The Truth About Cars » King The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Jul 2014 11:00:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » King Opel Abandons Bochum Completely Mon, 29 Apr 2013 10:44:01 +0000

Bob King’s attempts to ingratiate himself with German unions, and to make Opel’s Bochum workers reconsider their decision to turn down Opel’s restructuring plan, are being ignored. Actually, it appears as if they had the opposite effect. Days after King’s comment, Bochum plant manager Manfred Gellrich rejected new discussions, saying Opel does not want to “waste precious time,” Reuters says. Over the weekend, Opel dropped another bomb: Bochum will be closed completely. A parts depot that was supposed to stay open, will also close its doors.

With the shuttered logistics center, another 420 jobs will be lost, raising the number of redundancies to 3,700, says Der Spiegel. “It does not make sense to leave the distribution center in Bochum,” once manufacture of cars stops, an Opel spokesman told the magazine. Bochum’s works council had not put much faith in the plan in the first place – one of its reasons for rejecting the plan. Opel has another parts center in Rüsselsheim.

The Bochum plant is scheduled to close by the end of next year. Opel will move the production of its Zafira MPVs elsewhere, two years before a planned model changeover.

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Bob King Intervenes In Bochum, Receives Cold Shoulder Wed, 24 Apr 2013 13:54:46 +0000

UAW boss Bob King told Opel’s Bochum workers to vote again, and to this time accept a deal that had been worked out between the German metal worker union IG Metall and GM.

According to Reuters, “UAW President Bob King, who is a member of Opel’s supervisory board, said on Tuesday that workers at GM’s Opel plant in Bochum, Germany should ask to vote again on the restructuring deal they rejected last month that would have kept the plant open through the end of 2016 and retained 1,200 of the more than 3,000 employees.”

The plan had been overwhelmingly rejected by Bochum’s workers. The plant is now scheduled to close by the end of 2014.

King, who oddly sits on Opel’s Supervisory Board as a representative of the union despite being the chief of one of GM’s biggest shareholders, said he “would really hate to see that plant closed when so much effort was put in by IG Metall and the works council to save it.”

The plan is likely to fall on deaf ears. “We gave the employee a clear choice,” spokesman Harald Hamprecht told Reuters. “We respect the outcome. The Opel supervisory board acted accordingly and we are moving on.”

Bochum’s workers have not been heard of, but it is unlikely that they are sympathetic to the plan. They had accused their unions of throwing them under the bus, and they probably won’t listen to a major shareholder of GM.

King is trying to curry favors with IG Metall, and to enlist its help for the UAW’s efforts to organize the U.S. plants of German transplants.


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UAW Lives Off Its Savings Mon, 02 Apr 2012 14:42:07 +0000

With membership down to a quarter of the union’s peak size in 1979, dues are not enough to pay the bills at the UAW. The UAW continues to tap into savings to pay for its day-to-day operations, Reuters says.  

According to the UAW’s annual financial filing with the U.S. Labor Department, 16 percent of the UAW’s cash receipts came from investment and asset sales in 2011, while union dues represented 47 percent.

The UAW’s membership increased slightly by 4,107, or 1 percent, to 380,719 last year. The UAW is still America’s richest union, but most of its $1 billion plus wealth is tied up in its strike fund. “As a result, the UAW was forced to sell stocks, bonds and other assets to pay for its day-to-day operations during the most recent U.S. economic downturn as the number of dues-paying members fell,” Reuters says.

Even after adding new members, the UAW is forced to rely on investment sales to pay for day to day operations. Organizing the transplants is key to the UAW’s survival. Failure to do so will result in more money drainage. Already, the balance sheet looks lopsided:

The UAW reported assets of $1.04 billion in 2011 and liabilities of $7.1 billion. Cash receipts and disbursements both fell about 6 percent to roughly $258 million each.


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Modern Marvels: IG Metall Hires Bob King As Opel Board Member Fri, 30 Mar 2012 12:54:45 +0000 When, in early February, the first (unconfirmed) rumors made the rounds that UAW’s Bob King would get a seat on Opel’s supervisory board, the assumption was that King will speak for “the equity side.” According to the “co-determination law,” the supervisory board of a large German company consists of 50 percent equity side and 50 percent labor, with the chairman having two votes in case of a tie. The UAW, through VEBA, owns 10 percent of the stock of GM. That puts King definitely on the equity side. One would assume.

