The Truth About Cars » union The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 14 Jul 2014 16:00:14 +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 » union UAW To Form Union Local For Volkswagen Chattanooga Workers Thu, 10 Jul 2014 15:23:19 +0000 Click here to view the embedded video.

The UAW will apparently form a new local in Chattanooga, Tennessee to represent workers at Volkswagen’s assembly plant. But things will operate a little differently than in traditional union representation setups.

According to The Tennessean

Participation will be voluntary, and there will be no formal recognition of the union by the German automaker until a majority of its workers have joined, UAW officials have confirmed.

“We will be announcing a local, and we would fully expect that Volkswagen would deal with this local union if it represents a substantial portion of its employees,” UAW Secretary-Treasurer Gary Casteel of Ashland City said this morning.

“It’s dependent on the employees and what they want to do.”

The arrangement is a bold step towards gaining representation – as well as a UAW foothold in the South – even after the UAW lost a vote held by plant workers to decide on representation. But it makes one wonder why the vote was even held in the first place. To further make matters complicated, a local news outlet is reporting that the end goal of the arrangement would be the creation of a German-style works council.

An official announcement is likely to come this afternoon, but the timing of the move is close to VW’s decision on whether to build their new three-row crossover – a vital product for the American market – in Tennessee or in Mexico.

VW’s supervisory board, where labor organizations have a say in matters, does not want Chattanooga to get the new crossover without some kind of arrangement regarding organization of the plant’s labor – and IG Metall, Germany’s largest labor union, has deep ties to the UAW. VW conveniently left some wiggle room in the matter, and we may be seeing that manifesting in the “voluntary” union, which has the possibility of being recognized by VW, even though that doesn’t appear to be confirmed.

On the other hand, the Tennessee state government is offering significant incentives to Volkswagen, but is vehemently opposed to the presence of the UAW.

For some time, it seemed as if the UAW’s defeat, as well as the crossover’s production in Chattanooga, was a slam dunk. But now, things have gotten a little more complicated. We’ll have more as the story breaks.

H/T to Jalopnik 

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TTAC Matinee: Final Offer Fri, 06 Jun 2014 11:00:18 +0000

Friend of TTAC Michael Banovsky sent along this link to Final Offer, a documentary about the 1984 negotiations between the Canadian arm of the UAW and General Motors.

Told from the perspective of both union brass and rank-and-file members, the doc explores both the labor-management relationship, as well as the strife between the UAW’s Canadian and American arms, which led to the eventual creation of the separate Canadian Autoworkers Union – which is now Unifor, an amalgamated private sector union which came about through a merger between the CAW and other unions. Looking back, it’s easy to see that Final Offer was made at a pivotal moment in the history of the auto industry in North America, and gives us a look at a world that most of us (save for commenter Mikey) will never see: that of an hourly assembly line worker.

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QOTD: Skin In The Game Thu, 22 May 2014 14:07:07 +0000 chrysler-jnap-5-millionth-suv

With negotiations between the UAW and the Big Three set to open next year, FCA head Sergio Marchionne has already fired the first shots, calling for an end to the two-tier wage system and a new pay structure, tied to profit-sharing.

Speaking to Reuters, Marchionne discussed his plan to eliminate the two-tier structure, replacing it with a yet-untested system

“The way you do this is you grandfather the Tier 1s,” Marchionne said of the veteran workers. “You make them a dying class and you build a Tier 2 structure that sets the wage mechanism for the next generation.

“When you have a bumper year, you pay them as much as a Tier 1 would make if not more,” he added of the lower-tier wage scale. “But if I’m in the toilet because the markets are down or GM is successful, or Ford, and then we go down in earnings, then I think at the end of the day you share the pain with the company.”

While the UAW did not comment on Marchionne’s proposal, the UAW has historically been against two-tier wages as well. In my view, Marchionne’s proposal is interesting, in that it lets the hourly workers have some “skin in the game” when it comes to their own financial success, as well as a feeling of pride and accomplishment when FCA succeeds. Given that FCA’s American units like Jeep and Ram are practically carrying the company, the intangible elements would be a strong motivator – of course, it also leaves workers exposed to managerial incompetence, the prospect of other business units dragging down overall performance or both. Let us know what you think in the comments.

