By the end of the year, America’s automotive landscape will have changed dramatically. Chrysler Group will have new owners with new ideas (including, perhaps, dissection). Ford may or may not be in Chapter 11. General Motors’ fate is equally unclear. One big gas price spike and it’s all over bar the filing. And then there’s the United Auto Workers (UAW). This is the year the UAW renegotiates its contracts with The Big 2.5. If the union digs in its proverbial heels to maintain the status quo, Detroit’s doom will be delayed, but not prevented. As will their own.
The decisions made this week at Detroit’s Cobo Center will answer that question. The UAW’s quadrennial convention on collective bargaining opens today. About 1500 delegates representing over 800 locals from around the country will convene to discuss a number of issues facing the moribund union. They’ll have two days to establish their stand on issues ranging from contract concessions for healthcare and pensions, to what to do about their dwindling membership. They have two days to decide the future of the American automobile industry.
It won’t be easy. Just as GM is trying to extricate itself from rebate hell, the UAW must try to find a way NOT to give The Big 2.5 large concessions on healthcare, wages and pensions. Although the union’s “historic health care giveback” involved a $2b pay-off, common wisdom says the union is ready, willing and able to help Detroit roll-back their crippling labor costs. We’re going to find out exactly how far the union is willing to go to give aid and comfort to their employers.
That depends entirely on which faction within the UAW is sitting at the table. Although labor unions tout solidarity and the value of a united front, there’s a genuine power struggle going on behind the scenes.
On one side, some union bosses are happily extolling cooperation; they’d like the press, their members and the rest of the car industry to think the UAW is management’s best friend. Jim Graham, president of UAW Local 1112 stated ‘‘Management is not the enemy. They’re trying to do the same thing we are: save plants. The enemy is the Asian market.’’
Yet Graham also admits the UAW wants to get in bed with “the enemy.” He notes the UAW is trying to organize workers in the transplants’ factories. Oblivious to the fact the workers in the non-union Georgetown Toyota plant made more last year on average than UAW workers did in Detroit, he states ‘‘In order to get a decent wage, people have to be organized.’’
While the UAW’s making nice with management and trying to move into enemy territory, they seem to have forgotten that their past demands got them where they– and their employers– are today. The bountiful benefits they demanded (and received) when times were good are the excess baggage dragging down Detroit, now that times are tough. When the concession demands begin, we’ll see how long this new friendship lasts.
This brings us to the other end of the spectrum: hardcore factions within the UAW who want nothing less than a return to yesteryear. Soldiers of Solidarity, comprised mostly of Delphi and GM employees, will picket their own union’s meeting this week. They want the union to take a hard-line stance against wage cuts, pension changes and healthcare concessions.
Believe it or not, the Soldiers don’t believe The Big 2.5 are in dire straits. And they continue to see the company through the prism of class war; why should the fat cats be allowed to take food off their table? Strange but true: there are plenty of union members who’d prefer their employer’s death before personal “dishonor.”
So where does UAW President Ron Gettelfinger stand? On the fence.
"There is a great deal of uncertainty in the auto industry right now, which causes a great deal of concern among our members and their families. We're doing our best to address those concerns – but it doesn't do anybody much good to try to predict the outcome of a bargaining process that hasn't even started yet."
No matter. Gettelfinger knows that it’s make or break time for the UAW, without any clear path to “winning.” If the “modernizers” hold sway and the UAW makes company-saving concessions to save its own skin, the union’s power over its members will diminish. As Sean McAlinden from the Center for Automotive Research said, “What’s at risk here are the core values of the union.”
On the other hand, as Dave Cole from the Center for Automotive Research stated, "The existing situation is not survivable. The choice is, are you going to do something different or are you going to die with the domestic industry."
Whatever happens in the next two days, either way, Detroit will never be the same again.
Tagged as
82 Comments on “Crunch Time for the United Auto Workers (UAW)...”
Back to TopLeave a Reply
You must be logged in to post a comment.
You can also login using Facebook Connect.
I used to be anit-union until I saw workers at my old company fired on Friday and re-hired on Monday by a diffrent company to do the same job for less money. They lost their benifits, their vacation, retirement…etc.
Unions have their place and time. That place and time has passed in the domestic automotive industry.
I’m not saying they should go entirely. I just hope they will realize that they are part of the ‘team’ at Ford, GM, and DCX. It would benefit everyone if they step back off their unnecessarily high OT wages, benefits, etc…
I believe the UAW lost the battle when their organizing efforts failed at the US operations of Nissan, Honda, Toyota, and Aisin. Now it’s pretty much an effort to maintain a “controlled descent” with some survivors rather than a total “crash landing”
I really don’t think anything gets decided this week. It’s an informational meeting. Typically the delegates are the plant chairman and president, who are often as much in the dark as the rank and file. I’m guessing there’s a very small group of people in the UAW that has an idea of how they will approach the negotiations.
