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Published: Friday, 10/26/2007

At 90, former UAW president notices a shift in contract negotiations

ANN ARBOR - Earlier this week, when it looked like the new contract between Chrysler and the United Auto Workers might be in trouble, I talked to a man who has seen more auto contracts negotiated than just about anyone on the planet.

Doug Fraser was president of the United Auto Workers union during the dark days when Chrysler almost went out of business, in 1979. He steered his membership through a succession of difficult contracts, and made history by becoming the first union leader to sit on the Chrysler board of directors.

Though he will be 91 in two months, he still seems as alert as when he was running the union. Chrysler was always his speciality, from the day he was hired as a "dingman" at the old Dodge Main plant in 1936, just before he joined the fledgling UAW.

When I spoke with him the Kokomo plant had just rejected the contract. That surprised Mr. Fraser, but not much. "This is really going to be a difficult contract for the workers to accept," he said.

For one thing, it sets up a two-tier pay system, with some new hires making only $14 an hour, half what others are making.

"That's terrible. A two-tiered wage system is something we've always been against. The trouble is, it's necessary in order to be able to compete with the parts suppliers."

I asked him what he thought was uppermost in the minds of those who were voting against the contract. "Well, if it is rejected, that's what we have to find out - what was in their minds."

"I think some of them thought this was an easy vote - to say no," he said, in a slightly raspy voice that still has a trace or two of his native Scotland. "They probably don't think there is much chance of a strike, and figure they'll send old Ron [Gettelfinger, the UAW president] back to the table and see what more he can get."

The trouble with that approach, he chuckled, is that if the company then gave the union further concessions, "nobody would ever ratify a contract."

Would it be a mistake, then, for the rank-and-file to reject this contract? Mr. Fraser hesitated. "I wouldn't say that. It's up to them. We have democracy in this union, and this is how it works. Only the members can decide what is right for them. That's what corporations never understand. They function under an autocratic management."

The next day, the tide began to turn as results from several large Detroit locals came in, voting solidly for the contract. Looked at one way, it is hard to see how an average union member could take the risk of voting against the pact. Chrysler is now owned by Cerberus Capital Management, a private equity firm. Not one Chrysler worker in a thousand had heard of Cerberus a year ago. There were fears that if the contract was rejected, Cerberus would break up the company and sell off the pieces.

But for many workers, especially older ones, ratifying this contract goes against their instincts. The last quarter-century has been traumatic for the entire domestic auto industry, and for Chrysler most of all.

After the firm's near-death experience in 1979 (it was saved by Lee Iacocca and federal loan guarantees), it was eventually sold to Daimler-Benz in a decidedly unequal "merger." This year, the Germans chewed Chrysler up and spat it back out to a firm that immediately took the automaker off the stock exchange and made it a private firm again.

Now, Chrysler's remaining 45,000 union workers are being asked to give up things their parents and grandparents fought for. The idea of a two-tier wage system goes fundamentally against everything the UAW, an egalitarian union, has stood for. Some workers fear that the lower wage scale will become the universal wage scale, effectively destroying their lifestyle.

Chris Ryan, a third-generation Chrysler worker in Kokomo, told the Associated Press that he felt essentially powerless. The new contract angered him, and he asked himself, "Do you want to go along willingly, or do you want to put up some resistance?"

But most of these workers can see the trends. Mel Thompson, the chief of a large Chrysler local in the blue-collar Detroit suburb of Warren, was one of those. "We know that our security lies in producing a high-quality product that customers love at a low production cost," he said, before voting for the contract.

The world has changed a lot since Doug Fraser joined the union. These days, the smartest of the union folks know that they and management are now in this together. Some of them, however, think it might be helpful if the folks at the helm of Cerberus Capital Management let its autoworkers know that they understand that, too.



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