Tuesday, April 24, 2007

UAW rethinks rigid job rules

Saturday, April 21, 2007
Outsourcing dilemma
UAW rethinks rigid job rules
Louis Aguilar / The Detroit News

STERLING HEIGHTS -- The huge temporary walls went up in the heart of Ford Motor Co.'s Van Dyke Transmission plant last August. Depending on which side of them you're on, they represent the best way to save Michigan auto factories or stand as a depressing symbol of lost jobs.

Behind the divide made of plywood, plastic sheeting and chain-link fence, 700 contract workers represented by unions other than the United Auto Workers are installing a $320 million transmission line for the next-generation Ford Escape SUV.

"We save jobs," said Rick Koloszi, general manager of Stenco Construction Corp., the Livonia-based general contractor supervising the work. "We do the job on time, we pay our workers good union wages, and then we go away and let the regular employees run the lines. That's how we help save the company money and save union jobs."

But outside the walls, some UAW workers at Van Dyke Transmission are crying heresy.

"I have to look at that wall every day and it gets to me," said Lee Gotts, a veteran skilled trades worker at the plant. "It's demoralizing. That's our job. That's what we used to do in this plant and we never even got a chance to bid on the work."

A decade ago, a non-UAW worker would not have been allowed to change a light bulb in a Ford plant, and the union fought any move to outsource union jobs tooth and nail. But with all three Detroit automakers closing plants and cutting thousands of jobs, the union has been forced to make tough choices to save plants and jobs and secure new work.

"The use of contractors gives (Detroit's) Big Three much needed flexibility," said Greg Gardner, spokesman for Troy-based Harbour Consulting, which tracks auto manufacturing productivity.

Deals are a money-saver

At the recommendation of top union executives, UAW leaders at the Van Dyke plant agreed to adopt work rules last year under what's known as a "competitive operating agreement." The deal allowed Ford to outsource the installation of the assembly line.

Ford is negotiating such operating agreements at other plants as well. Thirty-eight of the 47 plants in the United States and Canada that are run by Ford and Automotive Components Holdings, the Ford holding company that manages former Visteon Corp. operations, have new competitive operating agreements.

The agreements are a key part of Ford's effort to drive down costs and become more competitive with foreign automakers, said Ford spokeswoman Anne Marie Gattari. Workers often OK the deals by large margins, she said.

The deals generally unwind costly work rules, reduce overtime and, crucially, allow the company to outsource certain jobs to lower-paid workers. UAW workers' wages -- which average $26 dollars an hour -- are not affected by the agreements.

General Motors Corp. and DaimlerChrysler AG's Chrysler Group are pushing through similar agreements at their plants.The deals are saving Ford -- which lost $12.7 billion last year -- hundreds of millions of dollars and helping it inch closer to Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. in manufacturing efficiency.

In 2005, the latest figures available, Ford had a $2,177-per-vehicle profit gap compared to Toyota in North America, according to Harbour Consulting. Ford's profit gap compared to Honda was $1,805 and $2,839 for Nissan.

Some workers chafe at deal

Ford plant workers cast their ballots knowing their jobs could be cut or moved to Mexico if they vote against the agreements. Some workers and union officials also said they feel an obligation to help Ford survive and become competitive again.

"It's something we fought for years," said Jim Stoufer, president of UAW Local 249, which represents workers at Ford's Kansas City Assembly Plant, which makes Ford F-150 pickups and Escape SUVs. "But the leaders aren't stupid. We understand it's not business as usual."

Stoufer said about 80 percent of Local 249's workers approved a competitive operating deal.

The outsourcing is made somewhat more palatable to some workers by the fact the most of the contractors are union workers.

"We welcome the chance to keep union talent here in Michigan," said James Tharrett, president of Millwrights Union Local 48091 in Detroit, which represents contract workers at Van Dyke Transmission.

Chuni Gala, owner of Stenco Corp., said he uses only union labor at Ford and Chrysler. "It's no secret the automakers need to cut their costs and we hope to be part of that solution," Gala said. "By far, most of our workers are Michigan-based workers."

The contractors building the new line at Van Dyke transmission are from various unions representing carpenters, iron workers, electricians, and pipe fitters.

But some workers will never accept outsourcing in UAW plants. Al Figlan, a skilled trades worker at Van Dyke Transmission, has filed 47 grievances against Ford, many relating to outsourcing, and has hired an attorney to challenge the automaker.

Figlan comes from a long line of Ford workers -- his grandfather worked for Henry Ford building parts for the Model T.

Before the contractors came in, he and the other skilled trades workers installed every major piece of machinery at the plant. Two weeks ago, Figlan received word from the UAW that Van Dyke workers will get a chance to vote on the competitive operating agreement in place there.

"What we want is that we get to do at least some of the work," said Figlan, who questions how much the outsourcing really saves Ford.

"They never tell us how much these contractors are making," he said. "Every job we've done it's been on time and under budget. We've won awards for our productivity. We know how to do our jobs.

"Why would they not utilize their own people and save the money? We are the ones who buy the Ford products. The majority of the contractors don't even drive Fords."

© Copyright 2007 The Detroit News. All rights reserved.


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