Category: Unions

By on February 27, 2017

Elon Musk ice cream

With his employees showing a growing interest in unionization, Tesla CEO Elon Musk shot off a lengthy email to staff urging them to forgo joining the United Auto Workers. While the UAW has romanced Tesla’s growing workforce for years, a recent — and highly publicized — blog post written by an employee expressed renewed concern over the company’s treatment of its workforce, as well as his hope to see them join the labor federation.

Musk initially reached out to the press to defend his company and is now appealing to workers directly, refuting allegations about subpar wages and condemning an earlier investigation into worker safety. “After looking into this claim, not only was it untrue for this individual’s team, it was untrue for any of the hundreds of teams in the factory,” he wrote. Read More >

By on February 23, 2017

tesla factory fremont

After posting a profitable fall quarter, Tesla returned to spending more than it made. However, its fourth quarter losses, announced on Wednesday, were substantially less than originally assumed by analysts. The electric carmaker’s stock price continued to climb during the final three months of 2016, despite losing $448 million from its operations.

Tesla has been throwing a lot of money at projects and acquisitions. It recently purchased SolarCity and Grohmann Engineering, so going into the red was to be expected. However, the dark cloud looming in the distance isn’t related to capital — it’s about production. Read More >

By on October 28, 2016

Borgward BX7

Although it would been cheaper to build elsewhere, the Chinese-resurrected Borgward has opted to return to its hometown of Bremen for its new factory. Not only is the Germany company back after a half-century absence, China is also giving it a proper homecoming.

That, time is running out for Ford as union strike date nears, Toyota invests in a future of needing fewer cars, and Alfa’s Giulia is changing shape… after the break!

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By on October 16, 2015

Chickens

The union representing workers at the Fiat 500L factory in Kragujevac, Serbia has a big job ahead of it. Workers are demanding raises, bonuses, and a steady work schedule. In its most recent newsletter, the union listed those demands once again, but instead of news of a pay negotiation the union told workers they’ve negotiated a chicken discount at a local butcher.

Samostalni Sindikat FAS has represented workers at the 500L factory since their collective bargaining agreement was signed in 2010. At the time, the union was able to negotiate fair wages and additional benefits for workers, including a 31,000 RSD ($294 USD) monthly average salary. Workers were happy as many were unemployed after Yugo production was shut down in 2008, and the wage was considered fair at the time.

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By on February 22, 2014

.rabbittruck

Don’t let anybody tell you the economy’s tough nowadays; when our beloved, game-changing Managing Editor, Derek Kreindler, posted in a Facebook auto-journo group offering cash money to anybody willing to write a pro- or anti-UAW piece for this esteemed publication, only one of the several hundred members even bothered to contact him about it. I don’t know about you, and I don’t know about me, but the bacon-and-buffet junketeer crowd is doing just fine.
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By on June 24, 2013

DB2013AU00606_medium_1-450x300

As Volkswagen gears up for a decision on expanding their Chattanooga factory, a member of Volkswagen’s supervisory board told the Handlesblatt that any new product would be contingent on VW adopting a works council (explanation by our own veteran of Volkswagen BS here) for the plant.

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By on January 21, 2013

The cost of doing business in Canada may be high for auto makers, but that isn’t stopping GM from looking to re-negotiate their contract with the CAW nearly a year in advance as a means of keeping production of the Chevrolet Equinox and GMC Terrain at the CAMI plant in Ontario.

