By on March 4, 2013

The 12-person protest that took place at Chrysler’s Warren, Michgan truck plant got little notice in the automotive news cycle, save for a couple of mentions on the usual aggregators. In truth, it’s not the juiciest story to sell in this click-driven wasteland, though these stories tend to raise the most interesting questions. This example highlights an issue that is going to dog the UAW for some time – how will the UAW control their workers when they are also the owners?

For the sake of context, let’s recap the story. 12 workers decided to protest a recently implemented schedule at the Warren plant, which is building the 2013 Ram 1500. As the Detroit News explains it

The new system — which has already sparked controversy at other Chrysler factories in Michigan — would split the workforce into three shifts, each working four 10-hour days a week. Those shifts would be staggered over six days, meaning that many workers would have to work Saturdays. 

Saturdays, of course, means time-and-a-half pay. If you believe the Detroit News, then the rank-and-file are unhappy about the move and are determined to fight it. But the UAW is distancing itself from the protest, noting that the move to the current schedule was first approved a decade ago.

The protest coincided with a report by the Detroit News, citing leaked internal documents that show rampant quality problems with the new Ram 1500, a crucial product for Chrysler that is enjoying a lot of momentum in a very competitive segment.

During the first hour of production Thursday, workers at the Warren truck plant built 58 pickups. But only 16 of those vehicles passed final inspection, according to company documents. Quality improved as the day went on, but just over half of the trucks assembled by the first shift were approved for shipment. A company source told The News that number should be at least 78 percent and higher than that to meet the plant’s quality goals.

Wednesday’s numbers were similar, and many employees were ordered to stay late to repair the defective vehicles, according to the source. But the number of problem pickups in the plant’s lots continued to grow. Though nearly 200 vehicles were repaired overnight, there were still 1,078 trucks parked outside the plant Thursday morning that could not be shipped because of defects, according to a company document.

The same report made sure to preface that “…morale problems sparked by the new shift schedule are only making these problems worse…”, adding another barb to a series that is uncharacteristically critical considering that the Detroit News is the hometown paper for Chrysler.

It would be tempting to ascribe more sinister motives to nefarious factions within Chrysler, the UAW or both, but the reality is that the issues plaguing Warren are really just a perfect storm of bad circumstances. On a base level, human are notoriously bad with change. Having chatted with former union members in domestic auto plants, it’s evident that these sorts of shift changes are often presented in a manner that glosses over the ugly details so that the union bigwigs can get the measure approved. When it comes time for the changes to be implemented, the rank-and-file are inevitably unhappy (though our source notes that the blame cuts both ways; caveat emptor and all that).

So, take a bunch of disgruntled workers adapting to a new shift schedule and throw in a new model launch. What did you expect? Workers and management singing kumbaya around the camp fire? It’s hard to think of a bigger recipie for disaster, save for having Bob King ride into Chattanooga on an organizing drive while piloting a Chinese-built Wrangler with a Romney/Ryan bumper sticker. Combining the shift change with a new model launch and production ramp-up may have been a poorly judged move, but in all likelihood, the defect rate will settle down in a month or two.

Meanwhile, the UAW, through the VEBA health benefits organization, currently owns roughly 41 percent of Chrysler. While Fiat is currently attempting to buy the remaining stake from the VEBA, the retiree health benefits of the union members are largely dependent on auto maker stock as well as the overall financial health of the companies. The two parties are currently locked in tough negotiations over the remaining stake, but this is likely too far removed from quality defects at one plant to have any effect on potential stock prices or the respective bargaining position of either side. What is in the mutual self-interest of both parties is the continued success of Chrysler’s auto sales – and with Ram and Jeep being the two pillars holding Chrysler up right now, the UAW knows which side their bread is butter on.

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51 Comments on “Analysis: VEBA, The UAW And The Warren Walkout...”


  • avatar

    The UAW has a duty to represent these Workers at Warren, Assembly whether or not they agree with them, I was reading about this “mess” in the Detroit Papers, is this how many US Vehicles are produced or used to be?

    • 0 avatar
      pgcooldad

      12 out of 2700 employees is a mess? That’s 0.44%, and a dream for “percent problem employees” to any business owner. 99% of Chrysler’s employees are well aware of how close they were to having the lights turned off but we never hear from them in the media.

