subcompact) car into Ford or Chrysler that we don't currently have. We might look at something similar for that situation. But as far as traditional products, those are going to stay under the current agreement."
King said workers have a right to appeal the agreement but argues that the Orion Township agreement was consistent with the UAW's national labor agreement.
"Ultimately, we will have a plant, and if General Motors does very well ... then we will have the opportunity to make gains in the future for our membership," King said. "If you don't have a plant, then you can't make the gains."
Despite efforts by the union and GM to paint Orion as a special circumstance, concern remains.
"This is a precedent," said Gregg Shotwell, co-founder of the Soldiers of Solidarity, a UAW dissident group. "This indicates where the UAW is heading going into negotiations in 2011."
Gregory Clark, chairman of UAW Local 23 in Indianapolis, sees parallels between the Orion deal and the situation his workers faced at a GM stamping plant in Indianapolis. Last month, workers there defeated a union contract negotiated with a potential plant buyer that would have cut unskilled workers' wages almost in half.
"It is definitely a pattern. ... They will whipsaw Orion against the next facility," Clark said.
"If they can do this to the Orion workers, they can do this to everyone," said Gary Walkowicz, a bargaining committeeman from UAW Local 600 in Dearborn. He also fought to defeat modifications of Ford's national contract last fall. At Orion, UAW officials have said that they don't expect any workers who make the standard $28 wage to be forced to accept the lower, second-tier wage. However, that depends on nearly 300 workers with 29 years of experience accepting early retirement, and on some workers transferring to other plants.
25 September 2010
Jalopnik: Obsessed with the Cult of Cars
Workers from a Detroit Chrysler plant visited by President Obama two months ago were busted today for drinking and smoking pot on their lunch break. Although they're now suspended, a former employee tells us it won't change a thing.The Jefferson North Assembly Plant is Chrysler's flagship manufacturing facility. The plant, home to production of the all-new 2011 Jeep Grand Cherokee, was visited by President Obama in July — just five days before an investigation by Fox 2 Detroit began that unveiled auto worker's engaging in the blue collar equivalent of the three martini lunch. When President Obama visited this plant that's supposed to represent the "new" Chrysler, he told America
"I believed that if each of us were willing to work and sacrifice in the short term — workers, management, creditors, shareholders, retirees, communities — it could mark a new beginning for a great American industry. And if we could summon that sense of teamwork and common purpose, we could once again see the best cars in the world designed, engineered, forged, and built right here in Detroit, right here in the Midwest, right here in the United States of America."
Unfortunately, a few of their employees look to still be stuck in old school stereotypes about organized labor.
The investigative report found a dozen employees were taking the 30-minute shift break they have at 11:00 am to drive to a public park and pound 40-oz beers, smoke weed, or do both at the same time. They then get in their cars, drive back to the plant presumably under the influence, and continue manufacturing cars.
Chrysler's Senior VP of Manufacturing, Scott Garberding, told Fox 2 saying they've suspended workers without pay pending the outcome of an investigation:
I want to make it clear that we at Chrysler take it very seriously. For us this behavior is totally unacceptable and will be dealt with swiftly. In fact, we've already identified a few of the people involved in this incident. Each of them has been suspended indefinitely, without pay, pending further investigation.
Unfortunately, this may not do much to change the culture of auto workers, says one longtime auto worker who spoke to us about the video.
"The problem is not really the drinking per se. The problem is when it happens the UAW turns a blind eye," says the Detroit resident who used to work in automobile manufacturing but wished to not be identified because of his close family ties to the United Auto Workers and friends still in the industry.
"My first week on the job I was teaching some classes at this plant, and the breaktime bell goes off to wake up the guys so they can take a break," he explains. "The trailer [I was in] was parked up right next to the plant window and I see this head go by, and it was this guy snorting coke back there. That was my first experience."
Like many Detroit residents, his two uncles and father were all UAW members and auto workers. But whereas his dad and older uncle were well respected, his younger uncle would constantly show up to work intoxicated or not show up at all. Because of the respect other workers had for his dad and uncle he was never seriously punished or even sent to drug rehab for his own protection.
"Once my uncle passed away, my youngest uncle said 'I better retire' because he knew his older brother wouldn't be there to stick up for him."
"I remember seeing people get fired and would be shocked, and be like 'Oh my God' and some of the people who have been there longer are like 'don't worry, they'll be back,'" He told us. "Usually it was a few day suspension to put on a dog and pony show. They just turn a blind eye after a while.What some of these guys need is alcohol treatment programs."
The UAW, to its credit, issued a statement disapproving of the activity. Unfortunately, it also didn't offer to do anything about it or seem in any way regretful for the worker behavior:
The UAW strongly opposes the use of controlled substances or alcohol use on the job. This type of behavior jeopardizes the health and safety of all employees. We also recognize that, unfortunately, these behaviors exist in our society.
The UAW and the Chrysler Corporation work together to keep our workplaces drug and alcohol free, and to encourage employees with substance abuse problems to get the treatment they need. The employees involved in this situation do not represent the vast majority of workers at Chrysler who do a great job making high quality vehicles in some of the most productive manufacturing facilities in the United States.
Sure, yeah, it does represent a danger to the other workers, but what about the people driving Jeeps built by drunk/high workers?
Like a lot of people in the industry, the former employee who spoke to us said he supports the UAW and the Big 3 but recognizes there's a major problem.
"I love the auto inudstry, i love everything about it... I grew up eating/sleeping breathing cars. I really just would like to see things change."
Just as the three-martini lunch is sadly no longer accepted in white collar America, so too, the pot-and-beer lunch is no longer accepted for blue collar America.
27 August 2010
Autoworkers Adjust to Life Without Jobs Bank as GM, Ford Seek to Rebound
Bloomberg
General Motors Co. gave Kevin Dorey’s father a paycheck for 34 years, kept him working near home and let him out in time for his kids’ football games.
“‘It’s steady’ -- that’s what my dad always told me about General Motors,” Dorey, 44, said over chicken wings and beer at the Beef ‘O’ Brady’s sports bar in his hometown of Saginaw Township, Michigan. “For me, it’s been anything but steady.”
Kevin Dorey worked at three plants in three years until his most recent location in Orion Township, Michigan, which required a 90-minute commute, closed in November. Previously, he would have received full pay during the layoff while GM revamped the factory for a new car. The United Auto Workers agreed last year to give up that benefit, known as the jobs bank, and the paychecks stopped coming in July.
Less employment security, lower starting pay and stricter work rules signal a new era for the jobs viewed as a ticket to the middle class since Henry Ford’s $5-a-day wage in 1914. The changes also mean GM, Chrysler Group LLC and Ford Motor Co. are free of the obligations that helped sink the industry in 2009 and can make money with lower sales volumes.
UAW President Bob King said in June that he’ll seek to win back benefits and rebuild the union’s power when contract negotiations begin next year. Automakers may seek even more concessions as sales remain close to a 30-year low.
In the meantime, autoworkers are adjusting to a new way of life in an industry where deliveries fell to 10.4 million vehicles in 2009, the lowest level since 1982, the year Dorey got his driver’s license. Sales averaged 16.8 million a year from 2000 to 2007.
Distant Transfers
Pedro Gonzales accepted a transfer in May from a GM plant in Pontiac, Michigan, to one in Lordstown, Ohio, to avoid a long layoff and slipping to the bottom of the list of workers to be recalled under new union rules.
For two months, he and three other workers stayed in a hotel and a two-bedroom apartment, where he slept on an air mattress in the living room. On weekends, he drove more than four hours to see his wife, mother and five children before moving them to Ohio this month.
“The people here are nice, and the work seems stable, so I decided to stay,” said Gonzales, 42, who assembles instrument panels for the Chevrolet Cruze small car. “I don’t want to move my family again.”
Rejecting Transfers
Workers previously were able to turn down transfers farther than 50 miles from their plant and remain in the jobs bank, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Michigan. There would have been 20,000 workers in the jobs bank at the start of 2010 if the program still existed, he said.
Laid-off employees with fewer than 10 years of experience now get partial pay for 26 weeks, while those who’ve worked longer can get paid for as much as a year. Workers then move to a transition support program, about equal to collecting unemployment, for an additional 26 weeks to one year, McAlinden said.
Wages also are declining, with new hourly production workers starting at $14 an hour instead of $28. The combined cuts reduced Detroit-based GM’s average labor cost to $58 an hour from $74 two years ago, McAlinden said. The new $14-an-hour workers, which could account for 20 percent of the labor force eventually, will drive GM, Ford and Chrysler’s hourly costs below the $56 for Toyota Motor Corp.’s most senior U.S. hourly workers, he said.