I’ve been saying for years and years that “This has got to be the year for a strike!” And it’s never happened. The auto companies have just given the store away repeatedely – ie. $3,000 signing bonus, plus a 1%/year raise, on top of the cost of living raises tied to the CPI. The rest of the unskilled world has gone the other direction the last decade.
So – this might be the year for drama. The 2.5 cannot afford to give the store away. The truck/SUV cash cow is dead. I think the UAW will bring a contract to the people that will be voted down. As the article said, there are many who would rather kill the golden goose than accept a little less. There are too few young people who need the job for the next 30 years.
I’ve said it before – it’s gonna get interesting.
I find it hard to think there are UAW members who genuinely believe the big 2.5 aren’t in bad condition.
The Soldiers of Solidarity (?!?) and their retarded older brother, New Directions, are total whack jobs. Plain and simple. Their view of reality is extremely distorted.
What they say in public is meaningless. Don’t forget that many union officials are elected.
“I used to be anit-union until I saw workers at my old company fired on Friday and re-hired on Monday by a diffrent company to do the same job for less money. They lost their benifits, their vacation, retirement…etc.”
Then they should have walked. Relocated to another part of the country if need be. Everyone needs to put money away for such circumstances, especially when earning above average union scale with no healthcare expenses to speak of. Financial self defense is a full time job.
The UAW workers have seen this all coming for 4 years. The crash of the SUV market and low interest rates for homes gave the smart one’s a window of opportunity and a hint: get out of the auto business while they still can.
Gone are the days when jobs, benefits, and everything else are taken for granted. People, including organized workers, have to start taking responsibilty for themselves, something unions are good at taking away from workers.
The thought of my wage, raises, work position, and advancement being decided by collective bargining is chilling. How many goof-offs and sub standard people earn too much money for too many years in a car plant?
My bet is they take a tough stance because they see Rabid Rick getting a bonus and all these foreign built domestics arriving in the dealers ( Aura, GTO, Milan, etc) and that they ride the 2.5 into the ground.
I used to be anit-union until I saw workers at my old company fired on Friday and re-hired on Monday by a diffrent company to do the same job for less money. They lost their benifits, their vacation, retirement…etc.
Welcome to the world of the contract worker where this happens more often than you may realize. A business or government agency will contract with a company for workers in a specific field (e.g. info technology). The contract is for a specific time and when the contract comes back up for bid, a different company may get it. If the workers are still needed, the new company offers the jobs first to the people who worked for the old company to keep from having to recruit new employees; unfortunately, it's usually with lower wages and benefits than they have been making (they have to support their lowball bid somehow). Since they're considered new hires for the new company, they lose the leave they may have accrued with the old company. It's up to the workers whether they want to switch over to the new company and keep their existing jobs at lower wages and benefits or stick with the original company and hope they can find somewhere else to place them.
Occasionally the specs for the new contract will include keeping the existing workers at their current salary and benefits but that's usually not the case.
GS650:
Didn’t Michael Moore’s Roger & Me mention how other local Flint, Michigan employers just wouldn’t hire ex-autoworkers as they couldn’t do anything else right?
Can you imagine an ex-UAW worker showing up for a job at a transplant? There’s probably a catapult to send those applicants away.
Actually “Roger & Me” was more about Flint’s attempts (sincere but comical) attempts to revitalize it’s workforce into something not dependent on the auto industry, but your point is correct. Transplant workers have to be able to do a variety of job in a plant, as opposed to the byzantine list of strict job classifications at unionized plants.
I for one don’t see any particular sign that the powers-that-be within the UAW have even as much as a finger on the pulse of economic reality. Over a half-century of us vs. them mentality has completely clouded their thinking.
Look for the 2007 Detroit Smackdown coming soon to a negotiating table near you…
Some random thoughts;
The Georgetown Toyota workers earning more than the unionized big three should send a clear message to the union that your employer’s sustained profit can benefit all workers.
If generous benefits are earned in good times, why can’t they be rescinded in bad times?
If the UAW were to cease to exist, what would happen to the generous wages and benefits offered by the transplants to their workers?
If the UAW were to cease to exist, what would happen to the generous wages and benefits offered by the transplants to their workers?
They might stay the same or go up as that would mean the US big 3 have pulled the plug (in their current form – Daimler-Benz flogging Chrysler- minus Jeep, GM & Ford in chapter 11 and in mexico and the south) and the UAW will have to change its name to the United Unemployed Auto Workers.
Michigan is going to be one sick state. One in 20 homes in detroit were up for foreclosure according to CNN.