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By on December 7, 2012

 

Many people don’t realize that most of the “import” cars bought and sold in America no longer roll off a boat, but off an assembly line somewhere in the American heartland. Or at least in the North American heartland. It comes as an even bigger surprise that these cars are one of America’s most successful export products, going from American ports to many countries in the world – where people often are likewise ignorant of the car’s American origin. Read More >

By on October 24, 2012

There is a shiny new car factory in Chattanooga, Tennessee. People enjoy working at this Volkswagen factory. The factory is airy, there is a lot of space inside and outside the factory for expansion. However, it will be a while until it will make more than the Passat. The people in Tennessee had hopes for Audi moving in here. Instead, Audi decided on going to Mexico. When the new Golf MkVII comes to America, it will be made in Mexico. There is no other car in sight for Chattanooga. Why is the factory, one of the best specimens in Volkswagen’s vast global collection, losing out on new jobs? The Chattanooga Times Free Press thinks it knows the reason: Lack of free trade agreements. Read More >

By on March 22, 2012

Looking for a way to stop the chronic bleeding of money at it notoriously loss-making Opel division, GM has been crunching numbers to see what it would cost to close one of its European plants. Bad news for GM stockholders: Relief won’t come cheap, and it won’t come soon. Read More >

By on January 3, 2011

The UAW today released its complete “Principles For Fair Union Elections” [full PDF here], the document that it wants every transplant auto manufacturer in America to sign ahead of its organizing campaign which kicks off later this month. With so-called “card check” legislation dead in congress, the UAW hopes to shame foreign automakers who manufacture vehicles in America to guarantee certain concessions to the union that, having helped kill off its Detroit “partners,” now owns large stakes in the bailed-out successors to GM and Chrysler.

In the past the UAW has failed to organize a number of transplant factories, including Nissan’s Tennessee plants and Toyota’s Kentucky factory, and the introduction of these principles ahead of the next organization attempt signal’s the UAW’s perspective that “manipulation” by management prevented UAW organization in transplant factories. If bosses from Nissan, Toyota, Subaru, Honda, Volkswagen, BMW and Mercedes don’t sign onto these principles, they will be on the menu for the UAW’s new campaign… but are the principles worth agreeing to? Let’s take a look…

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By on August 4, 2010

Earlier this week, newly-elected UAW President Bob King gave a speech before the Center For Automotive Research Conference, touting the deep changes that have transformed the union. The first half of King’s speech sounded a much-needed note of contrition, and highlighted the new spirit of cooperation between the UAW and Detroit’s management class. But a number of observers noted that the second half of King’s speech represents the flip side of the UAW’s new sense of responsibility for the fate of Detroit: a commitment to targeting the transplant factories that have made life hell for the union and the Detroit automakers alike. After all, nothing brings enemies together like a common adversary. But the UAW’s enemy isn’t just South of the Mason-Dixon line… it’s lurking within its own confused body politic.
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By on February 6, 2010

Recently, there have been voices that mentioned that the attacks on Toyota could be politically motivated. Let’s face it: Toyota has problems. So have other auto makers. There are marked differences in reaction to and treatment of these problems.

One of the tenets of warfare is that you never attack the innocent. You wait until your opponent bumbles. Tricking an “enemy” into doing something really stupid, and exploiting this to declare a “righteous” war, is as old as Julius Caesar. Being the “defender” makes you a winner in the war of  public opinion. You need the public on your side to win a war.

Using an outside scapegoat to deflect criticism is the oldest trick in the book. Time and again, people fall for it.

The Japanese were docile, polite, and cautious when in came to Toyota’s troubles. The more surprising is today’s piece in the Nikkei [sub]. Usually, we don’t copy and republish whole pieces. But in the name of authenticity, and because the Nikkei is only available on-line as paid subscription, we make the whole piece available. Read More >

By on January 21, 2009

2008 was supposed to be a banner year for Hyundai. The company predicted a huge sales jump and promised a new flagship. And then 2008 actually happened. Sales were, well, you can guess that one. From a sales and PR point-of-view, the new, V8-powered Genesis was well received. From a sales perspective, not to much. Still, as one Hyundai Marketing VP put it, “if [consumers] aren’t forced to reconsider us, they won’t.” To paraphrase Elvis, perhaps we ought to give Hyundai a little more time. Meanwhile, the comparison between Hyundai and a young Toyota seem to have faded from view. In fact, you could make the case that Hyundai is more GM than Toyota. Well, if not you, me.