‘Solidly Profitable’
GM is now positioned to break even during troughs in demand, Chief Executive Officer Ed Whitacre, who will cede the title to Daniel Akerson next month, said in June. Ford, based in Dearborn, Michigan, will be “solidly profitable” in 2010, CEO Alan Mulally has said.
Those improved prospects are setting up a fight during contract talks in 2011. Ford, the only U.S. automaker that didn’t file for bankruptcy or receive government assistance last year, is seeking parity with GM and Auburn Hills, Michigan-based Chrysler, which won a freeze on wages for new hires until 2015 and a prohibition on some strikes for five years.
The union wants automakers to restore some of the pay raises, annual bonuses and cost-of-living adjustments it surrendered to keep the companies afloat last year.
“It’s really important to understand and stress that all the auto companies were profitable and successful paying the wages and benefits they did when they had good product and product the customer wanted,” King said in an interview at the UAW’s Solidarity House headquarters in Detroit. He declined to specify which benefits he’d seek in the negotiations and said he didn’t think it was possible to get back everything the union gave up.
Union leaders likely will be successful in clawing back some compensation and benefits, said Bob Schulz, an auto analyst for Standard & Poor’s.
“It’s going to raise costs, it’s just a question of how and how much,” he said.
‘Time Warp’
Union leaders and workers looking to win back concessions are stuck in a “time warp,” said David Littmann, senior economist for the Mackinac Center for Public Policy, a research organization in Midland, Michigan, that promotes free-market principles.
“They want to make things the way they were, and they’re not,” Littmann said.
The jobs bank, which had a combined 25,000 Ford, GM and Chrysler workers at its peak in the early 1990s, was originally designed to retain trained workers who were temporarily displaced by productivity or business cycles. The program later became a symbol of the benefits union workers received as the U.S. government debated approving funds to save the industry.
“It became the welfare mother who drives a Cadillac,” said Harley Shaiken, a labor professor at the University of California-Berkeley. “It became the symbol of what was wrong with welfare.”
The program’s stigma and the nation’s 9.5 percent unemployment rate will make it difficult for the union to win back some benefits, he said.
Dorey, who said he was never in the jobs bank, said he probably will be on the second shift when production at the Orion plant restarts next year. He’ll start work in the mid- afternoon and won’t get home until 4 a.m., leaving the divorced father little time to spend with his 11-year-old son.
“He’s at that point where we do a lot together,” Dorey said. “If I’m working second shift, how is that even possible?”
“‘It’s steady’ -- that’s what my dad always told me about General Motors,” Dorey, 44, said over chicken wings and beer at the Beef ‘O’ Brady’s sports bar in his hometown of Saginaw Township, Michigan. “For me, it’s been anything but steady.”
Kevin Dorey worked at three plants in three years until his most recent location in Orion Township, Michigan, which required a 90-minute commute, closed in November. Previously, he would have received full pay during the layoff while GM revamped the factory for a new car. The United Auto Workers agreed last year to give up that benefit, known as the jobs bank, and the paychecks stopped coming in July.
Less employment security, lower starting pay and stricter work rules signal a new era for the jobs viewed as a ticket to the middle class since Henry Ford’s $5-a-day wage in 1914. The changes also mean GM, Chrysler Group LLC and Ford Motor Co. are free of the obligations that helped sink the industry in 2009 and can make money with lower sales volumes.
UAW President Bob King said in June that he’ll seek to win back benefits and rebuild the union’s power when contract negotiations begin next year. Automakers may seek even more concessions as sales remain close to a 30-year low.
In the meantime, autoworkers are adjusting to a new way of life in an industry where deliveries fell to 10.4 million vehicles in 2009, the lowest level since 1982, the year Dorey got his driver’s license. Sales averaged 16.8 million a year from 2000 to 2007.
Distant Transfers
Pedro Gonzales accepted a transfer in May from a GM plant in Pontiac, Michigan, to one in Lordstown, Ohio, to avoid a long layoff and slipping to the bottom of the list of workers to be recalled under new union rules.
For two months, he and three other workers stayed in a hotel and a two-bedroom apartment, where he slept on an air mattress in the living room. On weekends, he drove more than four hours to see his wife, mother and five children before moving them to Ohio this month.
“The people here are nice, and the work seems stable, so I decided to stay,” said Gonzales, 42, who assembles instrument panels for the Chevrolet Cruze small car. “I don’t want to move my family again.”
Rejecting Transfers
Workers previously were able to turn down transfers farther than 50 miles from their plant and remain in the jobs bank, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Michigan. There would have been 20,000 workers in the jobs bank at the start of 2010 if the program still existed, he said.
Laid-off employees with fewer than 10 years of experience now get partial pay for 26 weeks, while those who’ve worked longer can get paid for as much as a year. Workers then move to a transition support program, about equal to collecting unemployment, for an additional 26 weeks to one year, McAlinden said.
Wages also are declining, with new hourly production workers starting at $14 an hour instead of $28. The combined cuts reduced Detroit-based GM’s average labor cost to $58 an hour from $74 two years ago, McAlinden said. The new $14-an-hour workers, which could account for 20 percent of the labor force eventually, will drive GM, Ford and Chrysler’s hourly costs below the $56 for Toyota Motor Corp.’s most senior U.S. hourly workers, he said.
‘Solidly Profitable’
GM is now positioned to break even during troughs in demand, Chief Executive Officer Ed Whitacre, who will cede the title to Daniel Akerson next month, said in June. Ford, based in Dearborn, Michigan, will be “solidly profitable” in 2010, CEO Alan Mulally has said.
Those improved prospects are setting up a fight during contract talks in 2011. Ford, the only U.S. automaker that didn’t file for bankruptcy or receive government assistance last year, is seeking parity with GM and Auburn Hills, Michigan-based Chrysler, which won a freeze on wages for new hires until 2015 and a prohibition on some strikes for five years.
The union wants automakers to restore some of the pay raises, annual bonuses and cost-of-living adjustments it surrendered to keep the companies afloat last year.
“It’s really important to understand and stress that all the auto companies were profitable and successful paying the wages and benefits they did when they had good product and product the customer wanted,” King said in an interview at the UAW’s Solidarity House headquarters in Detroit. He declined to specify which benefits he’d seek in the negotiations and said he didn’t think it was possible to get back everything the union gave up.
Union leaders likely will be successful in clawing back some compensation and benefits, said Bob Schulz, an auto analyst for Standard & Poor’s.
“It’s going to raise costs, it’s just a question of how and how much,” he said.
‘Time Warp’
Union leaders and workers looking to win back concessions are stuck in a “time warp,” said David Littmann, senior economist for the Mackinac Center for Public Policy, a research organization in Midland, Michigan, that promotes free-market principles.
“They want to make things the way they were, and they’re not,” Littmann said.
The jobs bank, which had a combined 25,000 Ford, GM and Chrysler workers at its peak in the early 1990s, was originally designed to retain trained workers who were temporarily displaced by productivity or business cycles. The program later became a symbol of the benefits union workers received as the U.S. government debated approving funds to save the industry.
“It became the welfare mother who drives a Cadillac,” said Harley Shaiken, a labor professor at the University of California-Berkeley. “It became the symbol of what was wrong with welfare.”
The program’s stigma and the nation’s 9.5 percent unemployment rate will make it difficult for the union to win back some benefits, he said.
Dorey, who said he was never in the jobs bank, said he probably will be on the second shift when production at the Orion plant restarts next year. He’ll start work in the mid- afternoon and won’t get home until 4 a.m., leaving the divorced father little time to spend with his 11-year-old son.
“He’s at that point where we do a lot together,” Dorey said. “If I’m working second shift, how is that even possible?”
17 August 2010
UAW President Finds Perfect Candidate in Virg Bernero
MLive
Behind most high-level political candidates are kingmakers — people you might not know very well but who shape agendas and wield a great deal of influence in election campaigns.
In Lansing Mayor Virg Bernero’s improbable quest to become Michigan’s next governor, new United Auto Workers President Bob King is deftly playing the role of political power broker.
Behind in the polls just days before the Aug. 3 primary, Bernero captured the Democratic nomination for governor by portraying himself as the champion of the blue-collar worker who was mad as hell and not going to take it anymore.
And stoking Bernero’s “angry mayor” persona was King, who, by some accounts, is now calling many of the shots in the campaign.
Some say this could be the last stand of organized labor, which has seen its membership, cash and political clout dwindle over the past decade.
“Organized labor has an awful lot to lose in this election,” said Craig Ruff, senior policy fellow at Public Sector Consultants in Lansing.
Installed as the UAW’s president in June, King is vowing to revitalize the labor movement, which took a serious hit in the Great Recession.