I’ve never been in a union, but I worked in the front office of a unionized manufacturer doing IT support. My main memories of the job are these:
1) I was a young kid at the time, full of vim & vigor and excited to do my very best. I was on my way out to an office in the plant to take care of a PC problem. I was told by three different people to “Slow down!”. I stopped when the first one told me that and looked around – I was expecting to have just been missed by a fork truck. When I realized I hadn’t, I asked him why and he said “You make the rest of us look bad”. From that day on, I deliberatly walked consideraly slower in the plant to avoid any confrontation, and resumed my normal speed once inside an office.
2) I couldn’t move any PCs around the building myself. I had to load them on a cart, then call someone from shipping & receiving to move them for me, then I could unload them in the new location. I learned that, even though the shift ended at 4:30, I couldn’t expect to get a response if I called after 3:30, because “we’re getting ready to leave”.
I’m sure these are not representative of all union workers at all plants across this great nation of ours, but I’ll bet it represents enough workers at enough plants that it’ll totally kill manufacturing in America. Then, when the union coffers are dry, they’ll come crawling to the government looking for a hand-out because they’ve never learned the intrinsic value of working hard and *earning* an income instead of being *entitled* to one.
“The Soldiers of Solidarity”
These types of people exist in every union. There are workers who will vote “no” on every contract regardless of what it might contain. I doubt they know what CBA even means…much less read the thing. They give unions a bad reputation because they are militant zealots who make the most noise and are not guided by any sense of reason.
Check out Soldiers of Solidarity’s site:
http://www.soldiersofsolidarity.com
I’ll leave it to the readers to make up thier minds.
From the Detroit News web site (http://www.detnews.com/apps/pbcs.dll/article?AID=/20070327/UPDATE/703270434/1148/AUTO01):
The protest meant to unofficially kick off the two-day UAW bargaining convention at Cobo Center essentially fizzled.
Nineteen protestors are standing across the street from the main Cobo entrance as 1,500 delegates stream into the expo hall. The activists bear signs with slogans such as “No more concessions” and “Rights for workers” and are handing out leaflets with the same message.
They want the delegates to stop accepting pay cuts, layoffs and reductions in healthcare and pension benefits from the auto makers.
Protestor Todd Jordan, 29, said that it was tough for many rank-and-file workers to take the day off or travel to Detroit to participate. He noted that 2,500 rank-and-file members already have signed a no-more-concessions petition.
Jordan and other dissident UAW members from the group called Soldiers of Solidarity maintain that recent buyouts and layoffs have severely dampened their efforts.
Jordan, a worker at Delphi Corp.’s Kokomo, Ind. plant, said that at his facility 81 percent of workers there are recent new hires working for half the wages of their predecessors who left for buyouts, early retirements or transfers out of the bankrupt parts company.
While some of the delegates are sympathetic to the Soldiers of Solidarity movement, many clearly are not. Jordan said that one of the delegates “flipped me off” outside of Cobo Center.
Largely, the delegates are ignoring the protestors as they head in for the first of two days of debates on a 103-page resolution that will serve as a guideline for this summer’s contract talks with auto makers.
Freeman, i’ve seen the same experiences too. its ridiculous, so antiquated and about time the union died. We get in trouble for so much as lifting a finger regarding anything that a child could do. I would love to get a camera and take pictures of the guys sitting around doing sweet FA and waiting in a line, yes a line. to clock out well before their finishing times. no wonder so much is wrong with the US auto industry. In the UK, modellers, designers etc all pulled together to get things done. Here you get shot and a warning from the Union for doing the same, look at how the unions affected the UK auto industry. Time for UAW extinction, put them all on contracts as modellers and designers can be, and if they dont pull their weight, wave them goodbye. good ridance.
Small after point, UK soccer clubs have clauses in their players contracts that if the team gets relegated down a division, your pay etc reduces to take into effect the new situation, and when you win promotion/do well, again you get bonuses/original pay is resumed etc. Same principles should be introduced into the negotiations, times might be tough now, but if their belief in the company is strong for the future its worth it. Why these UAW people can’t take off their rose tinted glasses and smell reality is beyond me. What scares me is i dont think GM etc have the balls to stand up to them.
Freeman:
Thanks for the laugh. That takes me back. In my experience they would have accused you of “Killing the job” ie. working too fast.
We young engineers used to have to find new and creative ways to move things around the plant that didn’t involve Millwrights, forklifts, Shipping or Receiving. Management didn’t care about our difficulties in dealing with a unionized workforce – we had deadlines to meet.
Someone scored what we called the “Apple cart.” It was basically like a table they wheel people around in hospitals or morques, but it had low sides on it. Boy, you could pile the air cleaners or headlights on that thing and push them around the plant.
Eventually someone got really pissed about it and it wound up smashed to pieces in a dumpster. Then it was back to pushing headlights around 10 at a time on a Rubbermaid lab cart. Ahhhh….the good old days.