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Canadian Toyota Plants To Hold Union Vote As Early As Next Week Mon, 31 Mar 2014 17:22:21 +0000 ToyotaProduction

Unifor, Canada’s largest private sector union (formerly known as the CAW), has filed to unionize Toyota plants in Canada. The Financial Post reports that more than 40 percent of Toyota’s 6,500 workers have signed union cards.

According the paper, Unifor president Jerry Dias characterized the move to unionize as an “internal effort”, with employees apparently creating their own union cards and sending them to Unifor.

The FP notes that

“Employees at the Toyota plants have raised concerns about several recent unilateral changes at the plants, including moving new hires to a defined-contribution pension plan and the hours they work. They also have concerns about the company ability to impose other changes, and other health and safety concerns. In order for the certification vote to pass, 50% plus one of the Toyota workers have to vote in favor of unionization.”

According to Dias, the effort to organize has more to do with workers having a say in the management of the plant, rather than compensation or benefits. Dias noted that Unifor would attempt to negotiate a new collective agreement if the effort was successful.

While it would be tough to speculate on the outcome of the vote, Dias has previously stated that he would delay a union vote until he was comfortable that a victory would occur. Previous efforts by the CAW to organize Honda’s plant in Alliston, Ontario, were unsuccessful, with workers repeatedly failing to organize. One Honda insider suggested that a successful campaign could even lead to a shutdown of a given plant, despite the recent investments made by Toyota and the Canadian government.

According to our source, the Japanese take a dim view of any outside forces trying to meddle in the management of their plant – unions included. Unions do exist in Japanese auto plants, but don’t aim to do this, or any other initiative that would be seen as hostile in the context of Japanese labor relations.

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Volkswagen Workers To Vote On UAW Representation Starting February 12th Mon, 03 Feb 2014 18:28:08 +0000 Volkswagen-Chattanooga-Plant-500x333

An article on the UAW’s website claims that workers at Volkswagen’s Chattanooga, Tennessee plant will vote on representation by the UAW from February 12th-14th via a secret ballot. Previously, the union had pushed for a “card check”, but it now looks like the matter will be taken to a vote.

Per the UAW

Together, Volkswagen Group of America (VWGOA) and the UAW will set a new standard in the U.S. for innovative labor-management relations that benefit the company, the entire workforce, shareholders and the community in general. From Feb. 12-14, Volkswagen workers in Chattanooga, Tenn., will decide the issue of union representation in a secret ballot election supervised by the National Labor Relations Board. If the majority of workers vote for UAW representation, workers would then elect a bargaining committee from among VWGOA workers in Chattanooga to negotiate an agreement with the company, including how a works council would operate in the Chattanooga facility based on the principles of co-determination


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NLRB To Conduct Hearing on Alleged Worker Intimidation at Mercedes-Benz Plant in Alabama Wed, 29 Jan 2014 16:19:57 +0000 28_Millionth_Vehicle_at_Plant_Tuscaloosa

The National Labor Relations Board will conduct a hearing to discuss allegations regarding management conduct at Mercedes-Benz’s Vance, Alabama plant. The reports filed with the Board allege that Mercedes violated worker’s rights by forbidding discussion of unions during working hours, as well as threatening termination of employees that solicited for the union.

The UAW accuses Mercedes of suppressing efforts by employees to organize, in violation of the National Labor Relations Act. Mercedes claims it has pursued a policy of neutrality regarding the unionization of its workforce. The NLRB dismissed one complaint filed against the company in August of last year. But two other complaints filed in the fall were accepted by the NLRB as possible violations of labor law. The hearing, to be conducted on April 7, will allow both sides to present their case before a judge. The recommendation of that judge will influence the final ruling by the NLRB. A ruling against the complaint would strengthen the position of Mercedes and the union’s political opponents, but if the NLRB finds a violation of the law, it could be a major coup for the UAW.