King’s first public act as president was to lead a march in downtown Detroit, protesting Wall Street greed that he blamed for triggering a financial meltdown that pushed General Motors Co. and Chrysler Group LLC into bankruptcy.
King may have found the perfect candidate in Bernero, who has made Wall Street the bogeyman in his quest for the governor’s seat.
“I will never stand for working people being thrown under the bus while Wall Street makes out like bandits,” Bernero said in his primary election victory speech.
Bernero also railed against government for its enactment of trade policies he said have resulted in the outsourcing of hundreds of thousands of middle-class jobs.
But his main target was “The Man,” greedy corporate interests that have profited mightily from the fruits of working-class labor.
It shouldn’t come as a big surprise that his message resonated with voters and catapulted him into a November match-up against Republican Rick “The Nerd” Snyder.
Michigan lost nearly 1 million jobs during the Great Recession, about one of every four jobs in the state.
Multiply the losses by the number of folks hurt by those lost jobs — spouses, children and extended family — and you have millions of disaffected people in this state.
Bernero’s challenge will be in continuing to capitalize on the frustration of those who lost jobs while showing he can promote the interests of the Michigan employers who shed those jobs.
King faces a similar balancing act.
He struck a conciliatory tone in a recent speech, saying “there is no group of people more committed to the success of the auto industry than the union and our members.”
It will be interesting to see whether Bernero likewise softens his high-decibel rhetoric in the fall campaign. If he does, you can likely attribute it to King’s influence.
In Lansing Mayor Virg Bernero’s improbable quest to become Michigan’s next governor, new United Auto Workers President Bob King is deftly playing the role of political power broker.
Behind in the polls just days before the Aug. 3 primary, Bernero captured the Democratic nomination for governor by portraying himself as the champion of the blue-collar worker who was mad as hell and not going to take it anymore.
And stoking Bernero’s “angry mayor” persona was King, who, by some accounts, is now calling many of the shots in the campaign.
Some say this could be the last stand of organized labor, which has seen its membership, cash and political clout dwindle over the past decade.
“Organized labor has an awful lot to lose in this election,” said Craig Ruff, senior policy fellow at Public Sector Consultants in Lansing.
Installed as the UAW’s president in June, King is vowing to revitalize the labor movement, which took a serious hit in the Great Recession.
King’s first public act as president was to lead a march in downtown Detroit, protesting Wall Street greed that he blamed for triggering a financial meltdown that pushed General Motors Co. and Chrysler Group LLC into bankruptcy.
King may have found the perfect candidate in Bernero, who has made Wall Street the bogeyman in his quest for the governor’s seat.
“I will never stand for working people being thrown under the bus while Wall Street makes out like bandits,” Bernero said in his primary election victory speech.
Bernero also railed against government for its enactment of trade policies he said have resulted in the outsourcing of hundreds of thousands of middle-class jobs.
But his main target was “The Man,” greedy corporate interests that have profited mightily from the fruits of working-class labor.
It shouldn’t come as a big surprise that his message resonated with voters and catapulted him into a November match-up against Republican Rick “The Nerd” Snyder.
Michigan lost nearly 1 million jobs during the Great Recession, about one of every four jobs in the state.
Multiply the losses by the number of folks hurt by those lost jobs — spouses, children and extended family — and you have millions of disaffected people in this state.
Bernero’s challenge will be in continuing to capitalize on the frustration of those who lost jobs while showing he can promote the interests of the Michigan employers who shed those jobs.
King faces a similar balancing act.
He struck a conciliatory tone in a recent speech, saying “there is no group of people more committed to the success of the auto industry than the union and our members.”
It will be interesting to see whether Bernero likewise softens his high-decibel rhetoric in the fall campaign. If he does, you can likely attribute it to King’s influence.
17 June 2010
New UAW Chief Says Organizing Toyota a Top Priority
Reuters
The new head of the United Auto Workers on Thursday vowed to "pound Toyota" as part of a stepped-up campaign to bring union representation to factories operated by Asian automakers in the United States.
UAW President Bob King vowed to bring protesters, including retirees, to picket outside Toyota dealerships with banners charging that the automaker puts "Profits Before People."
"We're going to pound on Toyota until they recognize the First-Amendment rights of workers to come into the UAW," King told over 1,000 union delegates at a convention in Detroit.
Toyota and the UAW are at odds because of a decision by the Japanese automaker to close a Fremont, California plant that it had been operating in partnership with General Motors Co.
That plant, where workers had UAW representation, had produced the Corolla and Tacoma models for Toyota.
In a move that further angered the union, Toyota announced on Thursday that it would shift production of the Corolla sedan to a still-unfinished plant in Mississippi.
King said Toyota was looking to cut labor costs and free itself from union representation. He said the UAW would lobby to have the decision on Corolla reversed at the same time that it pushes to organize other Toyota factories.
"It's outrageous," King said of Toyota's decision to shift Corolla production to Mississippi. "If they're going to act that way, we're going to respond."
A Toyota spokesman could not be immediately reached for comment.
NO RECORD OF SUCCESS
The UAW has never succeeded in organizing a major U.S. auto factory apart from those run by the domestic manufacturers -- General Motors, Ford Motor Co (F.N) and Chrysler.
A push to organize Toyota's flagship U.S. factory in Georgetown, Kentucky fizzled in 2007. The union also failed on four separate votes going back to 1989 to win support for a union at a major Nissan factory in Tennessee.
"The only luck we've had has been bad luck," King said.
Toyota's emergence as the largest global automaker in recent years heightened the stakes for the union and its recent safety crisis made it appear vulnerable, union officials say.
King said the UAW would push ahead with a bid to organize Toyota whether or not a bill that would make it easier to establish unions known as the Employee Free Choice Act clears Congress.
Asian auto brands led by Toyota now represent about 46 percent of U.S. auto sales, a larger slice of the market than the Detroit Three combined.
King said that without expanding its base to include workers at Asian "transplant" factories run by the likes of Toyota, Honda Motor Co and Hyundai-Kia, the UAW could no longer safeguard pay for U.S. auto workers.
During the debate over the U.S. government bailout for GM and Chrysler, Republican Senators pushed the union to agree to pay and benefit levels that would be no higher than those offered by Toyota at its U.S. factories.
As part of sweeping concessions granted to the U.S. automakers under a 4-year contract up for negotiation in 2011, the UAW allowed Detroit autoworkers to hire new workers starting at $14 an hour, equivalent to about $29,000 per year.
That wage is about half of the pay for veteran assembly line workers. Both Ford and Chrysler have begun to add new workers at the lower wage rates.
King said he understood rank-and-file frustration after five years of concessions at a time of mounting financial problems for the U.S. auto industry.
But he said the union would not put the U.S. automakers at a competitive disadvantage with an upcoming round of contract demands. "It's not possible to get everything back that we've given up," he said.
UAW membership peaked at near 1.5 million in 1979 and dropped below 400,000 workers last year.
UAW President Bob King vowed to bring protesters, including retirees, to picket outside Toyota dealerships with banners charging that the automaker puts "Profits Before People."
"We're going to pound on Toyota until they recognize the First-Amendment rights of workers to come into the UAW," King told over 1,000 union delegates at a convention in Detroit.
Toyota and the UAW are at odds because of a decision by the Japanese automaker to close a Fremont, California plant that it had been operating in partnership with General Motors Co.
That plant, where workers had UAW representation, had produced the Corolla and Tacoma models for Toyota.
In a move that further angered the union, Toyota announced on Thursday that it would shift production of the Corolla sedan to a still-unfinished plant in Mississippi.
King said Toyota was looking to cut labor costs and free itself from union representation. He said the UAW would lobby to have the decision on Corolla reversed at the same time that it pushes to organize other Toyota factories.
"It's outrageous," King said of Toyota's decision to shift Corolla production to Mississippi. "If they're going to act that way, we're going to respond."
A Toyota spokesman could not be immediately reached for comment.
NO RECORD OF SUCCESS
The UAW has never succeeded in organizing a major U.S. auto factory apart from those run by the domestic manufacturers -- General Motors, Ford Motor Co (F.N) and Chrysler.
A push to organize Toyota's flagship U.S. factory in Georgetown, Kentucky fizzled in 2007. The union also failed on four separate votes going back to 1989 to win support for a union at a major Nissan factory in Tennessee.
"The only luck we've had has been bad luck," King said.
Toyota's emergence as the largest global automaker in recent years heightened the stakes for the union and its recent safety crisis made it appear vulnerable, union officials say.
King said the UAW would push ahead with a bid to organize Toyota whether or not a bill that would make it easier to establish unions known as the Employee Free Choice Act clears Congress.
Asian auto brands led by Toyota now represent about 46 percent of U.S. auto sales, a larger slice of the market than the Detroit Three combined.