Good riddance UAW.
blaming the workers is an old story… the problem with the domestic auto industry is not so much the unoins or the workers…. its the fact that not enough of the cars are being sold… deciding what cars to sell where, what the look like, and how much they sell for, is a mangement decision… also where to put r and d dollars and what kind or profit (or not) to show the public or pay the shareholders.
I cannot buy domestic products because there is nothing for me to buy. I like very small,high end, zippy, fuel efficient hatchback cars, not large SUV’s, trucks, sedans or coupes. The domestics have ignored me for a long time now.
The fact they have ignored me is management decision, not the unions or the workers. Make cars that sell, and the worker problems disappear. Why is it that nearly all of the off shore producers have figured this out – and none of the domestics have? Whatever the answer to that question, the answer does not start with blaming the union. I blame management.
Many years ago, the domestics were put in a tailspin because they had no nice fuel efficicnt cars. Now the domestics are put in a tailspin because they have no nice fuel efficient cars. Management has learned NOHTING in the process. Where were they? On the golf course? Having drinks at the pool? Tennis anyone?
Dont get me wrong, blockheaded people come with both blue and white collars. But place the blame where it belongs. Produce a car that I want, and I will buy it.
Whining because you cannot produce it AND its because the labor unions suck, just pisses me off.
The UAW sucks. Big 3 management have allowed this to be so for at least 30 years. Big 3 management, past and present, is 100% responsible. That much is clear. (In other words, management signed the contract that says I need a Millwright to move a few headlights around.)
The UAW members are simply the lightning rod for all that’s going wrong. Perhaps they all should have gotten MBAs if they have a problem with this perception.
Transplant management is 100% responsible for keeping the UAW out.
Transplants = largely successful. Big 3/UAW = largely unsuccessful.
At the root that is why you choose vehicles from “foreign” companies.
I have no clue as to how labor relations in Germany or Japan allow them to be successful, even with strong unions.
The unions are one part of the problem. The other part is the dealer network which maintains useless models and brands and too much competition at retail along with poor service. As rich local businessmen, Congress kisses their asses and doesn’t allow car sellers to sell direct or try any innovation in the retail market.
“One big gas price spike and it’s all over…” Boy that is so true. If gas goes up to 4 bucks a gal. the 2.5 will wither up and die. They still don’t have a decent small car. Ford owns a nice chunk of Mazda but they refuse to notice how Mazda is cleaning up selling smaller vehicles. The new American crossovers are SUVs in a friendlier package.
Real men of genius………
“Martin Shawl, 53, a 28-year Delphi Corp. and General Motors Corp. worker from Bay City, said he doesn’t believe the Detroit automakers are in financial trouble.
“It’s voodoo accounting,” he said, questioning the timing of the Chrysler Group’s losses and GM’s restatement of earnings due to accounting troubles
He said the union shouldn’t give back anything to the companies, and it should end a two-tier wage scale that pays new hires less than longtime workers.”
In 1967, only fourty years ago, the leaders in the US electronics components business were GE, Westinghouse, RCA, Western Electric (Bell) and Sylvania. The high tech volume product was the vacuum tube and they were being manufactured by the millions, mostly in the northeastern and midwestern USA. Most of these factories were unionized. The companies were also the early makers of transistors. In fact, Bell Labs invented them. However, during the 1970s a whole new breed of electronics companies arose in the western US. These companies were never unionized and were extremely nimble and flexible. Many didn’t survive, but the ones which did have names like Intel, AMD, Texas Instruments, etc. These were some of the first US based companies to move large portions of their operations offshore, starting with the labor intensive chip assembly process, followed by testing and finally by complete manufacturing. The electronics boom in Asia was fueled by these efforts. By the 1980s local Asian companies were competing with the US and European companies in the robust global semiconductor based product manufacturing. Today the world enjoys low cost, high performance computers, communications and entertainment thanks to this vigorous world market. We are using the fruits of that effort to talk about the UAW here today.
There is absolutely no way that the Intels of the world would have developed at the speed and cost effectiveness they did had their factories and cultures been union-centric. US based companies still compete and cooperate vigorousely with Asia based companies in the electronics field thanks to the flexibility and make-it-happen attitude which pervades the industry. Average wages in Silicon Valley remain amongst the highest in the nation as part of a vigorous ecosystem with more employeer and sub-industry diversity than most areas enjoy. IBM has remained a player through all of this in part because even it’s eastern US manufacturing locations have never had a workers union.