This is the latest development in an ongoing campaign to unionize the plant, which builds the M, R, and GL Class near Tuscaloosa. Pro-union employees cite stagnating wages and reduced benefits as part of their reason for considering unionization. This leaflet issued by the UAW organizing committee alleges that since 2007, Mercedes has slashed healthcare plans for retirees. Supposedly, employees hired after 2009 will not be eligible for any retiree health benefits whatsoever. Employees have also voiced concern over the increased use of temporary workers at the plant. Still others point to a general decline in the relationship between labor and management, with complaints about inconsistent application of company policy. Others dismiss the need for a union, pointing out that high-paying jobs were scarce in the area before Mercedes arrived. They fear that the UAW may damage Mercedes’ recent run of success in the US. This includes an expansion of the plant to build the new C-Class later this year.

Although it has not yet succeeded in organizing the main Mercedes plant, the UAW has had a measure of success with Mercedes’ suppliers. The parts makers Faurecia, Inteva, ZF, and Johnson Controls in nearby areas have been organized for several years. It’s possible that the UAW may be able to leverage this success with plant workers in Vance. Even so, the unionization of a major transplant automaker in a right-to-work state remains a daunting task.

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NLRB Rules Against Anti-Union VW Employees Fri, 24 Jan 2014 19:01:44 +0000 2012AerialfromWest

Reuters is reporting that the office of the General Counsel for the National Labor Relations Board has recommended that allegations brought by employees at Volkswagen’s Chattanooga plant be dismissed.

The latest chapter in the ongoing saga involving the UAW’s attempted organization of the plant involves eight VW’s hourly employees alleging that

“…the UAW coerced them and misled them to sign cards approving the union’s representation of them. Also, four workers alleged that VW, through a German union representative who sits on the company’s supervisory board, threatened them by linking approval of the UAW as union representatives to future work at the plant.”

According to Reuters, the recommendation to dismiss the allegations will now go to a regional panel, but the workers are planning on appealing the ruling. The allegations stem from an incident that the workers allege involved duplicitous practicing regarding union cards. Observers say that if the ruling is upheld, it could pave the way for a worker vote on UAW representation.

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Toyota Plants In Canada On The Path To Organizing Fri, 13 Dec 2013 12:00:52 +0000 ToyotaProduction

The UAW’s troubles with organizing Volkswagen’s Chattanooga plants are well known throughout the auto world, but Unifor, the Canada union that was once known as the Canadian Auto Workers union, now claims that it has enough union cards to hold a vote on representation.

Speaking to the Windsor Star, Unifor president Jerry Dias claims that 3,200 of Toyota’s 6,500 employees at plants in Cambridge and Woodstock have signed the cards, but Unifor will delay a vote until it is confident it can win a “comfortable majority”.

According to Dias, money isn’t the primary issue for the desire to organize, and workers are confident that the backlash from unionizing will be minimal

“We’ve had other organizing drives in the past, but this one is by far the most successful..the  workers are getting older. The issues aren’t so much wages. It’s line speed and the company unilaterally imposing changes to shifts and pension plans that have infuriated people…they used to be afraid that the plant would close. They see that’s not true. Toyota built more than 500,000 cars in Canada last year. They’re not going anywhere.”

Dias reported that 85 percent of Toyota plants worldwide are unionized, and that Unifor is expecting minimal interference from the company. Having just returned from meetings with Japanese union leaders in Tokyo, Dias said that Japanese unions will ask Toyota officials not to have Canadian management interfere with the organizing drive.

This isn’t the first time the CAW/Unifor has tried to organize Toyota plants, or other transplants for that matter. The former CAW made a lot of noise about organizing Honda’s Alliston, Ontario plant, and has been at it since the 1990′s but nothing has panned out to this day.

While Dias asserts that the majority of Toyota plants are unionized, one key detail not mentioned is the differing nature of unions in North America and a place like Japan. Japanese labor unions are far less adversarial in their relationship with the company than an entity like the CAW/Unifor. The harmonious relationship is essential to the Japanese outlook on labor and business. During our research into the Honda-CAW matter, one former Honda employee with labor relations expertise told TTAC that organizing

“…runs counter to the Japanese concept of loyalty. The whole idea is that if you’re loyal to the company, they’ll look out for you and your best interests….Honda also doesn’t want an outside force interfering in the way their plants are run….[Organizing] interferes with the management structure of the plant itself – which is unacceptable to them.”