      Also, the 3-2-120 schedule is 100% supported and promoted by the UAW. It has been used and continues to be used successfully at other Chrysler Facilities (Dundee had issues with rotation of shifts, which has since been eliminated), and is going to be implemented at Stamping, Sterling Ass’y and wherever more production is needed.

      • 0 avatar
        SoCalMikester

        I dont see why it should be an issue, as long as the most senior people get to pick their shifts and days. some people dont want to work saturday.

        If its just a random rotating schedule? Then, yeah, that kinda sucks.

        As far as unions and seniority, thats a big issue. It isnt all about pay. Its about “paying your dues” so you can get the shifts, hours, and jobs you want after being a dedicated and obedient employee for so many years.

  • avatar
    ridoca

    Amazing how quickly some people forget that three years ago they were 2 seconds away from being unemployed. There are millions of workers that do those kind of shifts, and none of them have the “issues” UAW workers have; I can only assume that the use of beer and weed is designed to combat all this having-a-job induced stress?

    As to how you conclude that 12 jackasses sabotaging the line result in it being Chrysler’s fault, I really have no idea. Are you suggesting that companies stop implementing change (after it has been announced and agreed to by both parties) out of fear that the other party will sabotage what in effect is its own livelihood? Or that they have to wait for the planets to align and no new models come down the pipes before they move? That’s not the (serious) way to run an operation.

    No sir, the fault is with those that, after agreeing to specific conditions, decide instead to unilaterally commit an act of sabotage.

    • 0 avatar
      tresmonos

      Who is to say that the end of line First Time Through percentages lie within the 12 who walked out? It could be related to a number of things: supplier issues, training issues or even a bad configuration of the testing equipment. The article certainly lays out the jump to conclusions mat.

  • avatar
    KixStart

    “A company source told The News that number should be at least 78 percent and higher than that to meet the plant’s quality goals.”

    I wonder what the goal is at Toyota? Or GM?

    • 0 avatar
      tresmonos

      I doubt it’s a goal for any OEM’s regular production. It sounds about right for a pre-production build – at the very least, a acceleration curve (ramp up during a MY change over).

      That or their internal standards are unbelievably low.

      • 0 avatar
        KixStart

        I wonder about that. I wouldn’t be surprised if Toyota’s pre-production success rate standard was the same as production (probably five nines) but in pre-production they go as slowly as necessary and stop as often as required to achieve it.

        Also, the way I read the article (the second article linked), the Ram is currently in production, not pre-production. I’d expect them to be aiming for minimum rework at this point.

        • 0 avatar
          Chicago Dude

          Toyota’s system involves learning from mistakes and identifying areas where improvements can be made.

          If their pre-production success rate was 100%, they could never get better. In other words, they need to keep raising standards so that what used to be considered a success is now considered a failure. Pre-production is a good time for that.

      • 0 avatar
        tresmonos

        I sincerely doubt that, Kixstart. Humans aren’t perfect and you have to be willing to accommodate a learning curve.

        I can tell you that pre-production builds do include ‘skips’ on the line so that the workers have more time to finish their tasks and adjust to the new process. The Ram could be on an acceleration curve, we do not know the facts.

  • avatar
    Waterview

    Aside from the fact that only 33% passed during the morning shift, it makes my head hurt to think that a 78% acceptance rate meets the company’s goals for their production line. Is there any other industry where one could miss 22% of the time and remain employed? Admittedly, vehicles are complex things and depend upon many sub-systems and parts from suppliers, but this is simply laughable.

    The simple answer is to simply say “go home” for few weeks and manaufacture the trucks at another plant where the workers don’t seem to have as many issues.

    I know communities in the lower-Midwest South and where people would stand on their heads for a chance to work a job with the pay and benefits like those.

    Somehow I think the Camry plant in Kentucky isn’t kicking 22% of their production to the “reject” pile.

    • 0 avatar
      danio3834

      There isn’t a “reject” pile. There’s a final inspection and repair area where small flaws can be corrected. Most of these issues are relatively minor in nature, but important none the less.

      Ustabee, they’d roll off the line with some quality issues and if it started and ran, the motto uttered would be “don’t be a squealer, send it to the dealer”. It’s much rarer for these issues to make it that far now.