When AFP reported yesterday that “King was appointed by IG Metall, the German’s metalworkers union, to serve as a labor representative on Opel’s supervisory board,” it sounded like a mistake, something lost in translation between the UAW spokeswoman Michele Martin and the French wire service.

A few phone calls later, it indeed looks like King was nominated by the German metal worker union IG Metall. According to reports, King will take the seat vacated by the union representative of Opel’s Zaragoza plant. Why the German metal workers nominate a major shareholder of GM is anybody’s guess.

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Tradewar Watch 21: Stabenow, Brown And King Suggest Suicide, Seriously Wed, 01 Feb 2012 18:04:09 +0000


American carmakers cast worried glances on Senators and union groups that want to create a level playing field with China. Senators Debbie Stabenow and Sherrod Brown, alongside union representatives and the labor-backed Economic Policy Institute try to push “the administration to bring a possible case at the World Trade Organization or begin a U.S. Commerce Department investigation that could lead to duties on Chinese-made auto parts,” as Reuters reports.

A study by the EPI alleges that the Chinese auto parts industry has received $27.5 billion in government subsidies since 2001. The study forgets that large parts of the U.S. auto industry would not be here anymore, would it not have been bailed-out by the U.S. government.

Why are carmakers horrified by the surely well-meant suggestion? Several reasons:

  • Global parts sourcing, especially in China, has helped carmakers the world over to lower production costs. Slapping a punitive tariff on Chinese parts would raise the price of the parts, and make the car uncompetitive. First customers, then UAW members would pay the price for the folly.
  • But wouldn’t it bring jobs back to America? The experience with the tire tariff, enacted on instigation of the United Steelworkers, says otherwise: The production of cheap tires simply moved from China to Thailand. From there, the tires could be imported at a lower tariff than from China, for a while even duty-free. Not a single job was created in America with the tire tariff, but a lot of porcelain was broken.
  • As the volcano in Iceland, the tsunami in Japan, and the flood in Thailand have shown, the supply lines of the auto industry are intricate and can be easily damaged. Meddling with parts imports from China could have catastrophic effects on the U.S. car industry. By the time large swaths of the Chinese parts industry have been relocated to even cheaper parts of the world, U.S. manufacturers would be out of business, its people would be out of work.
  • Especially GM is inseparably tied to China. More than a quarter of GM’s global production is sold in China, GM’s largest single market. Ford is expanding its presence in China. Chrysler hopes to get back into China on the coattails of Fiat. These companies would be on the receiving end of retaliatory measures by the Chinese government.

It is not that the lawmakers and union officials are utterly naive. They know that most of the Chinese parts production was created if not by, then at the behest of foreign carmakers, U.S. and otherwise. Bob King, president of the United Auto Workers union, acknowledges this by urging “global corporations to refrain from a ‘race to the bottom’ to find workers that they can pay the least.”

Debbie Stabenow creates communal cringes on Detroit`s executive floors when she says:

“We need to stand up to the bully on the block. The bully on the block continues to take our lunch money and we need to stop that.”

Her solution seems to be to create empty pockets: Nobody can steal your lunch money, if you don’t have any.

Meanwhile, carmakers take cover and hope that the matter is over when the circus moves out of town in November.

GM’s Washington, DC, spokesman Greg Martin asks me to understand that he won’t say anything else than a prepared statement. It arrives a few minutes later by email.

GM’s success in China, which is now the company’s largest market, illustrates the benefits of trade and good economic relations to both countries. Because China represents tremendous growth potential for American companies, we hope that both countries continue to work through their differences constructively.

Well said. Let’s hope the prayers will find an open ear.

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Do Or Die: UAW’s Hail Mary Pass Through The South Thu, 29 Dec 2011 19:46:53 +0000

A good month after our trek to the South where we checked on the (un-) willingness of transplant workers to join the UAW, the hard-hitting team at the Reuters Detroit bureau did the same.  In a special report, Reuters comes to the same conclusion as we did: It won’t be easy. Bernie Woodall and  Ben Klayman of Reuters did more thorough digging. And they unearthed the secret strategy of the UAW: With the help of the German metalworkers union, they want to talk themselves into Volkswagen and Daimler:

“By appealing to German unions for help and by calling on the companies to do the right thing, King hopes to get VW and Daimler to surrender without a fight and let the union make its case directly to workers.”

If that strategy won’t work, and it is highly unlikely that it will, it could be the end of the UAW:

“It’s a battle the UAW cannot afford to lose. By failing to organize factories run by foreign automakers, the union has been a spectator to the only growth in the U.S. auto industry in the last 30 years. That failure to win new members has compounded a crunch on the UAW’s finances, forcing it to sell assets and dip into its strike fund to pay for its activities.”