Jobs do not exist as static things. The union notion of “protecting jobs” is actually nonsense on a theoretical level. At any given time a “job” is simply an agreement between two parties to exchange effort for cash. Such agreements may last for hours or decades, it all depends on circumstances. There is no job as a static thing, it is mearly an understanding between two parties which in general either party can walk away from with a courtesy notice period. I have yet to see any union agreement which compels a worker to stay on the job for the length of the contract. All of the commitments are one way in these contracts with the company making promises and the worker free to walk away from the deal any time they like.
The UAW has outlived it’s usefullness by decades. Time has passed it by and it has become part of the problem rather than part of the solution. Their dream of organizing transplant factories will forever remain a dream. Do you think the Tundra would be being built in San Antonio if there was any chance of the UAW getting it’s nose under the tent?
“The choice is, are you going to do something different or are you going to die with the domestic industry.”
*ding ding ding* tell him what he has won!
It’s remarkable to me, knowing several union guys, that they truly can “think” (using the loosest possible sense for the meaning) that they are always right and the employers always are wrong. But with one exception, a Christian friend who works at a bankrupt auto supplier (and who’s job is only in place due to a Toyota contract replacing big 2.23434 work), most union guys simply believe that they are owed a living and then some. Like – better medical bennies than anyone else and no deductible. Like – sitting on their dead asses and collecting a paycheck in a “works bank” while their employer loses $2500 per car built. Duh! How long will such an employer manage to stay in biz? But they cannot, and will not, see this.
Now the flip-side. Management. Locally, a hospital bought another hospital 35 miles away, fired everyone (unionized nurses) and then said they’d hire people back with less wages and – by the way, no union cards needed. Completely illegal. Nobody lifted a finger.
So, while unions may be needed to fend off immoral and greedy employers, of any sort, it increasingly seems that the unions don’t seem to be able to do the job they were intended to do. In fact, largely, the job of policing such illegal and immoral activities has passed to the government – while likewise is not doing the job.
So, what to do?
How about personal responsibility? As in, workers and management and government.
Wow, what a novel idea.
I’ll work for an employer and agree to do so, they’ll agree to pay me a certain amount. If either of us wishes to terminate the situation, then either I’ll go find something else, or establish my own business. (So that the government can steal from me). See, we need to fix that too…..
As for cars, well, I’m sick of buying “crap” and dealing with dealers who do not understand that warrantees actually are supposed to be worth more than toilet-paper (i.e. the big 2.343432). So about 5 years ago, I started to boycott the Detroit companies and from here on out, I plan to try to buy quality – Honda and Toyota.
Where the cars are made matters little to me.
Ironically, in the future, the “Detroit” companies will be importing more outsourced cars than the “transplant” companies, if trends continue as they now are. Assuming, of course, that any of the “Detroit” companies even survive.
I agree that the UAW is past its sell-by date but I’m tired of seeing unions blamed for automakers problems. How is it that GM and Ford can’t deal with “crippling labor costs” but Toyota can apparently pay more and make a profit. The bottom line is GM and Ford are in trouble because they retreated from large chunks of the car market. What are Ford’s small car and minivan offerings? Whose fault is that? When Ford had a topselling sedan in the Taurus how many years did they wait until they updated it?.
Unfortunately for the autoworkers they now have to compete in a global car market against people who are cheaper to employ and probably better trained too.
How is it that GM and Ford can’t deal with “crippling labor costs” but Toyota can apparently pay more and make a profit.
Because Toyota did it in the right order: make a profit then pay more.
It seems that there are too many people in management and labor who are too busy dividing up the pie, and not busy enough making it bigger. The consumers have been telling them they both stink for a long time.
Personally, I just don’t get how you can run a business with so much fighting all the time. It only gets worse when everyone realizes the pie is getting smaller.
Tough love is the cure they need. At every chance we should tell them we don’t care and don’t want to hear about it.
We will buy the cars if they are the best value. SHUT UP AND BUILD THE BEST CARS!
PS Don’t go claiming they are the best until it’s obvious to everyone or it will be the last chance you ever get.
jerseydevil:
March 27th, 2007 at 11:12 am
blaming the workers is an old story… the problem with the domestic auto industry is not so much the unoins or the workers…. its the fact that not enough of the cars are being sold… deciding what cars to sell where, what the look like, and how much they sell for, is a mangement decision… also where to put r and d dollars and what kind or profit (or not) to show the public or pay the shareholders…
Management and the UAW are to blame. Management for making poor decisions and the UAW coming up with things like the job bank and strict rules on what a worker can do. Corporate America gets along just fine with 401k plans and at will employment. The company does well you make more money it doesn’t and you don’t as it should be. I wasn’t hired to move furniture around but if we need to do that everyone pitches in.
For a successful business there can be no “Us” and “Them” there is only “We”; all working for a common goal. You want to make money like the big wigs? Go to college get some loans/grants and do it. If you have the drive you can succeed, you are only limited by your own ambition and imagination. I have no compassion for those that do not wish to better themselves nor who take responsibilities for their actions. You want a retirement you invest your money. I’m banking on their not being a Social security check when I retire. I’ll make sure I’m covered myself because it’s the right and smart thing to do.