      • 0 avatar
        geeber

        This past weekend I spoke with a man who worked at a large northeastern dealership that sold Oldsmobiles, Volvos and Mazdas during 1978-79. He said that each Oldsmobile had about 25 obvious flaws that needed to be corrected before it could be delivered to the customer.

        • 0 avatar
          doctor olds

          @Geeber- The man from the NE dealer must have a very bad memory!
          In that time frame, Oldsmobile sales were constrained only by production capacity because they were so popular. Olds had 3 of the top 10 selling cars, with Cutlass consistently at #1.

          I asked a salesman at a Chevy-Pontiac-Olds-Buick store why Cutlass sold so much better than the other brands and he responded that they were just better. Oldsmobile continued to sell more than a million cars a year through 1986, only one of three brands to reach that level in the era.
          Mazdas were actually cited by Oldsmobile’s chief engineer as the best quality cars of the day. Volvo certainly was not.

          • 0 avatar
            geeber

            Dr. Olds, the fact that Oldsmobiles were selling well doesn’t prove that this person (who has written several automotive-related books, and is a columnist for a major special-interest automobile magazine) has a faulty memory.

            Standards were lower at that time. Oldsmobiles were definitely among the better-built cars of that era. Talk to people who sold Chevrolets, Fords, or Chrysler products during the late 1970s and early 1980s – they had to finish the assembly process on virtually every new vehicle that was delivered to the dealer!

            Oldsmobiles were not the greatest by our standards, but virtually everything else from the domestic manufacturers at that time was WORSE! THAT is why many people were buying Oldsmobiles during that era.

            Read the results for the 1979 Oldsmobile Toronado and 1981 Cutlass Supreme in the old Popular Mechanics “Owners Reports” surveys. Quite a few people mention sloppy workmanship, even if they did like their cars.

            The problem came when they were exposed to Japanese cars with better build quality and reliability. Oldsmobile owners may have been satisfied, as most of their exposure was to other domestic cars, and Oldsmobiles (particularly the intermediate and full-size models) were better built than their competitors.

            My parents were loyal Oldsmobile owners – they had a 1967 Delmont 88 Holiday sedan, followed by a 1976 Delta 88 Royale Holiday sedan and then a 1982 Delta 88 Royale sedan. They liked those cars, but my mother would drive my Honda Civic, and ask, “Why can’t GM build a small car as good as this one?”.

            She saw what had happened to our neighbor’s 1975 Vega hatchback (it developed huge rust spots within two years) and heard the horror stories of friends and relatives who bought an X-car.

            Guess what – she wasn’t the only one asking that question.

            Meanwhile, neither my brother nor I have a GM vehicle in our garage, and haven’t had one for over 12 years.

          • 0 avatar
            CJinSD

            geeber,

            I worked for a new car dealer in 1989. The long time service guys didn’t mention a number like 25 obvious flaws per car, although perhaps they weren’t as picky as the guys at the NE dealer. They did tell stories about entire car carriers of Cutlasses showing up with dry differentials, missing components, and ordering lots of white cars so the paint flaws didn’t show up. They were still going over every new Oldsmobile, but the impression that I got was that they weren’t as bad as they had been, and picking up the Saab franchise around 1985 had made Oldsmobiles seem pretty decent. They also sold Hondas on the same lot. They were pulled off the car carriers and parked until a customer wanted them, unless they were going in the showroom or front row, in which case they were washed.

          • 0 avatar
            doctor olds

            @Geeber! You are right about that, particularly the unimagined quality levels of the Japanese cars of the time. On the other hand, people just didn’t want them. They wanted our big, rwd cars. Empirical info to keep in mind- We still sold 1,000,000 a year until 1986, when the FWD changeover was complete, inspite of the quality being inferior. I’ve often said Cutlass was the Camry/Accord of its day with 25% of the midsize segment. The comparison is especially good in that C/A won the segment with that quality. At the same time, it took years and much larger versions to get to the top.

            Our cars were no where near as bad as the salesman said, and still good enough to sell very very well until the RWD Cutlass was discontinued after a run of 1988 models.