The UAW will have a hard time convincing workers. Where the UAW reigns, it’s a killing field for jobs:

“Since 2001, the Detroit Three have slashed over 200,000 jobs, eliminating more than 60 percent of their hourly work force. In the same period, Japanese, South Korean and German automakers have opened eight assembly plants in the United States, creating almost 20,000 factory jobs.”

Money-wise, it does not make a lot of sense to join:

“Newly hired workers earn $14.50 an hour at VW in Chattanooga. That is just below the $14.78 that a new hire would make at a unionized GM plant in Spring Hill, Tennessee. Adjusted for monthly dues at Spring Hill, the VW worker is behind by only about $15 per month.”

Hopes that the German unions will do the heavy lifting for the UAW likely are misplaced. “We will support the UAW, but we will not do the UAW’s work,” said Peter Donath, an IG Metall official. The German unions are interested in themselves. Of course, German makers with troubles in the U.S. could be discouraged to move more work to a unionized plant in the U.S. Wait, what’s wrong with that picture?

Please read the detailed report at Reuters. It will be an eye-opener.

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UAW Surrenders. Transplants Remain Unorganized Wed, 07 Dec 2011 19:54:10 +0000

The UAW called off the transplant war. It won’t even identify an organizing target among foreign automakers with U.S. operations, UAW President Bob King told Reuters (via Automotive News [sub] ):

“We are not going to announce a target at all. We are not going to create a fight.”

At the beginning of this year, the United Auto Workers pledged that it would launch a campaign to organize the foreign-owned, non-union “transplant” factories in the US. Organizing at least one transplant was branded as a matter of life-and-death for the union.

A week ago, the UAW back pedaled and said it would simply pick an automaker to target by the end of 2011.

Even that isn’t happening.

Instead, King said meekly that the UAW is in talks with all of the German, Japanese and Korean automakers with U.S. factories and expects to continue to make progress toward organizing workers in their operations.

Some day. Maybe.


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UAW: It’s Good To Be The King – Maybe Not For Toyota Fri, 18 Jun 2010 08:22:36 +0000

Ron Gettelfinger retired and Bob King took his place as President of the UAW. Mr King has some pretty big shoes to fill, but the name is a good start. After all, Mr Gettelfinger helped persuade President Obama to bail our GM and Chrysler (can’t say I blame him, quid pro quo, and all that). So what can Mr King do to really show the rank and file that he means business? Better working conditions? Input into designing cars? More job security? Nope. His next step is to make sure that Detroit and the transplants are evenly matched, so to speak.

Business Week reports that Bob King has made organizing the U.S factory workers of Toyota his “Number 1 priority”.

“If we don’t support Toyota, Honda, Nissan, Hyundai, Kia and all the non-union plants by supporting the right to organize, we cannot win back the concessions we have given up,” King said in his first address today to delegates at the UAW’s constitutional convention in Detroit. “The only way we can get back what we’ve sacrificed is by coming up with a comprehensive strategy to rebuild the power of the UAW.”

While he was at it, Mr King took a verbal swing at Toyota’s current scion, Akio Toyoda, by talking lambasting Toyoda’s decision to push forward with a non-union plant in Mississippi whilst at the same time shutting down NUMMI. “The only reason they closed that plant is because it was a UAW plant,” King said. “Mr. Toyoda, if you care about safety and quality in America, you’ll go back to Fremont and build Corollas there and not in Mississippi.” UAW’s King missed the part about GM dumping NUMMI on Toyota via the bankruptcy Mr King’s predecessor helped usher in. He may have missed that Mississippi is as of now a part of America. But let’s not sweat the details.

More virtual violence followed: “We’re going to pound on Toyota until they recognize the First-Amendment rights of workers to come into the UAW,” King told over 1,000 union delegates.

If the UAW, almost certainly with President Obama’s good wishes, press forward with their plans to “liberate” the good people of the oppressive regimes of Toyota, and by inclusion, Nissan, Honda et al, then something has to give. As mentioned before, Le Chatelier’s principle tells us that if an equilibrium is shifted, then the whole equilibrium will shift with it to maintain stability. The transplants like things the way they are, if the UAW want to change this equilibrium, then the transplants may have to shift to achieve stability. And I’m guessing the acronym “NAFTA” might help them do that.

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