It’s not difficult to understand why the UAW has never contemplated agreeing to a wage rate tied to the profitability of its employer firms: simply put, it’s been a long time since big profits were the norm among the union-represented Detroit automakers. But now that Motown is back in the black and handing out record profit-sharing checks, it looks like the UAW could finally tie its own fate to that of the automakers… on certain conditions. UAW boss Bob King tells The WSJ [sub]
It would be an advantage if you can guarantee to the [Detroit] companies certain things on fixed costs so that they would remain competitive. When you’re successful, that’s good. But if you’re sharing more of the risk, you need to have more of the upside
Automotive News [sub] reports that the one-time advisor to Rick Wagoner and GM’s director in charge of the UAW’s VEBA account’s 17.5 percent stake in the automaker has been promoted to Vice Chairman in charge of corporate strategy and business development. He will be replacing John Smith, a 59 year-old GM “lifer” (he joined the company in 1968) who led negotiations for GM’s Saab-Spyker and Opel-Magna deals. Smith will stay on until the end of this year as an advisor to CFO Chris Liddell. That Smith would leave GM after the failed Opel sale and the less-than-entirely-satisfying Saab-Spyker deal isn’t surprising, and as a well-compensated advisor to CEO Ed Whitacre and a rising star at GM, Girsky is an equally unsurprising replacement (despite his failure to rescue Saturn). And though Girsky brings experience gained as a labor advisor and a Morgan Stanley analyst, he’s got his work cut out for him. GM’s brand sales have been largely unsuccessful so far, Opel is in an unfunded turnaround limbo, and a recent India-market alliance with SAIC was less than perfect for GM’s long-term prospects. Girsky’s got a lot going for him compared to the typical GM insider, but with mounting long-term, structural issues facing The General, there aren’t any easy options facing him in his new capacity.
A lot of what you hear about Steve Girsky sounds decidedly positive: an outspoken critic of GM, Girsky lasted less than a year as Rick Wagoner’s “roving aide-de-camp,” reportedly due to frustration with management heel-dragging. He even earned TTAC’s “lesser-of-two-evils” endorsement to be Presidential Car Czar over Steve “Chooch” Rattner. When he was appointed to be the UAW rep on GM’s board, representing the union’s VEBA trust which owns 17.5 percent of GM’s stock, he was lauded as someone who could keep his union allegiances at bay. But as special advisor to GM CEO/Chairman Ed Whitacre, Girsky had better be prioritizing GM’s best interests. Reuters reports that he’s being paid a cool $900k in stock grants for his advice. That’s in addition to $200k director’s salary and reimbursement for “living expenses and travel to and from Detroit.” Not bad considering the fuss people are making over compensation at TARP-recipient financial institutions.
An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered an issue. Which is where Stephen Girsky comes in. “They clearly need an adviser who knows the industry,” former Chrysler president Thomas Stallkamp tells Bloomberg. “Girsky certainly knows the industry, and he was close to both GM and the union.” And though I have questioned whether Girsky’s UAW affiliations are best described in the past or present tense, this 2004 presentation (PDF) to Original Equipment Suppliers Association is decidedly prescient. Especially for 2004. And this December 2008 presentation to UAW Local 14 seems to indicate that his recent advising stint with the UAW was a mission of truth and reconciliation rather than one of conniving and obfuscation.