COMMENTARY

UAW contract talks to blaze a trail or reach a crossroads

7/15/2011

DETROIT — This month, a time-honored tradition will begin in the Motor City: The United Auto Workers will sit down to begin contract negotiations with Ford, General Motors, and Chrysler.

What those talks will lead to is anyone’s guess. “We’re in totally uncharted territory,” said Harley Shaiken, a Detroit native and a professor at the University of California-Berkeley who studies labor issues.

Will the companies demand new concessions? Will the workers, now that the automakers are making money, demand that lost benefits be restored? Might any new contract threaten the industry’s shaky recovery?

Apart from those questions, the UAW, which has lost three-fourths of its peak membership, is haunted by one more thought: What future does it have when fewer than half the cars sold in America are made by the companies they organize?

In a way, the fact that these talks are even being held is good news. Fewer than three years ago, it was unclear whether there would ever again be contract negotiations. Chrysler and General Motors were close to extinction. Had they failed, the jolt to their suppliers easily could have toppled Ford.

But GM and Chrysler survived, thanks to a bailout and a cushioned bankruptcy. Today, all three of the automakers are profitable again.

Yet the recovery, while real, is far from complete. Today’s automakers employ only a fraction of the workers they once did. Since the last contract, union leaders agreed to heavy concessions to save the companies, and as many jobs as possible.

UAW executives accepted those concessions without consulting the rank and file. They included accepting work rules more favorable to the companies and freezing cost-of-living adjustments.

But the most resented concession was the two-tier wage system, in which new workers are paid far less than those previously on the job — something generations of union leaders never dreamed of allowing.

Mr. Shaiken isn’t too worried in the short run. “The main issue will be jobs,” he said. The professor said “the union does not want to jeopardize” the fragile recovery.

“But they will be pressing for fairness, and a return on the investment they made in these companies by making those concessions,” he added.

He thinks the union may insist on modifying the two-tier wage system in which new workers are making as little as $14 or $15 an hour.

For decades, during the years of post-World War II prosperity, auto contract talks followed a predictable pattern. In fact, it was called pattern bargaining.

The ritual was important. The union would demand the moon. The company would offer a crust of bread. Union officials would designate one of the three companies as the strike target, meaning they’d negotiate with it first. Sometimes a deal was reached without a strike, sometimes not.

When there was a strike, it was only against the one company. Eventually, an agreement would be reached. After it was, and the rank and file ratified it, the other two automakers would adopt the basic pattern and speedily settle with the union.

It is a different world today. The UAW has agreed not to strike Chrysler or GM, no matter what, for the next four years. Their only recourse is binding arbitration.

A strike only against Ford would make no sense. Ford UAW workers don’t have the right to seek binding arbitration.

“This is a completely different playing field than what we’ve seen before,“ Mr. Shaiken said. His guess is that union leaders and company negotiators will have to endure some pushback from angry workers who may demand some share of the automakers current success. (GM reported a profit of $3.2 billion in the first quarter; Ford, $2.6 billion. Chrysler squeezed out earnings of $116 million, its first profitable quarter since 2007.) In the end, he expects a contract to be complete by the Sept. 14 deadline.

But he isn’t really sure. Even if things go smoothly, that won’t end pressure on UAW President Bob King, whose term runs for three more years.

His union faces a bigger problem: It needs to find a way to organize the “transplants,” foreign automakers’ plants that make cars in the United States. The UAW has, so far, failed to do so.

Unless it can, Mr. King said, “I don’t think there’s a long-term future for the UAW.”

The numbers tell the tale. Until production was disrupted by the earthquake in Japan, Americans were buying more vehicles with foreign nameplates than domestic ones.

But winning over the transplants may be a tough sell. Ford’s and GM’s hourly labor costs are barely higher than those at Toyota and Honda. Chrysler’s are lower. How much can a stripped-down UAW offer workers who are making a good living without union membership?

This year, Mr. King, a former auto worker with a law degree, noted that “Michigan is at a historic crossroads.” For his union, the crossroads may be that of life or death.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade’s ombudsman, writes on issues and people in Michigan.

Contact him at: omblade@aol.com.