King said that without expanding its base to include workers at Asian "transplant" factories run by the likes of Toyota, Honda Motor Co and Hyundai-Kia, the UAW could no longer safeguard pay for U.S. auto workers.
During the debate over the U.S. government bailout for GM and Chrysler, Republican Senators pushed the union to agree to pay and benefit levels that would be no higher than those offered by Toyota at its U.S. factories.
As part of sweeping concessions granted to the U.S. automakers under a 4-year contract up for negotiation in 2011, the UAW allowed Detroit autoworkers to hire new workers starting at $14 an hour, equivalent to about $29,000 per year.
That wage is about half of the pay for veteran assembly line workers. Both Ford and Chrysler have begun to add new workers at the lower wage rates.
King said he understood rank-and-file frustration after five years of concessions at a time of mounting financial problems for the U.S. auto industry.
But he said the union would not put the U.S. automakers at a competitive disadvantage with an upcoming round of contract demands. "It's not possible to get everything back that we've given up," he said.
UAW membership peaked at near 1.5 million in 1979 and dropped below 400,000 workers last year.
15 June 2010
King Inherits a UAW Seeking Payback for Concessions
Bloomberg Business Week
Bob King, the next United Auto Workers leader, inherits a union that gave up thousands of jobs and billions in benefits to save the U.S. auto industry. His legacy will rest on how workers are rewarded in the recovery.
King, 63, the nominee of the UAW bloc that has controlled the Detroit-based union since 1946, is slated to succeed two- term President Ron Gettelfinger, 65, in an election tomorrow. The electrician with a law degree, who rose through the ranks in 40 years at the UAW, is set to take over a union that has declined to 355,000 members from 1.5 million in 1979.
The UAW shift coincides with signs of recovery in the industry. General Motors Co. posted a net profit and Chrysler Group LLC made money on an operating basis in the first quarter, less than a year after each emerged from bankruptcy. The union helped convince President Barack Obama to provide an $85 billion taxpayer bailout to those automakers, taking concessions to put their labor costs on par with foreign automakers’ U.S. plants.
“Bob is facing a very, very difficult job because there will be tremendous pressure on him to roll back the concessions,” said Gary Chaison, a labor professor at Clark University in Worcester, Massachusetts. “He’s got to walk a very fine line to reverse some of what was lost and keep some in place for the promise of a brighter future.”
UAW workers have each given up $7,000 to $30,000 in concessions in the last five years, King said last month. The union surrendered raises, bonuses, cost-of-living adjustments and agreed to a two-tier wage system where new hires make about $14 an hour, half what hourly production workers are now paid.
Returning Benefits
As head of the union’s bargaining with Ford Motor Co., King filed a grievance in January after the automaker reinstated raises, 401(k) matches and tuition assistance for salaried workers. Dearborn, Michigan-based Ford has since restored tuition benefits for its 41,000 hourly workers and King is pressing for more.
“UAW members at GM, Ford and Chrysler and throughout the supplier sector have made the sacrifices to keep these companies viable,” King said at a Ford factory in Ypsilanti, Michigan, on May 24. He declined to be interviewed for this story.
UAW labor costs, including wages and benefits, have fallen from $75 an hour to about $55, equal to Toyota Motor Corp.’s U.S. workers. The union has about 113,000 members at Detroit- based GM, Ford and Chrysler, which is based in Auburn Hills, Michigan.
“Bob’s going to make sure our members are not forgotten as these companies rebound,” said UAW director Rory Gamble, who runs King’s former Detroit region and has known him 25 years. “But we’ve got to make sure these companies are viable, so there’s going to be a lot of caution in how we go after this.”
‘Vilified’ Union
Part of the caution will stem from managing the UAW’s public standing. “The current perception of the UAW is one of the lowest of any union in America,” said analyst David Cole of the Center for Automotive Research in Ann Arbor, Michigan.
A so-called jobs bank in which auto workers received almost full pay while on indefinite layoff “became the flag by which the union was vilified,” Cole said. The union doesn’t receive credit for giving up that jobs bank or other reforms, he said.
“Bob has to get out front and tell the world it’s a different union than it used to be,” Cole said. “Otherwise, it will continue to decay.”
King, the son of a former Ford industrial relations director, has been painted by challengers in the union as going too easy on the company. More than 70 percent of Ford workers rejected additional concessions in November that King endorsed. Ford earned $2.7 billion last year after three years of losses.
Critics in Union
“We can’t just take at face value when these companies cry poverty,” said Gary Walkowicz, a UAW official from King’s home factory in Dearborn, who is making a self-described symbolic run against him for president. “Workers really disagreed with giving up those concessions when Bob King asked them. It showed there’s a disconnect between the membership and the leadership.”
In the next round of contract bargaining in 2011, King has to work toward restoring raises while ensuring the automakers put new models into U.S. factories, said Sean McAlinden, economist at the Center for Automotive Research.
“As the market comes back, the automakers will be adding workers by the thousands,” McAlinden said. “If he holds the line on canceling too many concessions, he’ll get growth. Otherwise, the companies will say, ‘We’ll build up Mexico like you wouldn’t believe.’”
Business Case
King prepares business cases to show managers that hiring more workers at UAW plants can be profitable, said Bernie Ricke, president of UAW Local 600 in Dearborn, who has been at the Ford bargaining table beside King since 2003. “He’s usually very measured, though I’ve seen him pound the table a few times.”
Billionaire investor Wilbur Ross negotiated against King on a contract for his International Automotive Components Group, the world’s largest automotive carpet supplier. King studied IAC’s books and discussed findings with managers before bringing the information to union leaders and rank and file members. The new contract, which cut pay and benefits, passed by 80 percent.
“He’s the prototype for the kind of labor leader who is needed in this modern world,” Ross said in an interview. “His challenge is to preserve manufacturing in the United States at the same time maintaining a standard of living for the worker. It’s a delicate balance.”
King last year approached Ross for help in organizing auto suppliers to support the U.S. cash for clunkers program that funded government subsidies for vehicle trade-ins. They built a coalition of about 50 suppliers across the U.S., and the program eventually helped sell 677,081 cars.
From the Sickbed
King comes to the table with an “intense” work ethic, Gamble said. He’s been seen working two mobile phones at a time in Ann Arbor, where he lives with his wife and three children. (He also has two adult daughters from his first marriage). The night before stomach surgery last year, King called Gamble from his hospital bed at 11:30 p.m. to check on Ford’s plans to transfer workers among plants. After surgery King was right back on the phone, hoarse from a tube in his trachea, Gamble said.
“He could barely talk and I said, ‘Bob you need to get well, man,’” Gamble said. “He was relentless.”
He took a similar approach to his schooling. After studying religion and philosophy at College of the Holy Cross in Worcester, King graduated from the University of Michigan in 1968 with a degree in political science. He did a two-year tour in Korea with the U.S. Army and then went to work for Ford in 1970 at the Rouge factory complex in Dearborn that Henry Ford built in the 1920s. In 1972, King began an electrician apprenticeship while earning a law degree in his off-hours.
Rapid Rise
“While he was still an apprentice, the journeyman skilled tradesmen elected him as their union committeeman, which was unheard of,” Ricke said. “He had to work weekends to finish his apprenticeship.”
Raised Catholic, King draws a link between the labor movement’s mission and social justice. At a UAW convention in California in 1989, he bused reporters to a shanty town in Tijuana, Mexico, to show them the squalor surrounding U.S. companies’ border factories. He took a group of labor leaders to El Salvador in 1990 to monitor union elections.
King’s greatest challenge may be finding a way to build on his earlier efforts to increase the UAW’s ranks. While leading bargaining efforts a decade ago, he helped diversify the membership by organizing graduate students and casino workers.
Johnson Controls
King also led a strike at Johnson Controls Inc. in 2002 where he convinced the supplier to sign a neutrality agreement allowing the union to organize its other U.S. plants. Ford, one of JCI’s largest customers, also said it wouldn’t object to the UAW representing workers at the auto supplier. That set a precedent that enabled the UAW to sign up 25,000 auto parts workers that year, according to labor professor Harley Shaiken of the University of California at Berkeley.
“Bob King leveraged the good relationship the UAW had with Ford into a broader reach with its suppliers,” Shaiken said. “It was innovative and strategic.”
King also reaches out to other unions seeking new strategies for signing up members.
“He actually believes in grassroots organizing, which I think came from our organizing backgrounds,” said Leo Gerard, president of the United Steelworkers union, who consults with King on strategies for boosting membership and considers him soft-spoken but “tough as nails.”
About 350,000 of the 850,000 Steelworkers in the U.S., Canada and the Caribbean work on products that end up in autos.