            You cite just some of GM’s many quality problems. I lived it as a District Manager for Olds and other jobs at the time and through the disastrous re-org begun in ’84. The revolutionary design changes we made to meet CAFE combined with the demolition of our divisional practices, structures and methodologies put Olds on the road to oblivion. The things that had kept us at the top of the domestics disappeared in confusion as the organization was sliced and diced frankly, and drove our quality and ability to recognize and fix problems down when they needed to go very the other way!

            For the last twenty years of my career, I was in the loop to know where most all of “the bodies were buried”, quality problems, cause and corrections across the globe.

            My argument is always the same. GM of today is nothing like the GM of that day. They wouldn’t be running so close behind Toyota in quality surveys today if that were not true.
            So you know I understand very well: we owned a ’74 Vega my wife had bought against my advice before we married. Fenders and hatch lid rusted through. I should have dumped it, but put a lot of work into a repaint. Finally decided it was over when the exhause fell off and there was nothing to even wire it up to! Gotta stop before going off on why central office team designed Vega was such a disaster.

          • 0 avatar
            geeber

            Dr. Olds, I grew up in an Oldsmobile family, and those cars provided good, reliable, comfortable service. I was a member of the Oldsmobile Club of America until 2003.

            The only Oldsmobile that was troublesome was the 1988 Delta 88 Royale Brougham, which required numerous trips to the dealer to replace faulty components. Fortunately, the dealer was very cooperative and helped “save the day” for GM, at least as far as my parents were concerned.

            Until late 2000, I had a 1972 Oldsmobile Cutlass Supreme Holiday coupe, which was a great, tough car. Sold it when I was in danger of losing my low-cost garage space, as my 90-something grandmother was beginning to need help just to do daily chores at her house.

            My parents still have GM cars – an Oldsmobile Bravada and Buick Lucerne.

            My wife had a 1999 Chevrolet Cavalier while we were dating. Its air conditioning died completely at 50,000 miles (same thing happened on the Cavaliers of two friends), and it then experienced major engine trouble at 113,000 miles. Which is odd, as those cars were not noted for this.

            She now has a 2005 Ford Focus SE, bought brand-new, with 162,000 trouble-free miles on the odometer. So we’re not completely against domestic cars.

            I have nothing against some of the new GM cars, but I’ve been quite satisfied with my 2003 Accord EX sedan (192,000 trouble-free miles), and I like the dealer who sold it to me and services it.

      • 0 avatar
        tresmonos

        There are ‘repair’ bays for normal production issues. If there is a massive defect caused by a supplier, the yard is utilized to contain issues until a supplier can pay and execute an on-site modification (stop-ships, etc.). Inventory control is ridiculously tight to ensure corrected issues get bought off prior to shipment.

        Modern final assembly plants have so many end of line checks after each turn in a line that operator related issues get handled in short order by each section leader or line supervisor. To think that operator-induced ‘shit’ gets pumped out the gate would be erroneous. There so many quality audits for produced units and online inspections that catch new defects and defects identified by customer complaints that it’s mind-numbing.

  • avatar
    Toad

    Hard to imagine that companies are not flocking to Detroit to build new factories…

    • 0 avatar
      28-Cars-Later

      Shocking.

      • 0 avatar
        vent-L-8

        remember when those chrysler employees were caught on camera smoking weed and drinking while on the clock? Then a year later they all got their jobs back after the union backed them. I wonder if they received a year’s back pay … plus interest … plus pain and suffering…?

        • 0 avatar
          raph

          @ vent-L-8

          The union arbitrator was probably competent at thier job and/or had enough dirt on management to force it through.

          For example at my job one of the people responsible for administering the drug testing program couldn’t pass the same drug test if they tried yet they are responsible for making sure aplicants can pass the test and who gets fired.

  • avatar
    doctor olds

    The Company spokesman said, “As with the launch of any new vehicle, there were internal issues with the launch, but we were able to contain those issues,”
    These numbers refer to startup issues. How do you think they know the success rate?

    Typical of complex new model startups, build problems surface and are addressed by process changes from those early learnings. It is not clear whether these particular build problems are the fault of workers, design or assembly process.

    Though another journalist writes of the two issues with a conspiratorial tone, that should not be relied on to connect the dots that workers sabotaged the build in some way so as to get overtime. I can assure you in the massive activity that is a vehicle assembly operation, things are seldom that simple.