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Labor Unrest In South Africa Sat, 25 May 2013 08:37:04 +0000 Rubber bullets South Africa - Picture courtesy

South Africa’s main auto union threatened to “halt production” at a Volkswagen after union members were fired, Reuters says.

“We call on the Volkswagen South Africa oligarchy to immediately stop these dismissals of workers. If VWSA fails to adhere to this demand, we will be forced to halt production until this impasse is resolved,” the National Union of Metal Workers of South Africa told the wire.

Tensions in South Africa are high. On Tuesday, ten striking South African miners were hit by rubber bullets, as labor strife spread ahead of mid-year pay negotiations. A Mercedes-Benz plant in the country was shut for two days when workers walked out after they were asked to remove their overalls when going outside, and not to wear them when returning..

Metal workers in South Africa demand a 20 percent industry-wide salary hike.

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Ecoboost May Put The Squeeze On Ford’s Canadian Engine Plants Thu, 28 Feb 2013 18:16:18 +0000

Ford’s plan to ramp up production of their Ecoboost engines may negatively impact the Blue Oval’s Essex engine plant in Windsor, Ontario.

The Essex plant, which currently employes 800 workers and operates with three shifts, is in danger of moving to two shifts as Ford’s V8 engines are increasingly replaced by the forced-induction 4-cylinder engines. Essex produces the 5.0L V8 engine used in the F-150 and the Mustang.

According to the Windsor Star, the Canadian Auto Workers union says that the total volume of engines isn’t expected to decrease for 2013, but the next-generation Mustang’s likely move to an Ecoboost powertrain could bring lower demand for the V8. The addition of an Ecoboost Mustang is expected to increase its profile across the Ford lineup, with 95 percent of Ford’s cars offering it as an option (up from 90 percent currently).

On the bright side, the V8 doesn’t seem to be going anywhere. Despite the Ecoboost’s popularity, a majority of F-Series buyers opt for the V8, – heavy-duty vehicles still rely on the naturally aspirated V8 for their motivation, while the Ecoboost makes up 40 percent of F-150 sales (V6s account for 53 percent overall). Meanwhile, Ford’s Oakville plant, which assembles the Edge and Flex crossovers, is slated to get an all-new global platform and add hundreds of jobs (largely composed of previously laid-off workers).

But nothing is a given with respect to Ontario’s auto manufacturing sector, and even though strong F-150 sales are keeping the Essex plant busy, nobody ever expected Oshawa to lose their truck plant either.

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CAW Opens Up CAMI Contract, Horse Trading Begins For Theta Crossovers Mon, 11 Feb 2013 19:01:15 +0000

CAW members at GM’s CAMI plant in Ontario have voted to begin negotiating their contracts as early as this week  after a vote by workers. At stake is the production of the GMC Terrain and Chevrolet Equinox, two popular crossovers that may have their production moved to Mexico or the United States.

The Theta crossovers, as their known internally, are hot sellers for GM. CAMI is working beyond capacity, and overflow production is currently being sent to the former Saturn site in Tennessee that has been rumored as a possible full-time production facility. The CAW will reportedly seek a deal that is similar to the pattern agreement reached with workers at GM’s Oshawa plants this past summer. GM officials previously hinted that an early contract negotiation and agreement would significantly bolster the Theta crossovers chances of staying in Ontario, rather than moving them to locations with lower labor costs like Mexico or Tennessee.

Another issue in play is whether GM could even do so without violating a key bailout condition. GM is required to keep at least 16 percent of its production in Canada as part of its Canadian bailout package. Having already partially moved the next-generation Impala to Michigan, GM may be in danger of falling below the threshold if Theta production were to go as well (and no replacement product was found).

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GM, CAW Angling For Renewed Crossover Production In Canada Mon, 21 Jan 2013 18:03:47 +0000

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.

While GM has proposed moving production to facilities in Mexico and Tennessee, the auto maker is leaning in favor of sticking with CAMI (though a current arrangement has overflow being sent to Tennessee).