Let’s get the “Toyota pays better in Kentucky” thing straight. The Detroit media reported that the average blue collar worker at Georgetown was paid more that the average Detroit blue collar worker. The Toyo employees were pushed over the top in take home pay due to a rather large (average) profit sharing bonus. Fair enough.
But take home pay is not total compensation. Number one biggie difference is health care benefits. Several thousand dollars/employee/year difference. Also – paid days off. When I left I had 4 weeks of vacation and 17 paid holidays, plus 5 sick/personal days. Yes – you read that right. So when you and the people in Georgetown are working on the Monday after Easter, keep in mind that the Big 2.5 employees are getting paid to sit in the casinos blowing their money. How many cars/trucks will Toyota produce while Detroit is on thier European level of holidays?
Restrictive work rules as described above add cost. 10-12% daily, out of control, protected by the contract absentee rate. (Don’t ever buy a car built on Monday/Friday is still a valid rule.) And on and on.
Wages do not equal labor cost. That’s the true advantage of the transplants.
The UAW could learn from their British auto union counterparts, now that there is no longer a British-owned automobile industry other than a couple of cottage-industry players, famous though they are (such as Morgan).
Of course, the South Korean union at Hyundai are acting much like the British union did 30 years ago – hence, yet another reason for Hyundai to build more factories in the US and employ AMERICANS at good paying jobs – people who will actually work instead of strike continually.
So looking at the Hyundai situation, and the “trap” that the UAW have placed the Detroit car manufacturers, it can be seen that one way Detroit could get out of the situation is to do the same as Hyundai – move the jobs to where the work will be done well, and at a fair wage – and the opposite of Hyundai – move jobs OUT of the US and into South Korea (or China or Belgium or Mexico or maybe even Brazil) – in order to accomplish it. Ironic, no?
But the fact that this “is” condemns the UAW like nothing else.
My “gut feeling” for 2007? We are going to have one HELL of a recession start; gas prices are going to skyrocket (due to an Iran war); the UAW won’t budge an inch; the Detroit car manufacturers will either declare chapter 7 and close, or chapter 11 and try to dump the UAW (but it won’t work and they’ll end up Ch. 7).
Dismal outlook on what is starting out to be a nice year, I know, but that’s what I see in my crystal ball as a distinct possibility/probability. Not that I want ANY of it to happen, so please don’t shoot the messenger. I DO live in Michigan, in fact…
Frank:
GM and Ford made massive profits through the 90s off SUVs, thats when they agreed to the contracts they are now trying to renegotiate, unfortunately they didn’t anticipate the end of the SUV fad or new entrants to that market.
Sid Vicious:
“I have no clue as to how labor relations in Germany or Japan allow them to be successful, even with strong unions.”
Some ideas about this…
The Automakers in Japan and Germany don’t have the legacy costs that GM and Ford face. In Europe (and Canada) socialized medical care and pensions mean that the entire cost of maintaining an army of retirees doesn’t fall on the corporation that employed them, this has got to be one of the biggest reasons Ford and GM continue to invest in Canada rather than MI.
In Germany automakers have managed to stay profitable by moving up the value chain and investing in training and plants – in any case nobody is building an economy car profitably in Germany and jobs are gradually shifting to Eastern Europe.
Japanese automakers use a lot more robots than anyone else, my guess is they employ fewer and more highly trained workers than elsewhere.
I would also guess that Japanese and German automakers invest way more than GM or Ford in worker training etc, to try and make sure their expensive workers have productivity to match.
All these complaints about unions and “european” holidays. A number of the car companies that are in europe are currently kicking our asses with unions AND 8 weeks of vacation. Why? Because they make cars that people buy. Hell, VW has a 33 hour week. My friend in Greece has 10 weeks off a year and he’s a junior computer system engineer! We here work like demons, make little money, have little vacation, and can get fired if out employer dislikes the color of our shirts!!! I am flumoxed by all this. My Italian cousin i swear hardly ever works, makes a decent living and travels six weeks a year! HE is 33. Here a 33 yr old is happy to get a week.
Your right, no more unions. Great. Work 12 hours a day six days a week, get fired cause u can be. What is the matter with us? Do we value ourselves so little?
Sorry about this, its a pet peeve of mine.
As Sid has explained, Toyota gets much more productivity out of a labor dollar. And retirees (”legacy costs”) aren’t much of a burden for ToMoCo. GM/F/DC have huge retiree health costs, too, further contributing to the Ponzi-scheme effect. It’s a downward spiral: more retirees hike costs while market share (revenue) shrinks faster than fixed overhead can be trimmed. The market is moving away from the 2.5’s gas hogs, but their non-luxury cars must be built outside the US to make any profit. The brontosaurs are doomed.