Perhaps one of the biggest similarities between GM and Hyundai: a disfunctional relationship with its organized labor. Actually, the comparison leaves the GM-UAW relationship looking downright touchy-feely. In 2006 alone, Hyundai lost 118,293 vehicles worth $1.75b due to strikes and walkouts alone. When it refused to pay year-end bonuses of 1.5 times the monthly pay (even though the production goal wasn’t met… due to strikes and walkouts) workers (wait for it) walked out.

Hyundai caved a few days later, with bosses calling the bonus as a “fresh deal” and “an opportunity to clearly recognize that appropriate remuneration can only come after workers achieve the goals.” But Hyundai management is well-trained by now. Their notoriously militant union has held a strike every year since 1987. Except for 1994. Maybe NAFTA scared them for a year. In any case, if the brand that was launched by Rodney King wants to join the Toyotas of the world, something will have to be done about its labor relations.

But Hyundai management doesn’t have much moral high ground from which to fight. The antics of President Chung Mong-koo would make Blagojevich blush. Mong-koo was convicted on $100m embezzlement and bribery charges–and then freed on the grounds that he could “contribute to the company and the national economy one last time.” Although his son Chung Eui-sun has left the top spot at Kia, he’s still considered the dynastic heir apparent to his headline-grabbing father.

Kia was supposed to provide an opportunity for Eui-sun to prove himself. That hasn’t panned out. High steel prices in Asia and union turbulence have played merry hell with Kia’s thin profit margins. “Kia’s profitability this year and its longer-term competitiveness depend largely on labor flexibility,” says Stephen Ahn of Woori Investments. His theory: it will be better for Eui-sun to keep his hands clean. With another Hyundai strike looming and some serious coming to terms with economic reality ahead, he may be right.

So Eui-sun will stay on as head of Kia’s overseas operations, busying himself with successful Slovakia operations and a giant factory under construction near West Point, Georgia. While basking in the glow of Kia’s new products, from the current Euro Cee’ds to their forthcoming cousins, the Soul, Forte/Spectra and YN. But even on the product front, more symptoms of “Big  Company Syndrome” loom for the Hyundai conglomerate.

If the Genesis got people thinking differently about Hyundai, a super-Genesis will bring in the few remaining skeptics, right? That seems to be the thinking behind the Equus, the troublingly named, packed-with-technology, S-Class fighter. The car will clock-in with a reported price tag north of $95k. Luckily for Koreans, recent rumors of a stateside debut for the Equus means grey-market imports a la Genesis can begin.  

Even at a lower price, the Equus reeks of “Big Company Syndrome.” Whereas the Genesis adds least some enthusiast rear wheel-drive panache to the Hyundai brand, the Equus is a staid limousine. Its owner (Chung Mong-koo?) will likely never stray from the back seat, as he or she is shuttled from payoff to “political fundraiser.” More importantly, a $96k car in the midst of an economic downturn doesn’t say anything positive about the Hyundai brand that the Genesis doesn’t. A budget S-Class is one thing, a Hyundai Maybach is another. And that’s before you start on the name.

In reality, Hyundai is letting Kia take over as the purveyors of cheap and cheerful. And as the “junior brand” picks up its game with the Forte and Soul, Hyundai is chasing the American brands with SUVs, Crossovers and RWD offerings. Product overlap between the two brands, a coming labor confrontation and untimely upmarket ambitions by Hyundai may be enough to take some shine off the Hyundai-Kia juggernaut. Moody’s is eyeing a credit rating cut for Hyundai-Kia, as a weak Won kept things from getting too nasty in 2008. This year will be tougher still.