The Globe and Mail reports that GM would like to start negotiations with the CAW soon, rather than in September, to get a better picture of the long-term labor costs associated with production at CAMI. Workers will ostensibly get the same deal that GM’s Oshawa workers recieved, though CAMI’s workforce isn’t able to take advantage of provisions in the deal that mandate cheaper wages for new hires, a key cost cutting measure for GM. With three shifts and overtime in place, there will be little hiring of new workers, meaning that legacy workers and their higher labor costs will continue to make up the bulk of the workforce.

Strong sales of the crossovers has meant that CAMI is operating at 150 percent of capacity, making it one of GM’s most successful plants. Aside from the plant’s success, the continued production of the Equinox and Terrain in Canada will help satisfy GM’s requirements to build at least 16 percent of its vehicles in Canada, under the terms of a bailout package handed out to GM by two levels of Canadian government. Early reports suggested that the departure of the Impala and Equinox/Terrian would bring GM below that threshold.

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Ford To Re-Hire 400 Laid Off Workers In Canada Fri, 30 Nov 2012 16:48:14 +0000

As part of its agreement with the CAW, Ford will open up 400 jobs to laid off workers from its Windsor and St. Thomas plants (aka the birthplace of our beloved Panther) – but with 885 potential applicants and 400 jobs, allocating them will be tricky.

The new jobs come as part of a third shift being added at Ford’s Oakville plant, which currently builds the Ford Edge and Lincoln MKX, among other vehicles. Oakville is in line to get a new “global” platform in the next few years, and the third shift will add needed manpower.

The Windsor Star reports that jobs will be given to interested parties based on seniority, but not everyone is eager to them them. St. Thomas and Windsor are located roughly 100 and 200 miles respectively from Oakville, and the commute involves the congested 401 highway. The cost of living in Oakville, an upscale suburb of Toronto, is also far higher than in the other two locales.

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Strike At Lear Plant Ends, Oshawa Production Back On Track For GM Tue, 30 Oct 2012 16:33:17 +0000

A brief, two-day strike at a Lear seat plant near Toronto has ended, with production at GM’s Oshawa plant back on schedule.

400 workers at Lear’s Whitby, Ontario plant walked off the job for two days after talks between Lear and the Canadian Auto Workers union broke down. The plant supplies seats for GM vehicles like the Chevrolet Camaro and Buick Regal, as well as other vehicles built at Oshawa.

Reuters reports that the consolidated line, which builds the current generation Impala, was down temporarily, while the flex line, which builds the Camaro and Regal, stayed active, although production was disrupted. Westcast, the prolific exhaust manifold manufacturer, is still affected by a strike at their Ontario plant, and no resolution with the CAW appears in sight.

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CAW Merges, Creates “Super Union” Open To All Tue, 16 Oct 2012 14:46:00 +0000

A merger between the Canadian Auto Workers union and the Communications, Energy and Paperworkers union passed a ratification vote Monday, which will see the two unions merge and create the largest private-sector union in Canada. The new union won’t be limited strictly to workers either.

According to the Toronto Star, the new union

“…would go beyond organizing workplaces and begin recruiting students, seniors, the unemployed and anyone who shares its social and economic goals…”

A founding convention in 2013 would apparently determine issues such as whether those members would be responsible for paying union dues. CAW President Ken Lewenza was quoted as saying

“We’d be more than glad to represent the 99 per cent of Canadians and take on the 1 per cent that have had it their own way for too damn long…”

With private-sector union membership at an all-time low of 17 percent of the workforce and public opinion turning away from organized labor, the CAW’s merger plan is an astute attempt to shore up their dues-paying base, to say nothing of their rhetoric about the 99 percent. Whether they will be able to attract students, seniors and the like is another matter. The student movement in Canada lacks influence on campus, let alone in any broader sphere. It’s hard to see this as anything but a move borne from desperation.

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CAW Workers Ratify Chrysler Agreement As The Countdown To 2016 Begins Mon, 01 Oct 2012 14:19:49 +0000

Workers at Chrysler plants in Windsor and Brampton, Ontario ratified the CAW’s labor agreement by an overwhelming majority, despite a lack of new product or investment at either plant.

A new paint shop and a third shift at the Brampton Assembly Plant were rumored in the run-up to the deal, but neither materialized. While current jobs are protected under the agreement, what happens after its expiration at the end of 2016 is now the question on the minds of everyone from plant workers to industry observers.