So socialized medical care is the key to improving the capitalist system in the US… hmmmmm….. Sounds like someone is all mixed up in their political philosphy.
The Unions are a huge part of the problem but can’t see the forest through the trees…
Here are some of United Auto Workers President Ron Gettelfinger’s comments of late:
Accused hedge and equity funds of “stripping and flipping” companies they buy.
“Our union is on guard to protect the best interests of our membership”
“It would be a grave mistake to equate our actions to capitulation”
It doesn’t sound like the UAW wants to play nice in teh sandbox at all…ever!
Toyota and Honda can manufacturer world class product on American soil with American labor…what is wrong with this picture?!
UAW needs to wake up!
JerseyDevil,
VW is in deep kim chee and trying to both pare the headcount and get more work hours out of their union. Trying to do so got VW’s boss fired, as the union has too much pull with the “true” boss, Ferdinand Piech.
Gosh what a bunch of Buffoons…Like Bolsheviks…And that website reads like 1980s Pravda…Are Gettelfinger/Graham descendants of Lenin? They should consider growing up now.
“As Sean McAlinden from the Center for Automotive Research said, “What’s at risk here are the core values of the union.””
Now THATS hilarious!!!
50merc:
if people were buying these cars, there would be no problem. No one is buying the cars. Its not because of legacy costs. Its because no one is buying the cars.
jerseydevil:
I sympathize with your predicament. I too like “fuel-efficient hatchback cars,” so the domestics have been ignoring me, too. But here’s why: the 2.5 are the highest-cost producers. A big reason for that is legacy costs. They can’t make in the US cars in the Civic-to-Camry price range and sell them at a profit. If the Fusion wasn’t made in Mexico, Ford probably would lose money on it. (They might anyway!)
When the UAW was born, the idea was “demand more.” If the leadership can only say “we have to accept what the company can afford,” what’s the point in paying union dues? Nor is socialized medicine a panacea: if GM/F/DC stops paying a thousand a month for your health benefits, guess who will?
Old information, yet still relevant…
From:(http://www.findarticles.com/p/articles/mi_m1316/is_v18/ai_4330758/pg_1)
– Washington Monthly, July-August 1986)
“Americans can build good cars; they’re doing it in Marysville, Ohio”
“No collar capitalism: [The plant] office, which is one huge, unpartitioned room full of desks, file cabinets, and computer terminals. The president’s desk…simply sits in one corner, next to a number of others. Everyone was in the same white uniform with his or her first name embroidered on it. No suits and no ties. There are no personal secretaries for the managers. If they are at their desks, they answer their own phones; if not, whoever is nearby takes a message.”
[E]veryone parking where he pleases in the lot…everyone eating in the same cafeteria, everyone going by his first name.
Unions, Japan:
“The Honda plants in Japan are all unionized, though the union is only for the company, not industry-wide. [A] senior vice president, says the difference between Japanese and American unions is one of “sentiment.’ “Japanese unions,’ he says, “think first of what is good for the company, then of what is good for the union.’”
Honda’s is not perfect…
Unions, U.S.:
“There seems to be an unspoken fear among those in [Honda] management that if the employees [in Honda’s U.S. plants] choose the U.A.W., with its history of often bitter management-labor relations, that same kind of adversarial relationship will follow and kill their productivity.”
“While most workers agree the U.A.W. drive is dead for now, they say the need for some representation remains. “I’m the first to admit there’s been a lot of union abuse in the past,’ says Ted. “But I get a little wary of nothing but praise and good press about Honda.”
“Yet even the strongest unionizers appreciate Honda’s approach. “It’s good that you can talk to the vice president and call him by his first name,’ says Randy Neighbarger, who calls himself the top union organizer in the plant. “And the productivity concepts are good if they’re actually carried out. The teamwork philosophy is good. – It’s not a bad place to work. I’m planning on staying. I just plan on changing them a little bit.’”
Again, from 1986, but little of this has changed.
Jerseydevil – there’s the rub – the UAW has forced the big 2.5 to maintain crazy benefits and pensions for retirees that they cannot afford to keep paying out with the current sales issues at hand. Obviously this raises their monthly costs, and in the face of shrinking market share, they start bleeding profusely.
The non-UAW companies don’t have this problem right now. If they start losing market share, they can shut down plants and lay people off to reduce their monthly costs, thereby still making a profit or breaking even – they are not on the hook to pay out pensions or health care just like the rest of the modern business world.
Plain and simple fact of the matter is the UAW, through contract negotiations over the years, have forced Detroit into the financial bind they are in and if they don’t wake up and realize this soon both the big 2.5 and the UAW are not going to exist anymore.