    Start ups are carefully controlled and evaluated with the goal being to assure the system can not produce bad output, but in the event it fails this, to contain the the disrepant material the job or in the plant until the issues can be resolved. Plants can’t run at rate with continuously overwhelmed repair operations.

    Chrysler does not stand with Toyota and GM in quality rankings, but they are sure attracting customers and the price of entry to this competitive market is high quality. The proof appears to be in the pudding.

    • 0 avatar
      Toad

      The preceding message brought to you by the Detroit Chamber of Commerce. The second to the last paragraph in particular sounds like a press release.

      “Nothing to see here, move along.” – Officer Barbrady, “Southpark”

  • avatar
    Good ole dayz

    Thanks to the Obama administration the taxpayers of this nation (using money largely borrowed from China) bailed out not Chrysler and GM, but the UAW. Both by handing huge ownership stakes in the “new” entities to the UAW — for free — but also by imposing a faux prepackaged Chapter 11 reorganization that provided the foregoing, as well as insulated the UAW contracts from restructuring and left the legacy costs (pensions) untouched.

    And this is the thanks we get.

    It’s just a matter of time before the UAW manufacturers are again at the precipice.

    Hopefully this time the established bankruptcy reorganization process will be allowed to occur, if not the Chapter 7 dissolution. The UAW offers no value proposition, only higher costs, lower quality and an infuriating sense of entitlement.

    • 0 avatar
      indi500fan

      Bush had to borrow from China. Obama just has Bernanke/Geithner (now Lew) create minibucks electronically.

      • 0 avatar
        rnc

        I’m sorry, I really don’t give a sh!t about politics but you don’t get to make revisions to history just so it fits your needs, TBTF, TARP, QE, unlimited access to the fed window and all of the other assorted fireworks and fun that you speak of started under Bush (think somewhere estimated b/t them all $3 trillion or so in his last few months in office was created), just kind of like Reagon’s “Lets create an economy out of debt” Skit, its one of those things that once started, it becomes really hard to turn the gas off (and there aren’t many presidents like Bush I who are willing to sacrifice a 2nd term to do it, let alone an entire middle congress, close to retirement that weren’t worried about terms either, those stars aren’t going to align again), think 2007 and whatever was bad, let the government turn the gas off (for once I’m thankful, I took the pay trade to work for a financially healthy county government and I’m the only person here that performs my tasks), b/c if the kamakazi’s in congress ever got thier way (which of course wouldn’t have been at all what they really wanted when it goes bad), I’m in the safest place I possibly could be. And anyone who doesn’t think that the debt monster % of GDP is directly correlated to thier income is living in a dream (probably with a bunker under thier house, a lot of guns and a framed picture of RF hanging up somewhere)

        • 0 avatar
          Landcrusher

          Sorry, but you are revising things yourself. Reagan didn’t start deficits, he merely settled for them to get his higher priorities accomplished. My fellow Texan, LBJ, gets my vote for starting us on this path. Nixon then gets the vote for most foolish schemes to fix the deficits and likely making them worse.

          Deficits really have no real relationship to tax rates since LBJ. He doubled down on the New Deal and totally went over the tipping point. Once you make luxuries for the median earner and below a necessity, tax rates can be set at any level and a deficit will persist.

          TINSTAAFL

    • 0 avatar
      and003

      And how exactly do you propose that Chrysler and GM go through regular bankruptcy proceedings, let alone Chapter 7, without adverse consequences? I doubt that any of the European manufacturers would be in a position to fill the void left by the demise of Chrysler and GM, given that they had problems of their own.

      Fiat SpA was the only company that was interested acquiring Chrysler, and even then, they had to literally create a new business entity to acquire the best assets of the old Chrysler with the government financing.

      Also, if Chrysler and GM went out of business, some of its suppliers might have gone down with them, and since Ford and some of the foreign transplants do business with these same suppliers, they would have been adversely affected also … and that’s to say nothing of the towns where Chrysler and GM plants are located.

    • 0 avatar
      SoCalMikester

      Even Ford? Theyre UAW also, but I also think they have the best leadership. GM is still up to the same crap, and Chrysler? Well, they have Ram, Jeep, and some solid Mercedes technology theyre milking.