When we last left off, I put forward the theory that Chrysler could move production of the LX cars to Italy, alongside the rumored baby Jeep that is thought to be part of their plan to export Italian-built cars to North America. TTAC readers suggested that this was a stretch, and the more likely candidate was Mexico. This isn’t out of the realm of possibility, but the question of “what will be built in Italy?” is a big question mark staring us all in the face.

In the mean time, CAW President Ken Lewenza will pursue his “National Auto Policy“, which demands that the government devalue the Canadian dollar, suspend free trade talks with Japan and South Korea and take equity stakes in OEMs. When the CAW’s Auto Policy initiative was first floated back in April, The Globe and Mail dubbed it “retrograde“, and some of its tenets, like devaluing Canada’s currency, seem totally implausible to the point where it’s difficult to take the proposal seriously. At best, it’s merely a distraction from the lack of meaningful gains with Chrysler in the areas of product and investment. At worst, it’s a foolish idea with little grounding in reality that will only serve to expedite the process of sending jobs abroad.

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CAW Workers Ratify Ford Agreement, No Deal With Chrysler Mon, 24 Sep 2012 14:38:52 +0000

CAW members ratified an agreement with Ford with 82 percent in favor of the four-year labor deal that brings an overhaul to the automaker’s pension plan for assembly plant workers, and extends the new hire wage climb process.

GM workers will vote on their contract later this week, while Chrysler remains the sole automaker to still be negotiating with the CAW.

CAW President Ken Lewenza told the Windsor Star that a deal with Chrysler “…should not take more than five or six days…” to be hammered out. As of Monday morning, there was no indication of an imminent agreement. The rumormill suggests that Chrysler is unhappy with the signing bonuses and COLA payments that are a part of the “pattern agreement” with Ford, with the Star saying

Chrysler informed the CAW Friday that the Ford pattern was too expensive. It is particularly opposed to the reinstatement of the cost of living allowance in the last quarter of the four-year deal, which expires September 2016.

The company doesn’t like COLA because it is a fixed cost that kicks in regardless of profitability, and compounds and adds to wage rates over time.

While Chrysler CEO Sergio Marchionne has previously discussed moving production out of Canada if the CAW doesn’t agree to a UAW-style two-tier wage system, doing so, according to the article, would cost about $2 billion.

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Ford Still Mum Regarding Genk Plant Closure Fri, 14 Sep 2012 18:47:28 +0000

Union leaders met with Ford officials last week during Ford’s Amsterdam extravaganza, and when the topic of closing the Genk, Belgium plant was raised…nothing was said.

Genk, which employs 4,000 workers and builds the Mondeo and S-Max minivan, is looking like the next victim of European overcapacity.

With the new Mondeo now a world car, the door is open for alternate assembly locations – such as the United States or Mexico. The car has already been delayed by six months. Supplies and workers are getting nervous. Speaking to Reuters, union chief Luc Prenen said

“We asked about the rumours (of plant closure)…They said they could neither confirm nor deny them.”

Ford officials were equally evasive, stating that “…It’s too soon to provide any specifics about our plan for Europe.” But with European car sales at their worst in nearly two decades, and Ford bleeding money in Europe, it wouldn’t surprise anyone to find out that Ford packed up and left Genk.

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Marchione: CAW Must Come To “Stark Realization” Of The Facts Fri, 14 Sep 2012 14:11:02 +0000

As negotiations between the Big Three and the CAW continue to grind away, Sergio Marchionne had more strong language for the union.

Speaking at a charity event for the United Way in Detroit, Marchionne told Reuters

“The facts are the facts and I think that ignoring them or sweeping them under the carpet is not going to make anybody’s life better…”My sincere hope is that we all come to the stark realization of where we are and then we move it on from here,” 

Marchionne wouldn’t elaborate on his comments, but having already developed a reputation as being the toughest of the Big Three negotiators, Chrysler is likely digging in their heels for a fight – but maybe not a strike.

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CAW Opens Door For Wage Cuts Thu, 13 Sep 2012 15:50:14 +0000

With the CAW’s strike deadline just four days away, the union has apparently tabled a proposal to reduce wages for new hires, a move that would stop short of a true two-tier wage system, but meet a major demand of the Big Three auto makers.