The UAW can’t keep shrinking and expect to hold the clout that moved a president to rescue GM and Chrysler, Shaiken said.
“He’s facing an unprecedented crisis; the status quo is not tenable,” Shaiken said. “To survive the union has to go forward, and Bob needs to be a transformational leader.”
King, 63, the nominee of the UAW bloc that has controlled the Detroit-based union since 1946, is slated to succeed two- term President Ron Gettelfinger, 65, in an election tomorrow. The electrician with a law degree, who rose through the ranks in 40 years at the UAW, is set to take over a union that has declined to 355,000 members from 1.5 million in 1979.
The UAW shift coincides with signs of recovery in the industry. General Motors Co. posted a net profit and Chrysler Group LLC made money on an operating basis in the first quarter, less than a year after each emerged from bankruptcy. The union helped convince President Barack Obama to provide an $85 billion taxpayer bailout to those automakers, taking concessions to put their labor costs on par with foreign automakers’ U.S. plants.
“Bob is facing a very, very difficult job because there will be tremendous pressure on him to roll back the concessions,” said Gary Chaison, a labor professor at Clark University in Worcester, Massachusetts. “He’s got to walk a very fine line to reverse some of what was lost and keep some in place for the promise of a brighter future.”
UAW workers have each given up $7,000 to $30,000 in concessions in the last five years, King said last month. The union surrendered raises, bonuses, cost-of-living adjustments and agreed to a two-tier wage system where new hires make about $14 an hour, half what hourly production workers are now paid.
Returning Benefits
As head of the union’s bargaining with Ford Motor Co., King filed a grievance in January after the automaker reinstated raises, 401(k) matches and tuition assistance for salaried workers. Dearborn, Michigan-based Ford has since restored tuition benefits for its 41,000 hourly workers and King is pressing for more.
“UAW members at GM, Ford and Chrysler and throughout the supplier sector have made the sacrifices to keep these companies viable,” King said at a Ford factory in Ypsilanti, Michigan, on May 24. He declined to be interviewed for this story.
UAW labor costs, including wages and benefits, have fallen from $75 an hour to about $55, equal to Toyota Motor Corp.’s U.S. workers. The union has about 113,000 members at Detroit- based GM, Ford and Chrysler, which is based in Auburn Hills, Michigan.
“Bob’s going to make sure our members are not forgotten as these companies rebound,” said UAW director Rory Gamble, who runs King’s former Detroit region and has known him 25 years. “But we’ve got to make sure these companies are viable, so there’s going to be a lot of caution in how we go after this.”
‘Vilified’ Union
Part of the caution will stem from managing the UAW’s public standing. “The current perception of the UAW is one of the lowest of any union in America,” said analyst David Cole of the Center for Automotive Research in Ann Arbor, Michigan.
A so-called jobs bank in which auto workers received almost full pay while on indefinite layoff “became the flag by which the union was vilified,” Cole said. The union doesn’t receive credit for giving up that jobs bank or other reforms, he said.
“Bob has to get out front and tell the world it’s a different union than it used to be,” Cole said. “Otherwise, it will continue to decay.”
King, the son of a former Ford industrial relations director, has been painted by challengers in the union as going too easy on the company. More than 70 percent of Ford workers rejected additional concessions in November that King endorsed. Ford earned $2.7 billion last year after three years of losses.
Critics in Union
“We can’t just take at face value when these companies cry poverty,” said Gary Walkowicz, a UAW official from King’s home factory in Dearborn, who is making a self-described symbolic run against him for president. “Workers really disagreed with giving up those concessions when Bob King asked them. It showed there’s a disconnect between the membership and the leadership.”
In the next round of contract bargaining in 2011, King has to work toward restoring raises while ensuring the automakers put new models into U.S. factories, said Sean McAlinden, economist at the Center for Automotive Research.
“As the market comes back, the automakers will be adding workers by the thousands,” McAlinden said. “If he holds the line on canceling too many concessions, he’ll get growth. Otherwise, the companies will say, ‘We’ll build up Mexico like you wouldn’t believe.’”
Business Case
King prepares business cases to show managers that hiring more workers at UAW plants can be profitable, said Bernie Ricke, president of UAW Local 600 in Dearborn, who has been at the Ford bargaining table beside King since 2003. “He’s usually very measured, though I’ve seen him pound the table a few times.”
Billionaire investor Wilbur Ross negotiated against King on a contract for his International Automotive Components Group, the world’s largest automotive carpet supplier. King studied IAC’s books and discussed findings with managers before bringing the information to union leaders and rank and file members. The new contract, which cut pay and benefits, passed by 80 percent.
“He’s the prototype for the kind of labor leader who is needed in this modern world,” Ross said in an interview. “His challenge is to preserve manufacturing in the United States at the same time maintaining a standard of living for the worker. It’s a delicate balance.”
King last year approached Ross for help in organizing auto suppliers to support the U.S. cash for clunkers program that funded government subsidies for vehicle trade-ins. They built a coalition of about 50 suppliers across the U.S., and the program eventually helped sell 677,081 cars.
From the Sickbed
King comes to the table with an “intense” work ethic, Gamble said. He’s been seen working two mobile phones at a time in Ann Arbor, where he lives with his wife and three children. (He also has two adult daughters from his first marriage). The night before stomach surgery last year, King called Gamble from his hospital bed at 11:30 p.m. to check on Ford’s plans to transfer workers among plants. After surgery King was right back on the phone, hoarse from a tube in his trachea, Gamble said.
“He could barely talk and I said, ‘Bob you need to get well, man,’” Gamble said. “He was relentless.”
He took a similar approach to his schooling. After studying religion and philosophy at College of the Holy Cross in Worcester, King graduated from the University of Michigan in 1968 with a degree in political science. He did a two-year tour in Korea with the U.S. Army and then went to work for Ford in 1970 at the Rouge factory complex in Dearborn that Henry Ford built in the 1920s. In 1972, King began an electrician apprenticeship while earning a law degree in his off-hours.
Rapid Rise
“While he was still an apprentice, the journeyman skilled tradesmen elected him as their union committeeman, which was unheard of,” Ricke said. “He had to work weekends to finish his apprenticeship.”
Raised Catholic, King draws a link between the labor movement’s mission and social justice. At a UAW convention in California in 1989, he bused reporters to a shanty town in Tijuana, Mexico, to show them the squalor surrounding U.S. companies’ border factories. He took a group of labor leaders to El Salvador in 1990 to monitor union elections.
King’s greatest challenge may be finding a way to build on his earlier efforts to increase the UAW’s ranks. While leading bargaining efforts a decade ago, he helped diversify the membership by organizing graduate students and casino workers.
Johnson Controls
King also led a strike at Johnson Controls Inc. in 2002 where he convinced the supplier to sign a neutrality agreement allowing the union to organize its other U.S. plants. Ford, one of JCI’s largest customers, also said it wouldn’t object to the UAW representing workers at the auto supplier. That set a precedent that enabled the UAW to sign up 25,000 auto parts workers that year, according to labor professor Harley Shaiken of the University of California at Berkeley.
“Bob King leveraged the good relationship the UAW had with Ford into a broader reach with its suppliers,” Shaiken said. “It was innovative and strategic.”
King also reaches out to other unions seeking new strategies for signing up members.
“He actually believes in grassroots organizing, which I think came from our organizing backgrounds,” said Leo Gerard, president of the United Steelworkers union, who consults with King on strategies for boosting membership and considers him soft-spoken but “tough as nails.”
About 350,000 of the 850,000 Steelworkers in the U.S., Canada and the Caribbean work on products that end up in autos.
The UAW can’t keep shrinking and expect to hold the clout that moved a president to rescue GM and Chrysler, Shaiken said.
“He’s facing an unprecedented crisis; the status quo is not tenable,” Shaiken said. “To survive the union has to go forward, and Bob needs to be a transformational leader.”
07 May 2009
Coming Attraction: UAW Vs. GM
Commentary by: Daniel Howes | Detroit News
This is about to turn real ugly.
The bankruptcy of Chrysler LLC -- promised to be "speedy" -- is shaping up to be anything but. The umpteenth restructuring of General Motors Corp. is giving new meaning to the word "draconian," mostly because the time for negotiation and cajoling is being replaced with the hammer -- take the deal or we'll see you in court.
Which is why a United Auto Workers vice president used an upbeat event at a rival plant Wednesday to send a clear message to the General, one day before last-ditch bargaining is scheduled to go into high gear: Avoiding bankruptcy may be preferable, but not if it means complicity in using taxpayer dollars to benefit foreign autoworkers and gut the union.
