Friday, January 19, 2007

UAW: Expect sacrifice

Tuesday, January 16, 2007
UAW: Expect sacrifice
This year, it's not business as usual as union tells members that concessions may be needed to help Big 3 survive.
Sharon Terlep / The Detroit News

DETROIT -- The message coming down from the United Auto Workers' top ranks as they prepare for this year's contract talks is not the hard-line rhetoric of the past.

Labor leaders are talking to rank-and-file workers about sacrifice and the need to help Detroit automakers become competitive again.

They're warning of difficult negotiations ahead and reminding members of the financial problems and intense pressure facing the companies.

Last month, UAW Vice President Cal Rapson told union leaders from General Motors Corp. plants around the country that "the way we conducted business in the past when General Motors was very profitable, would have to change," according to a recent note to workers in Warren, Ohio. "He made some comments that if we didn't make changes, we wouldn't survive in the future."

The comments signal a major shift in tone for a union that traces its roots to firebrand leaders like Walter Reuther and the famous sit-down strike in Flint.

Negotiations are set to begin in earnest this summer with the goal of securing a new labor agreement when the current four-year pact expires in September.

Ford Motor Co. has started monthly talks with its union chiefs.

And DaimlerChrysler AG's Chrysler Group will enter the 2007 talks from a far weaker position than it was just a year ago.

"If we don't make a profit, we don't have a plant," said James Kaster, president of UAW Local 1714, which represents workers at GM's factory in Lordstown, Ohio.

His plant has a program under way to educate workers on why GM's financial success should matter to them.

"You can't just say, 'Hey we're going to do things the old way.' That's a huge change for us."

During the 2003 negotiations, the UAW was able to gain ground on wages and benefits and held on to key provisions such as the jobs bank, which allows laid-off workers to receive full pay.

However, the union did agree to a lower pay scale for new hires at major suppliers Visteon Corp. and Delphi Corp.

It's a new environment

This year's talks are likely to be far different. While the union can be expected to fight for the best possible deal, it appears to be taking a pragmatic stance.

"We have made a conscious choice to put aside the adversarial approach," UAW Vice President Bob King said last year.

Unprecedented pressures are driving the change in tone. The domestic automakers combined lost nearly $7 billion in the third quarter of 2006. GM and Ford have massive restructuring programs under way. Chrysler is preparing its own restructuring, expected to involve job cuts, plant closings and the elimination of shifts.

The cutbacks have hastened the UAW's membership decline. In 1979, the union boasted 1.5 million members. The number could fall below 500,000 this year.

Moreover, foreign carmakers continue to eat into the Big Three's U.S. market share, with Toyota Motor Co.'s U.S. sales surpassing Ford's in two months of 2006.

"If the U.S. auto industry is going to survive, it's going to have to change, and we're going to have to change with it." said Skip Dziedzic, president of UAW Local 1866 representing a Delphi Corp. plant in Oak Creek, Wis.

Leaders at GM have said they will focus on cutting its annual health care tab of $5 billion. GM's North America President Troy Clarke last week said retiree health care, a linchpin of the UAW's benefit package, was an area of particular concern.

"The UAW understands in a profound way the severity of the crisis," said Harley Shaiken, a labor expert at the University of California-Berkeley.

GM is working to increase that awareness among employees with a finely tuned message that balances appreciation for the union's sacrifices with a clear message that more is needed.

Already, GM and the union have agreed on landmark changes to health benefits designed to cut GM retiree health care liability by $15 billion and cut annual health care costs by $3 billion. GM and Ford also struck deals with the UAW that will lead to the early retirement of more than 72,000 union workers.

"There's been the realization by everyone that these are incredibly challenging times and our fates are linked," GM spokesman Dan Flores said.

Across town, Ford posted the deepest losses of the Big Three in the third quarter, finishing $5.2 billion in the red.

Like at GM, UAW members at Ford are hearing the message that some sacrifice may be necessary.

"It's very delicate this year," said Jim Stoufer, president of UAW Local 249, at Ford's plant outside St. Louis. "Common sense tells you this is going to be rough. We are going to have to play ball with Ford and keep them competitive. But there is going to come a line that we won't cross."

Chrysler stance may change

Chrysler, reeling from a disastrous $1.5 billion loss in the third quarter, will likely follow Ford and GM's lead, said Sean McAlinden, chief economist for the Center of Automotive Research.

After initially dismissing the idea of a mid-contract health care deal with Chrysler similar to the one granted GM and Ford, UAW President Ron Gettelfinger said last month that the union is reconsidering concessions. The turnaround followed an agreement Chrysler struck with China's Chery Automobile Co. to produce small cars to be sold in the United States.

Adding to the pressure on the UAW is the growing number of nonunion auto jobs in the United States as foreign automakers build factories in the South.

Many of those jobs come with good pay and benefits, despite the lack of representation for its workers, a fact that's not going unnoticed by the UAW.

UAW: Not one solution

In public at least, the UAW's top leadership will continue to highlight their belief that better trade policies and a national health care strategy are the real keys to competitiveness for U.S. manufacturers.

"Whenever and wherever the UAW goes to the bargaining table," Gettelfinger wrote in his most recent column in Solidarity Magazine, "we're confronted more and more often with rising health care costs, outsourcing and offshoring, attacks on our secure retirements and the threat of plant closings.

"These are not local, individual issues. They are national issues that cannot be solved at any one bargaining table with any one employer."

You can reach Sharon Terlep at (313) 223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.


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