According to The Globe and Mail, New hires at CAW plants currently start at a lower wage for the first six years of their career. The new proposal would extend that period to 10 years, though it wouldn’t implement a permanent two-tier system, such as the one adopted by the UAW.

Auto makers have been demanding that the labor costs for the CAW and UAW reach parity, while the CAW cites a higher cost of living as one of the main factors for the wage discrepancy. While CAW President Ken Lewenza has adamantly opposed a permanent two-tier system, the compromise is a positive sign that averting a strike is in the interests of both parties.

Furthermore, a compromise that impacts new hires, rather than the current rank-and-file, will be an easier pill for CAW members to swallow come ratification time. The Globe also reports that benefits for new hires may be cut back – a move that, if attempted on the current employees, would be poorly received, to say the least.

Now, the only question is, will there be two-tier union dues?

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Marchionne: Chrysler Has “Other Options” Beyond Canada Mon, 10 Sep 2012 14:01:45 +0000

With the CAW’s strike deadline looming, Chrysler CEO Sergio Marchionne is taking a harder line in the media, pushing his vision of a profit-sharing agreement between Chrysler and the CAW, while boldly stating what everyone knows, but is afraid to say; auto makers have “other options” when it comes to building cars.

Chrysler, in particular, has plenty of unused capacity in Europe, thanks to slow sales of brands like Fiat and Alfa Romeo. On paper, the underutilized European plants could fill in for Canadian factories should things go south, though the logistical realities are much more complex.

Marchionne, along with other automakers, are said to have been pushing for a Canadian labor contract similar to the 2011 agreement between the auto makers and the UAW; labor costs in Canada would be brought to the same level as American plants via a two-tier wage system (with new hires making about 50 percent less than current employees) and a profit-sharing system would replace guaranteed wage hikes. One source at a Big Three automaker told TTAC that the unions are apprehensive regarding profit-sharing, due to fears that a vehicle could flop due to factors beyond their control (such as a botched marketing campaign or a similar screw-up), causing them to lose out on the bonuses.

Speaking to The Globe and Mail, Marchionne was adamant in presenting his proposal as the most equitable solution

“People have got to get it through their heads that I’m not Mr. Scrooge here,” he said…I’ve got to run the business and the business says that, if I do well, I’m willing to distribute that wealth…I cannot institutionalize and guarantee you that wealth.”

Chrysler is looking to add a paint shop to their assembly plant in Bramalea, Ontario, where the full-size LX cars are built. The $400-million investment would add another decade to the plant’s lifespan while adding 1,000 new jobs, but Marchionne is hesitant to invest in the plant given the current climate

“You need to deal with the question of the disparity of the Canadian manufacturing environment and the American one,” Mr. Marchionne said. The question is: Do you commit capital when your overall [cost] structure is higher than it is in the best alternative, which is the U.S.”

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CAW Mulling Strikes At All Three Automakers Wed, 05 Sep 2012 17:05:52 +0000

A report by Reuters suggests that the Canadian Auto Worker’s union may take the unprecedented step of striking at the plants of all three domestic automakers.

Traditionally, the union targets one company for bargaining and a possible strike, and that sets the precedent for contracts with the other two. This round of negotiations has been particularly tense; labor costs in Canada are considered to be the highest in the world, and auto makers are looking to bring them down to the level offered in the United States.

Reuters sums up the matter, stating

The Canadian Auto Workers (CAW) said strike committees will be formed by local unions at Ford of Canada, General Motors of Canada and Chrysler Canada this week, ahead of the union’s strike deadline of 11:59 p.m. eastern (0359 GMT) on September 17.

“It is our hope and intention to reach an agreement with at least one of the three companies before the deadline,” the union said in a leaflet distributed to members. “We must be prepared, though, to shut down operations at all three, should we be unable to reach an agreement.”

The unions are demanding that no more concessions be made on their end, in light of their sacrifices made during the bailout period contract negotiations. Compromises, such as profit sharing, have been floated by the auto makers, but only recently has the CAW changed their hardline stance against it.