"There are some today that don't understand what the Ford leadership understands," UAW Vice President Bob King, head of the union's Ford Department, told an audience that included Ford Chairman Bill Ford Jr., CEO Alan Mulally and Gov. Jennifer Granholm. "There are some companies who want to sell products here that they're not going to build here.
"There are some restructuring plans that are saying they want to take the jobs out of America. And they want to build ... in Mexico rather than build in the United States of America." Then, his voice rising in expectation of a unanimous response from gathered members of UAW Local 900, King asked:
"If you're going to take American tax dollars -- our tax dollars -- where do you build?"
In these times, especially, the politically correct question answers itself: "America." This in front of the building-Ford-Fusions-in-Mexico execs, now that King clearly has established the Blue Oval as the standard by which the rest of Detroit Auto would be judged.
Yes, this is about to get real ugly, an archly political confrontation of organized labor and the depressing reality of GM's business prospects that will, before it's over, force the likes of Granholm, members of Michigan's congressional delegation and lots more to choose sides.
The problem here is that King, a likely favorite to succeed UAW President Ron Gettelfinger, implies the antiquated belief that all three of Detroit's automakers are equal, as if "pattern bargaining" and an alleged market parity between GM, Ford and Chrysler exist in the real world.
They don't, haven't for a long time and few know that better than the UAW's leadership. If parity existed, Chrysler wouldn't be bankrupt, GM wouldn't be on the way out and Ford wouldn't be sitting on the cash pile (and an intensely focused business plan) that is keeping it from joining the other two.
"The General Motors plan is not acceptable to the American public," King continued, assuming that who builds what where is as important in Los Angeles or Atlanta as it is in Detroit. "I don't think the American public will support their tax dollars being used to close more plants -- and then to openly say we're going to bring product in from China, Korea and Mexico."
Building cars in foreign markets to sell in foreign markets is acceptable, he said, conveniently downplaying the Mexican parentage of the Fusion and its siblings from Lincoln and Mercury. Or the fact that its GM counterpart, the Chevy Malibu, issues from UAW plants.
What we're witnessing here isn't so much a paroxysm of nationalistic fervor, because driving that line in the North American auto business means little if the automakers end up in liquidation. No, these are the opening salvoes in a political battle to win hearts and minds of competing constituencies.
First, to show union members that their leaders are fighting the good fight against punishing odds, a horrific economy, a skeptical Congress and a critical public. And, second, to show GM insiders that the union knows it has five days, starting today, to influence the "manufacturing footprint" (i.e., plant closing) plan scheduled to be presented to GM's North American Strategy Board on May 12.
Not much time. For years, UAW-Big Three negotiations have been the three equal parts of economics, politics and theater. Now, there's a fourth component -- survival. It's fueled by theater and shaped by politics, but it will be decided by the numbers, one way or another.
This is about to turn real ugly.The bankruptcy of Chrysler LLC -- promised to be "speedy" -- is shaping up to be anything but. The umpteenth restructuring of General Motors Corp. is giving new meaning to the word "draconian," mostly because the time for negotiation and cajoling is being replaced with the hammer -- take the deal or we'll see you in court.
Which is why a United Auto Workers vice president used an upbeat event at a rival plant Wednesday to send a clear message to the General, one day before last-ditch bargaining is scheduled to go into high gear: Avoiding bankruptcy may be preferable, but not if it means complicity in using taxpayer dollars to benefit foreign autoworkers and gut the union.
"There are some today that don't understand what the Ford leadership understands," UAW Vice President Bob King, head of the union's Ford Department, told an audience that included Ford Chairman Bill Ford Jr., CEO Alan Mulally and Gov. Jennifer Granholm. "There are some companies who want to sell products here that they're not going to build here.
"There are some restructuring plans that are saying they want to take the jobs out of America. And they want to build ... in Mexico rather than build in the United States of America." Then, his voice rising in expectation of a unanimous response from gathered members of UAW Local 900, King asked:
"If you're going to take American tax dollars -- our tax dollars -- where do you build?"
In these times, especially, the politically correct question answers itself: "America." This in front of the building-Ford-Fusions-in-Mexico execs, now that King clearly has established the Blue Oval as the standard by which the rest of Detroit Auto would be judged.
Yes, this is about to get real ugly, an archly political confrontation of organized labor and the depressing reality of GM's business prospects that will, before it's over, force the likes of Granholm, members of Michigan's congressional delegation and lots more to choose sides.
The problem here is that King, a likely favorite to succeed UAW President Ron Gettelfinger, implies the antiquated belief that all three of Detroit's automakers are equal, as if "pattern bargaining" and an alleged market parity between GM, Ford and Chrysler exist in the real world.
They don't, haven't for a long time and few know that better than the UAW's leadership. If parity existed, Chrysler wouldn't be bankrupt, GM wouldn't be on the way out and Ford wouldn't be sitting on the cash pile (and an intensely focused business plan) that is keeping it from joining the other two.
"The General Motors plan is not acceptable to the American public," King continued, assuming that who builds what where is as important in Los Angeles or Atlanta as it is in Detroit. "I don't think the American public will support their tax dollars being used to close more plants -- and then to openly say we're going to bring product in from China, Korea and Mexico."
Building cars in foreign markets to sell in foreign markets is acceptable, he said, conveniently downplaying the Mexican parentage of the Fusion and its siblings from Lincoln and Mercury. Or the fact that its GM counterpart, the Chevy Malibu, issues from UAW plants.
What we're witnessing here isn't so much a paroxysm of nationalistic fervor, because driving that line in the North American auto business means little if the automakers end up in liquidation. No, these are the opening salvoes in a political battle to win hearts and minds of competing constituencies.
First, to show union members that their leaders are fighting the good fight against punishing odds, a horrific economy, a skeptical Congress and a critical public. And, second, to show GM insiders that the union knows it has five days, starting today, to influence the "manufacturing footprint" (i.e., plant closing) plan scheduled to be presented to GM's North American Strategy Board on May 12.
Not much time. For years, UAW-Big Three negotiations have been the three equal parts of economics, politics and theater. Now, there's a fourth component -- survival. It's fueled by theater and shaped by politics, but it will be decided by the numbers, one way or another.
03 April 2009
Opinion: GM Bankruptcy? Tell Me Another
As Originally Posted at the Wall Street Journal
President Obama rightly says "sacrifices" must be made if GM is to emerge as a viable company. But there's one sacrifice he won't make: his re-election chances, by leaving the fate of the UAW truly up to a bankruptcy judge.
Keep that in mind amid the defenestration of Rick Wagoner, who was not as popular with UAW Chief Ron Gettelfinger as Mr. Wagoner's replacement, Fritz Henderson. Keep that in mind amid reports the administration favors a "quick and surgical" bankruptcy. It's a bluff. The same administration that inserted itself into GM's corporate governance to order the resignation of a CEO is hardly likely to defer to the prescribed legal order for a failing company, namely bankruptcy. Even a "prepackaged" filing runs too much risk of a judge imposing more "sacrifice" on the UAW than the administration is prepared to tolerate.
President Obama rightly says "sacrifices" must be made if GM is to emerge as a viable company. But there's one sacrifice he won't make: his re-election chances, by leaving the fate of the UAW truly up to a bankruptcy judge.Keep that in mind amid the defenestration of Rick Wagoner, who was not as popular with UAW Chief Ron Gettelfinger as Mr. Wagoner's replacement, Fritz Henderson. Keep that in mind amid reports the administration favors a "quick and surgical" bankruptcy. It's a bluff. The same administration that inserted itself into GM's corporate governance to order the resignation of a CEO is hardly likely to defer to the prescribed legal order for a failing company, namely bankruptcy. Even a "prepackaged" filing runs too much risk of a judge imposing more "sacrifice" on the UAW than the administration is prepared to tolerate.
GM bondholders understand this: They've been intransigent precisely because they calculate the UAW is too important to Democratic electoral politics for Mr. Obama to risk losing control of the reorganization process to a bankruptcy judge.
The GM bailout has become a political operation run out of the White House. It will stay that way. Talk of UAW layoffs already disguises the fact that UAW workers are actually offered generous buyouts and early retirement -- they aren't just sent away with a last paycheck. What about Chrysler? A few weeks ago, Fiat was saying it would consider a merger if a loan from Washington was guaranteed. Now Washington is saying a loan will be forthcoming as long as Fiat does a deal. That's not an ultimatum -- that's a nod and a wink.
Mr. Wagoner did more than any GM executive to deal with the cursed legacy of 75 years of too much government attention. Not for him, though, and not for Team Obama, the real solution to make GM "viable": Getting rid of its North American business to end its UAW captivity.
That captivity, imposed by the 1935 Wagner Act, is the sole relevant factor distinguishing the Detroit Three from the world's other auto makers. The result is downright weird: "Our" auto companies operate in a world that's less "American," in a sense, than the Japanese and German companies that come here and enjoy a free labor market.
