Thursday, June 15, 2006

Detroit: It's All on the Line

Detroit: It's All on the Line

June 19, 2006 issue - United Auto Workers presidentau Ron Gettelfinger doesn't look like your typical union boss. Soft-spoken with a neatly trimmed mustache, he's more like a college professor. Yet when asked to describe his style shortly before he became the union's president in 2002, Gettelfinger barked: "Abrasive." He proved it by calling a strike in his first week on the job. The walkout at a car-seat maker caused a domino effect that shut down five GM and Chrysler factories. Gettelfinger then prodded the automakers to pressure the seat supplier to settle with the union. Faced with losing thousands of SUV and minivan sales, GM and Chrysler went along with Gettelfinger. The strike lasted just two days.

Now the threat of an even bigger strike looms in Detroit—one that analysts warn could drive GM into bankruptcy. And in the driver's seat once again is Gettelfinger, 61, who is to be re-elected this week at the UAW's convention in Las Vegas. Last month the union voted to strike bankrupt car-parts maker Delphi if it goes ahead with a plan to have a bankruptcy judge toss out its labor contracts. A Delphi strike would quickly shut down its biggest customer, GM, still reeling after losing $10.6 billion last year. Intense negotiations between the union and both companies resulted in a deal last Friday to offer buyouts or early retirement to all 24,000 of Delphi's UAW workers. But there are bigger issues to resolve before an Aug. 11 court hearing on Delphi's bid to void its labor contracts. The parts maker wants to shed thousands of workers and cut wages from $27 an hour to $12.50. "This is a very tough thing for the union because they've had it so good for so long," Delphi CEO Steve Miller told NEWSWEEK. "But now all of a sudden it's come to the point where it has broken Delphi and put GM in jeopardy."

With Detroit's future on the line, Gettelfinger has to engineer a new, leaner model for work and pay in the struggling American auto industry. The hardest part will be selling it to his anxious members. Last fall the rank and file barely ratified a plan to trim their generous medical benefits to help GM and Ford with their crippling health-care costs. "Ron's got one of the toughest leadership jobs in the world," says former Ford CEO Jacques Nasser, a close friend. "But he's a very creative person, who's driven by what's good for the total business, not just one side."

Endorsements from execs usually don't give labor leaders much cred on the shop floor. But Gettelfinger, who declined to comment for this story, has won over the troops with a mix of piety and pragmatism. A devout Roman Catholic who doesn't smoke, drink or kiss women other than his wife, Gettelfinger is known as the Chaplain of the UAW. He's also a sophisticated negotiator who hired Wall Street bankers last year to go over GM's books to convince himself—and his members—that the automaker was really in crisis. "We've got as much to lose in this thing as anybody," he told NEWSWEEK last year. "In fact, we've got more to lose." That's even more true today. Says GM CEO Rick Wagoner, Gettelfinger "recognizes that our interests and our fates are quite intertwined."

—Keith Naughton



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