You have a point about product, but the respective companies are not able to cut costs as rapidly as they should be able to due to the UAW.
Fear not the Iranian stranglehold on fuel prices.
The scenario that they will shut down the straight is not likely. They depend on oil revenues to survive. If they shut down the straight, the US can shut down almost all their imports and exports. The people would rebel in short order, and the leaders would be hung.
Ain’t gonna happen. They may flex their muscles, and even sink a boat or two, but they will not actually close down strait.
Jerseydevil hit it right on the nose once again: “I cannot buy domestic products because there is nothing for me to buy. I like very small, high end, zippy, fuel efficient hatchback cars, not large SUV’s, trucks, sedans or coupes. The domestics have ignored me for a long time now.”
Detroit’s problem, more than anything else, is lack of desirable product. I’m in exactly the same spot as jerseydevil (except that I’ll take a nice coupe).
Here’s the truth: If there really is a $1500 price penalty on domestic vehicles versus comparable foreign car and trucks because of legacy costs I’m prepared to pay it – if I really want the car. I own a Ford Ranger now and it’s great. But I have no idea what I’ll buy next.
But I realize that $1500 question prompts a different answer from many other vehicle buyers. And that’s why nationalized health care, despite the bleatings about socialism from some on these boards, would indeed go a long way toward boosting U.S. competitiveness. It would also go a long way toward preserving a civilized society in the U.S. This is an argument that can take up a complete string by itself. Maybe TTAC should do an editorial on the subject.
I’m willing to bet cash money, simply because we’ve been able to witness the efficiency of Medicare over the past 40 years, that nationalized health care would be cheaper and a better value than what’s being peddled by the HMOs.
Despite my rantings in this post, I am not necessary a union apologist. And if it comes down to a showdown between the UAW and the Big 2.5, it’s going to be hard for the union to garner any public support when most of the U.S. population doesn’t enjoy anything resembling the perks enjoyed by autoworkers.
And one final related note: Someone brought up the German automakers. I’m here to tell you that Germany’s unionized autoworkers have no idea the shock that awaits them as the effects of globalism finally begin to be felt in their country. A 28-hour work week? They’ve got to be kidding. Unionized U.S. workers are slave labor in Haiti and China by comparison. The jobs are already beginning to move out of Germany to Eastern Europe and elsewhere. They haven’t seen anything yet.
There’s no inherent union mentality. I’m in construction, and some of our proudest union members do their best to outdo their coworkers every day. But maybe that’s the thing, that they’re proud. I met many “socialists” when I lived in Spain (socialist by the original definitions of the word) and their mentality was that hard workers should be proud enough of what they do to demand just rewards… a mentality that the UAW seems to have long lost.
But a lot of this is a PR war, and the manufacturers have really hurt themselves by rewarding upper management failure so copiously. THAT has made resisting concessions a matter of honor for the UAW. There’s no feeling among the union members that the managers are doing their part to save their companies… and I can see their point.
Whatever your “political philosophy” (and really who gives a damn) the point is that rising healthcare costs have become a competitive disadvantage to the US economy. There’s no ideal solution and noone in DC with the balls to do anything about it so you can look forward to living beside (or more likely driving past) more people who can’t afford basic healthcare like vaccinations for their kids. And yeah Germany, Japan and every other country faces the same pressures of globalisation. That doesn’t mean that there is nothing to be gained from taking a look overseas every now and then to see what we might learn from how they do things.
1. While healthcare is a bear: Average annual growth in health care spending is expected to hold steady at 6.9 percent from 2006 through 2016. Even so, health spending is expected to double from $2.1 trillion in ‘06 to more than $4 trillion in 2016, consuming 20 cents of every dollar spent. Since 2000, workers’ health insurance premiums have risen 84 percent, while wages have increased 20 percent, and inflation has risen 18 percent.
2. It is still a fundamentally a management issue: Who runs the companies that can’t seem to design, sell (or support), high-quality cars that the mass-market finds desirable?
If you ask you supervisor for a 3-hour daily lunchtime, and he or she agrees, who’s at fault for the productivity loss? Are your global competitors doing the same thing(s)?
In terms of the 1973 (and subsequent) gas-price/supply shocks in the U.S., exactly who is responsible for maintaining a corporate memory? To learn from the past, and formulate long-term planning accordingly, those leading the corporation must be held accountable.
Some interesting views for sure.As a 35yr year UAW/CAW member I don’t think my thoughts will go over so well today.What it comes down to is that none of us can predict the future.
I think a lot folks are gonna be suprised maybe shocked at the outcome of all this.
More from Gettelfinger, including the “s-word”:
http://www.msnbc.msn.com/id/17815093/
The UAW’s true position, or true positioning?