The Wagner world was given a second lease on life by a peculiar feature of Congress's 1975 fuel economy law. Known as the "two fleets" rule, it effectively forces Detroit to make its cheap small cars in high-wage domestic UAW factories, even if it means losing money on every car. The rule has no fuel-economy function. Its only purpose is to shield the UAW monopoly inside each Detroit auto maker from global labor competition.
You wouldn't have noticed, but a legislative accident two years ago almost stripped away the two fleets rule. A couple of Republican senators from the South took the lead in crafting the Senate's new fuel economy bill, and built it to please Nissan, which had railed against two fleets for its own reasons.
In the final bill, to no one's surprise, two fleets was quietly restored by Rep. John Dingell and Illinois Sen. Obama (among others) as a political favor to the United Auto Workers.
The UAW's Mr. Gettelfinger had testified, coyly, during Congressional hearings that failing to renew two fleets might cost 17,000 auto workers jobs building small cars. He didn't say that two fleets is in fact the fulcrum by which, for the past 30 years, the UAW has been able to defeat globalization.
He didn't say two fleets was the sine qua non for the past generation of the UAW's power to suck the Big Three dry.
Mr. Obama played the tough guy in getting rid of Mr. Wagoner, but he won't go after the labor monopoly. In fact, the union will emerge with a stronger grip on Detroit -- because it will be a major shareholder in a reorganized GM.
The irony is that Detroit has given plenty of evidence that it can make money, even with UAW overhead. Three of the top seven best-selling vehicles in February were Ford, Chevy and Dodge pickups.
Better than trying to rewrite GM's business relationships -- the job of a bankruptcy judge -- Mr. Obama might take up the duties of a president. He might try giving the country a coherent auto policy for a change. He could repeal two fleets so Detroit could build its small cars profitably offshore and tame the UAW monopoly in the process. He could dump CAFE or impose a $5 gasoline tax so at least customers would have a reason to buy the cars Washington is forcing Detroit to build.
None of this will happen. Mr. Obama will be content with incoherent policies that poll well -- which means GM, Chrysler and perhaps Ford eventually will need taxpayer subsidies as far as the eye can see -- or until a real bankruptcy sometime after November 2012.
Obama Seeks Concessions From UAW Retirees
As Originally Posted to the Wall Street Journal
DETROIT -- President Barack Obama's recovery plan for General Motors Corp. and Chrysler LLC appears to take aim at union retirees, a usually reliable Democratic constituency.
After studying the plight of the companies, the president's auto task force concluded GM and Chrysler's survival is dependent on greater concessions from the United Auto Workers union because the cost of funding retiree benefits had become unmanageable, especially given the downturn in global auto sales.
In his address Monday, Mr. Obama laid blame for GM and Chrysler's financial ills largely at the feet of the management teams at those companies. He called on hourly workers and retirees at the companies to be ready to accept more sacrifice if they hoped to keep their employers afloat.
The UAW appears to be standing firm that its members have made substantial concessions compared with other stakeholders. UAW President Ron Gettelfinger on Monday declined requests for interviews, but a person close to him said the union boss is determined not to consider further concessions unless bondholders and creditors agree to givebacks that cut GM's and Chrysler's debt.
Click Image to Enlarge
Some Democratic lawmakers have offered support for the union. On Monday, Sen. Carl Levin (D., Mich.) acknowledged the union would have to agree to more cuts to retirees' benefits, but added that investors in GM, not employees, would have to sacrifice the most. The three Detroit auto makers provide health care for more than one million Americans, including union retirees and their dependents. In 2007, the union agreed to allow GM, Chrysler and Ford Motor Co. to pay billions of dollars into a trust fund, known as a VEBA, or voluntary employee beneficiary association, that the union would manage and use to cover the cost of retiree health care.
Under the terms of the bailout loans GM and Chrysler have accepted from the federal government, they are supposed to renegotiate the VEBA agreements so they can put a combination of cash and stock into the funds or equity. GM is obligated to contribute about $20 billion in cash, in addition to $16 billion in funds it already committed, and Chrysler about $10 billion.
The task force found that GM's own plan to deal with retiree health care and pensions grows "to unsustainable levels, reaching approximately $6 billion per year in 2013 and 2014." To pay those bills, GM would need to sell 900,000 additional cars a year, according to the panel. GM sold 8.35 million vehicles around the world last year.
A union local president in Michigan said more could be done to reach a compromise on retiree health care. But the union leader who represents GM workers warned if the auto makers step back from their obligations to retired workers, the remaining cost of their health care will not go away.
Clem Wittman, 68 years old, spent three decades working the assembly line for GM, building Monte Carlos and Skylarks in Kansas City, Mo. On Monday, he watched as Mr. Obama outlined his plans for steering the future of GM and Chrysler without explicit mention of the retirees. "It was scary because he never mentioned the retirees and legacy costs," Mr. Wittman said. "What 85-year-old can go out and get another job?"
He takes 11 medications, including some which cost more than $100 a month, all covered by GM health-care programs. Mr. Wittman said that for 30 years he paid for those benefits and shouldn't be asked to give them back.
UAW Chief Has No Good Options
Gettelfinger Faces Making More Concessions or Seeing Chrysler, GM Pushed Into Bankruptcy
As Originally Posted to the Wall Street Journal
As Originally Posted to the Wall Street Journal
United Auto Workers President Ron Gettelfinger has squared off against plenty of auto executives. But now he may be facing an even tougher opponent: the U.S. government.
The Obama administration has made clear it is willing to push General Motors Corp. and Chrysler LLC into bankruptcy if the UAW and bondholders don't agree to cut costs. Bankruptcy would give the companies the ability to tear up their UAW contracts and impose another wave of deep cuts in auto workers' wages and healthcare benefits. At stake are the fortunes of about 141,000 UAW members -- down from 300,000 about five years ago -- and hundreds of thousands of retirees.
Mr. Gettelfinger has said repeatedly that the union has already made substantial concessions compared with other stakeholders and won't make any more until bondholders and other creditors agree to givebacks to reduce GM and Chrysler debt.
But the union chief has no good options. He either agrees to concessions or the car makers end up in bankruptcy, which would mean splitting them into good and bad companies, closing plants and giving up jobs. Pensions and retiree health care would likely be cut as well.
Mr. Gettelfinger has already announced his retirement, so he doesn't have to worry about winning another election. In theory, that makes it easier for him to accept unpopular terms. But he still has to win approval of any agreement from the rank and file, which must ratify any changes.
For Mr. Gettelfinger, it's the biggest challenge he has faced. "If a settlement isn't reached and GM goes into bankruptcy, it could be a black mark against the union for decades," says Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. "Gettelfinger is good at bargaining, but this isn't bargaining. The union doesn't have the right to strike, and he's already been told what the outcome will be." A UAW spokesman said the union didn't have any comment Tuesday.
The situation is made more difficult because it comes on top of prior concessions, Mr. Chaison says. Negotiations led by Mr. Gettelfinger two years ago resulted in new GM workers being paid lower wages than existing workers and a trust to cover retiree health coverage. At the time, the concessions were touted as a major restructuring of the UAW's historically generous contracts.
The UAW and auto makers face some of the same challenges -- mainly huge legacy costs, overcapacity and foreign competition -- that hobbled the domestic steel industry between 2000 and 2003. In working through those problems, several steelmakers went bankrupt, eventually emerging with new ownership and labor accords that restructured retiree health obligations.
Billionaire investor Wilbur Ross, who runs distressed asset specialist WL Ross & Co., bought out and consolidated bankrupt steelmakers, working with the steelworkers union to create new contracts. One of the biggest challenges facing Mr. Gettelfinger will be balancing the needs of active workers and retirees, Mr. Ross says. "There's obviously much heavier government influence in this situation than there was in steel," he adds, and U.S. car makers could even come out of the restructuring as the lowest cost producer.
The three Detroit auto makers provide health care for more than one million Americans, including union retirees and their dependents. In 2007, the UAW agreed to allow GM, Chrysler and Ford Motor Co. to pay billions of dollars into a trust fund, known as a VEBA, or voluntary employee beneficiary association, that the union would manage and use to cover the cost of retiree health care.
Under the terms of the bailout loans GM and Chrysler have accepted from the federal government, the companies are supposed to renegotiate the VEBA agreements, persuading the UAW to take equity in exchange for half the companies' payments to the VEBA. Labor costs also have to be cut to match those of Japanese auto makers. Some estimates have put the hourly compensation gap between Detroit auto makers and the Japanese at $10 an hour, though UAW officials say that's too high.