By on December 27, 2008

One of the uncomfortable facts about the automobile industry: its pay rates have been exceptionally high almost from day one. That said, just how much of a factor worker wages (and the cost differences that go with them) have to do with Motown’s meltdown is debatable. One thing’s for sure: the United Auto Workers (UAW) refusal to re-negotiate their current contract– repeated within two hours of the President’s cramdown conditional bailout bonanza– puts it squarely in the firing line for both sides of the “debate.” When trying to understand their seemingly suicidal recalcitrance, history is our guide.

For all of its famous affect on “creating America’s middle class,” it’s important to remember that Henry Ford’s “five-dollar day” (actually a bonus program) was a solution to an intractable problem. Put simply, Crazy Henry had to hire 40k men a year to have 10k working.

There are two things that haven’t changed about auto assembly since those early days: assembly-line work is a grind (imagine doing the same thing, 500 times a day) and auto production requires a steady work force. The initial raise in pay was to give the worker a stake in sticking with a nasty job. Yes, the worker could be replaced. But replacing him slowed the whole process down.

While there have been epic debates, and not a little violence, over unionized automotive workers’ wages and conditions, they generally conform to a worldwide pattern. The type of union– “company” (tame), “trade” (often bribed into submission) or “Industry”– doesn’t have much effect on the outcome. Recent surveys revealed developed world hourly wages for assemblers as more-or-less equal. It’s the “other” stuff– health care and pensions– that makes the biggest difference.

In theory, the USA’s lower corporate taxes should compensate for the advantages enjoyed by automakers operating in countries where employees get their health care and pensions from their government. In practice, Detroit’s sunk by simple math. While The Big 3 have been reducing their total workers. their pool of retired ones has been growing. Ford, GM and Chrysler have more retirees than active workers. Which accounts for much of the “$75 an hour” numbers you hear quoted in the MSM.

Worse, The Big 3 have funded all these benefits on a pay-as-you go basis. Instead of setting aside funds to cover pension and health-care throughout a worker’s career, like a company-level 401K, Ford, Chrysler and GM have been paying their retirees out of current revenues.

This is the same “trick” the U.S. government uses for Social Security. But at least the tax base is growing (and not aging much). The Big Three have shrank and aged themselves into a huge problem.

In theory, the Mother of All Health Care pay-it-forward UAW VEBA fund should finally allow the 3 to put these “legacy” costs behind them (in another two years). Only they still have to fund the fund. Putting company stock in the fund in lieu of cash is going to be about as welcome a blanket smeared in smallpox.

Pay and pension issues can always be laid at the feet of the money-men, who never looked past the next quarter. Health care and pensions can be “finessed.” But union work rules are, apparently, forever. This could be Detroit’s Gordian knot.

Put simply, you can’t. The UAW work in accordance with a series of massive documents directly exactly what every employee is allowed to do, how they should do it and how it’s judged. Having to adhere to a book of rules that practically require a forklift (and designated “operator”) to carry makes anything resembling “management” a major undertaking.

But before we lay the blame completely at the UAW’s feet, let’s consider how management performed when the Union Slacker’s Guide to Life, the Universe and Everything didn’t apply. The California NUMI plant (Toyota Matrix/Pontiac Vibe) doesn’t count. Toyota runs the show there. Saturn is the exception that proves (i.e. tests) the rules.

For GM’s different kind of car company, The General hand-picked workers willing to dump the rules, and then had them build one vehicle for almost a decade. Later on, GM set up the Aztek/Rendezvous plant in Mexico (lower cost AND no restrictions). Bottom line: both ventures failed to sell enough vehicles to make their plants pay. As restrictive as the work-rules are, they seem to conform to standard Big Three thinking as much as management thinking conforms to them.

Perhaps the UAW’s greatest sin, then, is the fact that they’ve been “along for the ride.” More specifically, a seemingly endless supply of money has narcotized the union into suicidal apathy. Worse still, their public persona projects a sense of entitlement that’s toxic to all but their closest political allies.

The UAW’s protests that “we’ve done nothing wrong” is true as far as it goes. But not doing wrong is not the same as doing right. As we shall see.

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