  • avatar
    bucksnort

    The solution is simple. Don’t buy vehicles from Obama Motors U.S. or Obama Motors Italy. There are plenty of other choices.

  • avatar
    Big Al from Oz

    Considering the number of protesters/strikers is quite small and the Union is supportive Fiat/Chrysler it makes me wonder if what being delivered to the media is accurate. If politcians “mislead” so can a business.

    As was stated, Union responsibility to the business is tied into its share of the business.

    Chysler has introduced more complex vehicles than the Ram and didn’t have these types of issues, so Chrysler should have the resources to deliver the Ram, even if its a new model.

    I don’t know what all of the problems are, but do the Rams sitting in the yard have engines fitted?

    • 0 avatar
      nrd515

      The article doesn’t even say what the problem is/was. It could be something as minor as a trim piece or weatherstrip not fitting correctly, or it could be something major. I’ve worked on cars and trucks over the years that were a nightmare to install some minor part. Ever try to do an old Ford “rim blow” horn “button” replacement? I would imagine that the training of whoever installed that part in the wheel (at whatever supplier who made it) would have been a tension filled nightmare. I knew a guy who worked at a Ford dealer for years, and even he wasn’t all that great at it. On an assembly line, it would be a nightmare.

  • avatar
    Conslaw

    If I understand correctly, at the end of 6 days, your 4-days of shifts start over. That means you don’t have repeating days off. That means that you play hell in scheduling daycare, carpooling schedules, after-school activities and everything that goes with being a parent. That works well for the person as a means of production, and not so well for a person being a person. Of course what is really important now is meeting global standards for low cost production and maximizing corporate profit. If you have other ideas about what is important, you have no role to play in modern society. You are expendable.

  • avatar
    Dimwit

    It looks like it’d be a bad time to buy a Ram 1500. I can see the whole year being a write off.

  • avatar
    Bob

    This is completely embarrassing and as a Union member I am ashamed to be associated with people who don’t care about the quality of their work. This is one of the many reasons why people have a negative view of unions. These employees should have been fired for sabotage. Anyone working 40 hours a week should consider themselves very fortunate regardless of what shift they are on.

    • 0 avatar
      28-Cars-Later

      +1, a man should be proud of his work no matter his profession or affiliation.

    • 0 avatar
      nrd515

      If they don’t have repeating days off, I can totally understand the employees’ anger. If you live alone, like I do, who cares? But if you have kids, this would be a train wreck. Seems like the union haters will jump on any excuse to blame the union for something.

      • 0 avatar
        Bob

        It doesn’t matter what days they have off. When you work in manufacturing or construction you have to accept that it’s not a 9-5 monday-friday job and that there will be times when you will be working odd shifts. It is much better than unemployment.

    • 0 avatar
      SoCalMikester

      Depends on what the “issues” are.

      If its a few people that have been there a year, and theyre mad theyll have to work graveyard? sure.

      But if its someone thats got 25 years in, always worked days, and now they have to work nights or weekends when they have other commitments? Then the UAW should figure out whats going on.

  • avatar
    CJinSD

    The more things change, the fewer people fall for the idea of change.

  • avatar
    Hummer

    Fire em… oh wait, their in a union, where the lowest of the lowest get promoted and the best workers leave because their tired of the bs surrounding them and the fact they continuously work while others sit around.
    Meanwhile over at UPS, if your nonunion manager on the belt, you can lose your job by working and helping your employees, instead of sitting around watching them and playing on your phone. As the lazy union workers think you should be done, because you can’t make them look bad!

    No wonder the Chrysler plant has a 33% pass, people on the interwebs want to support unions, yet it clearly has already caused them into bankruptcy once (twice for chrsyler)

    Also how the heck are they getting paid time and a half for working saturdays? Why would anyone complain about that, that’s absolutely rediculous I would work every saturday 12+ hours

    • 0 avatar
      SoCalMikester

      Crap products got Chrysler into bankruptcy. You can only milk the K-car so long.

      As for Saturday? Who knows? I COULD get time and a half for Sunday, if i wanted. I prefer weekends off.

  • avatar
    AJ

    These clowns need to be reminded of the joys of unemployment. And it keeps reminding me should I buy a new car, stay the hell away from any UAW built vehicle.


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