One UAW worker, 56-year-old Jeff Hall, a GM maintenance pipe fitter in Pittsburgh now on layoff, says he remains a supporter of Mr. Gettelfinger. But he doesn't like the union leader's options. "It seems like the government and everyone is encouraging bankruptcy. To me that is going to be a disaster."
Accepting more concessions could also hurt the union's ability to grow at healthy companies. The UAW has been unable to organize U.S. workers at plants run by foreign auto makers. Accepting more cuts to GM wages and benefits would make organizing elsewhere even more difficult because the union would have little of value to offer nonunion workers, says John Russo, co-director of the Center for Working-Class Studies at Youngstown State University.
11 March 2009
UAW Members Await GM Health Deal After Ford Contract Ratified
As Originally Posted at BloombergUnited Auto Workers members at General Motors Corp. will have to wait for an agreement on a union retiree health-care fund before voting on labor concessions GM needs to keep U.S. aid.
A UAW-GM agreement approved Feb. 17 by negotiators is similar to the economic matters ratified by UAW members at Ford Motor Co., UAW Vice President Cal Rapson wrote in a letter yesterday to local presidents and chairmen. GM and the UAW are still negotiating changes to the so-called Voluntary Employee Beneficiary Association, the letter said.
GM must persuade the UAW to swap $20.4 billion in future obligations to the VEBA for half that in cash and the rest in equity as part of U.S. Treasury requirements to keep $13.4 billion in loans and win approval for as much as $16.6 billion more. GM has said it needs at least $2 billion in fresh aid by the end of this month or it will be bankrupt.
Changes to the GM contract “in the area of economics, pattern the UAW Ford agreement,” Rapson said in the letter. Other parts, he said, are “drastically different.”
For example, there are no mandatory physical examinations and “other parts of the agreement are different to better fit GM culture.”
The UAW walked out on GM talks on Feb. 13 in a dispute over the VEBA demands and later returned to approve only other concessions. GM UAW members must still ratify the agreement for it to be implemented.
GM spokeswoman Renee Rashid-Merem said the automaker isn’t commenting on the VEBA negotiations, which are ongoing. UAW spokesman Roger Kerson didn’t return a phone call or an e-mail seeking comment.
Ford Changes
The Ford contract changes won the support of 59 percent of production workers and 58 percent of skilled-trades employees, the union said yesterday in a statement. The terms include elimination of annual bonuses and cost-of-living pay increases, as well as reductions in layoff benefits and in the company’s cash contribution to the VEBA for Michigan health insurance.
A key provision of the Ford accord lets the Dearborn, Michigan, automaker cut by half its cash contribution to the VEBA. Stock will make up the balance of the payments to the fund, beginning in 2010 when $3.2 billion is due, according to a March 5 report by Chicago-based analyst Brian Johnson of Barclays Capital.
Union Givebacks
Ford’s labor agreement also eliminates the so-called jobs bank, a 25-year-old program that paid UAW employees their full salary indefinitely to report to work when there were no duties to perform. GM and Chrysler LLC have eliminated their programs.
Instead, Ford union workers with more than 20 years will get 52 weeks at about 70 percent of their gross wages, so-called supplemental unemployment benefit, or SUB, pay -- or about double what they would receive in unemployment -- and 52 weeks more at half that rate.
Workers with more than 10 years and fewer than 20 get 39 weeks of full SUB pay and 39 weeks at half the rate. A worker with less than 10 years’ service gets 26 weeks at full supplemental pay and 26 weeks at half.
In the past, workers would get the supplemental pay for 48 weeks and then go into the jobs bank.
09 March 2009
UAW, Ford Reach Agreement
Original Story From Associated Press
As Posted at Forbes
The United Auto Workers Union says its members working for Ford Motor Co. have approved contract changes that include freezing wages and cutting other benefits in a move to aimed at helping the automaker remain competitive.
The approved agreement also ends the jobs bank program and lets Ford make payments in stock to a union-run trust for retiree health care.
The union says 59 percent of production workers and 58 percent of skilled-trades workers voted for the agreement.
Ford is not seeking government funding and is the first U.S. automaker to come to an agreement with the union.
30 December 2008
GM Prepares Ground for Post-Holiday Talks With UAW
As posted by: Wall Street JournalDETROIT -- General Motors Corp., while holding preliminary discussions now with key constituents, is expected to wait until early January to begin deep talks with the United Auto Workers union, bondholders and the coming Obama administration, in an effort to work out agreements to comply with the terms of the bailout President George W. Bush announced last week.
GM and Chrysler LLC are supposed to get $13.4 billion in coming months, but are required, among other things, to cut labor costs and reduce their debt. If they make progress on their restructurings, they could get an additional $4 billion in February.
Following the Bush announcement, the two ailing auto makers got another shot in the arm from north of the border on Saturday, as the Canadian government and the province of Ontario said they will provide at least US$3.29 billion in loans to the Canadian units of GM and Chrysler.
Canada and Ontario had been poised for more than a week to provide an injection of cash once the U.S. government took action, and were promising to provide loans totaling 20% of whatever the U.S. offered.
"We cannot afford, in the United States or Canada, the catastrophic short-term collapse of the Big Three auto makers. The U.S. has signaled that they are not going to allow these companies to fail, and we will do our share of the North American package to see that this doesn't happen either," Canadian Prime Minister Stephen Harper said at a news conference on Saturday.
After spending the last several weeks lobbying Congress and the White House for bridge loans, GM officials got a breather over the weekend. This week they'll begin "brief and high level" talks with the UAW, bondholders, banks and suppliers, although it's unclear how much progress they can make with the Christmas holiday coming on Thursday, according to several people involved in discussions.
GM expects to receive its first round of loans from Washington by Dec. 29, the company's chief financial officer said on Friday, just in time to fund $6 billion to $8 billion in payments due to thousands of parts makers at the beginning of January.
Throughout the nation, UAW officials began bracing GM workers to make what they called "unpopular sacrifices." In a letter to assembly-line employees in Texas, the leaders of UAW Local 276 said that "strict conditions associated with the loans are non-negotiable and must be met by the stated deadline," which is March 31. The officials warned UAW workers that they may not hear any updates from the union's leadership in Detroit until after the holidays.
Brett Hoselton, a senior automotive analyst at KeyBanc Capital Markets, said in an interview that GM and Chrysler are likely headed for some tough talks with the United Auto Workers union, and must come away with significant cost cuts quickly in order to qualify for a second round of loans in the first quarter.
"Concessions need to happen, and happen soon," he said. "Because you're basically back to square one come February or March."
GM and Chrysler are likely to seek the complete elimination of the so-called Jobs Bank, a controversial program in which laid-off workers continue to get paid even when their plants close and they no longer report for work. UAW President Ron Gettelfinger has said the union will suspend the Jobs Bank.
GM is also being forced to cut about $40 billion of its $60 billion debt load, or $10 billion more than the auto maker was willing to cut under a plan it submitted to Congress in early December.
Pat O'Keefe, president of O'Keefe & Associates Consulting, a turnaround firm in Bloomfield Hills, Mich., said the auto makers can use the specter of bankruptcy to prod creditors into accepting new terms that help the auto makers.
"Bankruptcy is a failed negotiation," he said. "If they're unable to get a deal on a negotiated basis, they will use bankruptcy to push the parties that can't seem to come to the table."
On Friday, GM Chief Executive Rick Wagoner told reporters that government assistance is expected to give GM time to put together a plan that doesn't require a bankruptcy filing.
As it dives into negotiations with unions and investors, GM is keeping a close eye on developments at its lending affiliate, GMAC LLC, which won't receive any of the funds slated for GM's bailout. GM relies on GMAC to make loans to most of its dealers and a substantial chunk of GM car buyers. The firm, however is facing a liquidity crisis and is working with federal regulators on a plan that would allow it to become a bank holding company, and therefore separately tap the $700 billion in funds originally intended to bail out the finance industry.
Without that designation, GMAC is likely to collapse. The lender currently owes GM up to $1.5 billion in delayed payments related to wholesale financing for auto dealers, and that money is due Dec. 30. GM needs the money in order to pay its suppliers in early January. It is unclear what will happen if GMAC is unable to make that payment.
GM executives expect to resume discussions with President-elect Barack Obama's transition team shortly after the New Year. Mr. Obama is currently vacationing in Hawaii, and GM officials haven't been as closely in touch with his aides as they were when the auto maker was in discussions with Congress earlier in December about a bridge loan.
Even as it lobbied for White House aid, GM's management team was beginning to build contingency plans in the event it had to file for Chapter 11 bankruptcy protection. Many of the advisers it has been working with, including high-profile bankruptcy attorneys, are expected to continue working with Mr. Wagoner's management team in coming months.
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