THE UAW auto workers union is beginning its 2011 contract talks with GM, Ford and Chrysler.
For the employers the 2009 bankruptcies of General Motors and Chrysler drove home the reality that the Big Three Detroit automakers could vanish if they failed to slash wage bills and cut pension and health deals.
‘We have to be competitive,’ said Mark Fields, president of Ford of the Americas.
Ford was the only one of the Big Three to avoid filing for bankruptcy protection two years ago, but unlike its crosstown rivals, it took on significant debt that it is desperate to draw down.
So Ford is expected to seek additional concessions on top of what it has got since 2007, when the last round of contract talks was held.
Ford estimates it is spending about $58 an hour on wages and benefits for each unionised worker.
Chrysler says its figure is closer to $52.
That is about equal to what Chrysler officials believe its import rivals are paying at the many so-called ‘transplant’ assembly lines that have sprung up across the country over the last quarter-century – ‘transplants are the non-US car companies that are siting themselves in the US.
The presence of those factories will be felt as the bargaining in Detroit moves forward.
As recently as 2006, the domestic US companies were paying about $76 an hour for UAW labour, which was ‘unsustainable’.
Many UAW members would like to win back some of the concessions made in 2007 and 2009, union leaders are making relatively little noise about getting wage or benefit hikes this year.
The UAW leaders bargaining is more likely to focus on where to allocate a fixed ‘bucket’ of cash, perhaps by trimming healthcare costs to put a few more dollars in wage envelopes.
If there is to be more money, the UAW has signalled it will seek it in the form of enhanced profit-sharing programmes.
‘Our members deserve more of the upside’ when times are good, UAW President Bob King said recently.
There’s another reason why this year’s talks will be different than in the past. The federal government barred the UAW from striking when it approved the GM and Chrysler bailouts two years ago.
While a strike is possible at Ford, there hasn’t been one there in a third of a century.
Instead, a deadlock would result in binding arbitration.
One of the few issues that could be a sticking point concerns the two-tier wage structure the UAW approved in 2007.
King has said that he is worried that those now being hired at half the pay aren’t getting a ‘living wage.’
On the other hand, he has also acknowledged that the lower scale is encouraging Detroit’s automakers to add jobs, but at much lower pay.
GM is building the new Chevrolet Sonic subcompact in a suburban Detroit plant, rather than importing it from Korea, as it did with the previous model, the Chevy Aveo.
Chrysler is looking at 300 different plans to bring back work that it previously had outsourced to save money.
Even with recent expansions at plants in Sterling Heights and Detroit, Chrysler has barely a third the number of UAW workers that it employed a decade ago.
Total UAW membership, the union revealed, was 376,612 at the end of 2010, down from the 1979 peak of 1.53 million.
‘That’s not sustainable,’ warned Harley Shaiken, a former UAW member and now a labour professor at the University of California, Berkley.
One of the challenges as far as the UAW leaders are concerned will be to craft a contract that not only keeps the Detroit makers competitive but which also can help the union meet its next pressing goal: organising the ‘transplants’.
So far, only three have approved UAW representations and one, the former GM/Toyota joint venture near San Francisco, has closed.
So, what happens in Detroit over the next month-and-a-half could determine not only what goes into the pocket of Big Three union workers but whether they have a viable union to belong to.
UAW leader King spoke at the start of the year about what role he thinks that the union should pay in the 21st century.
He put forward the equation that ‘Fundamental changes in the global economy demand fundamental change in the labour movement.’
He continued: ‘We understand that globalisation has radically altered the competitive environment facing the auto sector. Indeed, we have paid the price for failing to learn this lesson quickly enough. The UAW has learned from the past and has embraced dramatic and radical change.
‘To achieve our mission in this new environment, the UAW of the 21st century has a dual responsibility. One responsibility is to partner with our UAW employers to create growth, strength, competitiveness, and profitability.
‘Our other responsibility is to advocate for a Fair Deal for all workers. A Fair Deal means fair middle class sustaining wages, benefits and pensions. A Fair Deal means a regular employee status vs. temporary status. A Fair Deal means retirement with dignity.
‘A Fair Deal means sharing in the good times as well as sacrificing in the bad times. A Fair Deal means safe neighbourhoods and good schools for our kids through fair taxes on good wages and profits.’
He emphasised that all this depended on the employers, saying: ‘We know that without the financial success of our employers, there is no economic foundation for a middle class and a Fair Deal.’
He balanced this by adding: ‘We also know that without a real, enforceable right to organize and collective bargaining, unfettered corporate power will undermine responsible companies and destroy the middle class and any chance for a Fair Deal for all Americans.’
He continued: ‘Working with the UAW is a smart business decision. Every day in every way, the UAW is dedicated to doing whatever it takes to help our employers through innovation, flexibility, continuous cost-saving, quality, and productivity . . . An observer coming into many of our plants and talking to an employee can’t tell which worker belongs to management and which worker is a member of the union because we are all focused on producing the highest quality and best value for customers.’
His message for foreign capital exploiting US workers in the USA was : ‘We will not stand quietly by while a corporation threatens workers for trying to organize a union. We will not stand quietly by in the face of a concerted assault on the middle class and on the institution of collective bargaining.
‘If a company makes the business decision to engage in anti-union activity and suppress the rights of freedom of speech and assembly, we will launch a global campaign to brand that company as a human rights violator . . .
‘We are saying to global corporations that the best moral decision AND the best business decision is to work with the UAW.’
The message is corporatism, flexibility, and whatever is necessary to keep the motor car employers going, while desperately hoping that the present slump and financial crash does not last as long as the 1930s and does not end with World War III.