TTAC readers with experience working in auto plants have suggested that a strike won’t happen, and that negotiations will eventually lead to an equitable settlement. It’s likely that talk of a strike at all three automakers is simply rhetoric in the run-up to more intense negotiations.

Reuters quotes Gary Beck, chairman of the CAW’s Ford master bargaining committee as stating

“We have been sitting down with all three companies, and no one has taken the initiative to lead,” he said. “This will, hopefully, wake them up.”

In our eyes, that’s a fairly strong piece of evidence to support the above theory.

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CAW May Try New Tactic Of Simultaneous Talks With Automakers Thu, 30 Aug 2012 12:00:47 +0000  

The CAW may abandon their tactic of using negotiations with one automaker as a precedent for other negotiations, and conduct simultaneous talks with Ford, Chrysler and General Motors.

The CAW is holding separate talks with the Big Three automakers in Toronto, and the union is staying mum about a possible “target automaker”, in the apparent hopes that the simultaneous talks are successful. The CAW’s contract expires at 11:59 P.M. on September 17th, and CAW President Ken Lewenza told Reuters that any decision regarding a target company would come at least five days beforehand.

The new tactic isn’t entirely unheard of; the UAW used the simultaneous negotiations move in 2009, though they ultimately settled on GM as their target. Given the incredible tough climate for both the CAW and the automakers, this could be a way for both of them to reach a compromise while mutually saving face. All three automakers are looking to reduce labor costs, while the CAW, at least publicly, is dead set against concessions on the part of the workers.

Speaking to the Windsor Star, Lewenza said that

“If I have it my way, I won’t have to announce a target company…If one of the companies will signal that we can get a deal, if we can get the framework of a deal in the next 10 days and I share that framework with the other companies, there won’t be a need for a target company,” he said.

Given Lewenza’s recent tone (which may be understandably firmer in the run-up to negotiations) this seems fairly pragmatic. And how about this nugget, also reports by the Star

If the companies “agree that workers are entitled to share in their success in a modest way, we can get a deal,” said Lewenza.

What does that mean? An open door for profit sharing…?

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In A Race For Survival, The UAW Plays The Race Card Tue, 31 Jul 2012 21:05:40 +0000

Two times, the UAW tried to unionize the Nissan plant in Smyrna, Tennessee. Twice, the Union received a black eye. The UAW is trying a third time, this time counting on the fact that  “an estimated 70 percent of the workforce is black,” says Reuters in a feature story on the UAW’s last ditch effort to gain relevance in the South.

Says Reuters:

“As the United Auto Workers embarks on an uphill battle to organize Nissan Motor Co’s plant in Mississippi, it is drawing inspiration from the famous struggle waged in the state during the civil rights movement.

The union sees a winning strategy in depicting the right to unionize freely as a basic civil right.”

The problem is, the winning strategy seems to go over the heads of the people it wants to connect with. Says Reuters:

“But the connection between civil rights history and the right to join a union or have a voice in work processes may be too abstract. Workers interviewed by Reuters, both for and against the union, said they simply have not thought about the civil rights link.”

Hate to say it, Bob King: You are no Martin Luther.

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South Korean Auto Unions Gearing Up For Strike Thu, 12 Jul 2012 13:00:43 +0000

More than 70 percent of Hyundai’s 45,000 strong worker’s guild voted in favor of job actions, including a walkout planned for Friday. The guild is building up towards Hyundai’s first labor strike since 2008, as they seek better wages and reduced hours.

A report by Bloomberg lists the demands of Hyundai and Kia workers (who are also participating in the job action) as

a 151,696 won [$131] increase in monthly base pay [salary is around $39,000 for the average worker] and that the companies return 30 percent of net income to employees as bonuses…other demands include switching Hyundai Motor’s plants to two eight-hour shifts from the current double 12-hour rotation system…

Hyundai’s last strike in 2008 lasted 12 days and cost the company approximately 44,645 vehicles. The expanded overseas manufacturing presence of both Hyundai and Kia should help mitigate some of the damage, but a strike will still have negative effects on the steady sales growth of the two brands. While South Korean production only accounts for 46 percent of total production (down from 60 percent in 2008), overseas plants are operating at near full capacity, leaving little breathing room.

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