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Published: Thursday, 8/14/2003

Dana, UAW cut deal on union effort to organize

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

Ending a decades-long stand-off with the United Auto Workers, Toledo-based Dana Corp. said yesterday that it was removing roadblocks to unionization of thousands of workers at its factories nationwide.

The company said the development, which is detailed in an agreement signed with the UAW Friday but not revealed until yesterday, is unrelated to a hostile takeover attempt by ArvinMeritor Inc.

More likely, according to industry analysts, it is an outcome of mounting pressure from the nation's Big Three car makers.

Analysts expect the UAW, during contract talks under way in Detroit, to demand more help unionizing industry suppliers in exchange for relaxation of plant closing and layoff sanctions won by union bargainers from auto manufacturers in 1999.

Either way, the development is an about-face for once-heavily unionized Dana, where unions now represent just 25 percent of the work force as a result of relocation of factories to the South and active opposition to organizing attempts.

“A lost sheep is returning to the fold,” quipped Sean McAlinden, a labor analyst with the Center for Automotive Research in Ann Arbor.

He said Dana officials likely recognize that more and more Big Three business, especially at General Motors and Ford, will go to union suppliers after the current bargaining is concluded. The current union contracts with the Big Three expire Sept. 14.

“We're looking for a positive partnership with Dana,” UAW President Ron Gettelfinger said in a written statement. “Corporate officers at Dana have shown tremendous leadership in developing a proactive strategy that respects the rights of employees.”

Mr. McAlinden said the agreement could lead to UAW deals at other auto parts suppliers, especially those which, like Dana, are a target of union organizers.

The company's deal with the UAW is not the first of its kind. Similar agreements exist with Johnson Controls, Inc., Metaldyne Corp., and Magna International, Inc., according to analysts. The one at Johnson Controls occurred only after a UAW strike at some of its plants crippled the company and hurt Big Three automakers.

The agreement at Dana, a Fortune 500 firm and Toledo's largest corporation, came peaceably. The firm, which is 99 years old, had $10.3 billion in revenues last year.

The company has not disclosed details of the deal. But the UAW, in a separate announcement, said Dana will recognize the union when a majority of employees at a plant sign forms indicating they want representation.

The company will end its demand that union representation issues be decided by federally supervised elections, which unions complain are rife with employee intimidation and management abuses.

Additionally, if a first contract at a Dana plant is not negotiated within six months after union representation, both sides have agreed to let an arbitrator settle disagreements. That assures the union will get a contract and the company will avoid a strike during initial bargaining.

The deal affects Dana factories nationwide that supply General Motors Corp., Ford Motor Co., and DaimlerChrysler AG.

Neither Dana nor the UAW was able to say how many employees are potentially involved. But a company spokesman said yesterday that Dana operates about 215 manufacturing facilities employing 25,000 people in the United States. The UAW represents workers at nine of the factories. Workers at 11 more are represented by other unions.

The UAW is circulating membership cards in Elizabethtown, Ky., where 1,000 Dana workers make frames for the Ford F-150 pickups and other models.

Nick Cole, the firm's senior executive responsible for labor relations, denied that the agreement resulted from pressure from the Big Three.

“This agreement is a result of lengthy discussions with the UAW, during which both parties acknowledged the positive impact our relationship can have on maximizing Dana's competitive capabilities to successfully address marketplace challenges,” he told The Blade.

Hourly wages at unionized parts plants average $15 to $17, which is $4 to $5 more than at nonunion plants, according to the Center for Automotive Research.

But the union is well aware of problems facing parts producers, including foreign imports and price concessions demanded by the Big Three, said Mr. McAlinden, the analyst in Ann Arbor. Profitability will influence its wage and benefit demands, he added.

The Toledo firm likely will use the agreement to try to increase its business from U.S. car makers.

Ford and DaimlerChrysler are Dana's largest customers, according to the firm's securities filings. They accounted for 18 percent and 10 percent of the firm's sales last year, down from 23 percent and 18 percent two years earlier.

For the union, this deal and the prospect of others with suppliers such as TRW Automotive, Livonia, Mich., represent a chance to stem membership losses. The union roster nationwide slipped to 715,000 from 1.5 million 25 years ago.

A TRW spokesman said he was unaware of similar discussions under way between that company and the UAW.

A spokesman for ArvinMeritor, a competing auto parts producer that has offered $15 a share for Dana stock, declined comment on the development other than to say: “We remain committed to the transaction.”

Financial analyst Efraim Levy, of Standard & Poor's, discounted the possibility that Dana was using the deal to make itself a less attractive takeover target.

“Given a choice, most companies would not want to be unionized,” he said. “But Dana, especially a Dana that wishes to remain independent, would be hurting itself if it was potentially adding cost as a takeover mechanism. I think Dana is looking at it more for its long-term future.”



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