By on May 1, 2008

singles06shit-creek.jpgThe United Auto Workers (UAW) just lost their bargaining power in their strike against American Axle. When the strike shut down the plants supplying GM's truck and SUV plants, the union thought GM would put pressure on AA to settle quickly– so the automaker could get the lines running again. Not so. GM used the shutdown as an opportunity to purge its supply pipeline of a glut of slow-selling trucks. Then they "found" axles elsewhere to continue production of their better-selling models. Even after two months, GM still isn't feeling much pain from the strike. Instead, they've announced they're going to cut truck production drastically, meaning American Axle's Mexican operation can produce enough axles to [almost] meet their need while other suppliers take up the slack. To use an old military saying, the UAW has shit in their own mess kit. Even if they accepted all of AA's demands for salary and benefit cuts, there won't be a job for many of them to go back to. Looks like Ron Gettelfinger will have a lot of 'splaining to do, especially as they make a push to organize Toyota's operations.

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24 Comments on “UAW American Axle Strike Backfires, Big Style...”


  • avatar
    menno

    The other little salient fact which I strongly suspect has come about since the Delphi and now AA debacles, is that the Detroit 2.8 (and no doubt, Toyota, Honda, Nissan, Subaru, Hyundai, Mitsubishi, BMW and Mercedes Benz) are lining up RELIABLE suppliers, note the PLURAL here, for their “must have” components for North American production.

    And I’m going to surmise that much of that work is outside the realm of UAW plants, as well.

    Perhaps TTAC should start a UAW/CAW Death Watch, or more to the point, Suicide Watch.

  • avatar
    KatiePuckrik

    So, the unionisation of Toyota looks to take a huge hit, GM are relatively insulated from the strike and the UAW may have striked their jobs away.

    (bursts out laughing)

  • avatar
    mel23

    KatiePuckrik,

    Laughing at what if I might ask?

  • avatar

    Easy people. Keep it civil.

  • avatar
    oboylepr

    Is it really possible that the UAW is so unaware of the market dynamics that it thought the loss of truck/SUV production would hurt GM at this moment in time? I cannot prove this of course but I smell GM/AA/UAW cullusion on this one. It just plays into GM’s hand TOO well. Good luck to GM, it is nice to see something sorta, kinda go their way for a change.

  • avatar
    mikey

    We were told of the truck shift reduction by our supervision on Monday afternoon.We were also told that the Impala field stock was down to 23 days.We were informed at that time,that management was doing all they could to bring our 3rd shift back and get the Sat OT shifts back on.

    Believe me good news is hard to come by these days.I think management is sincere in thier efforts to [A]settle at American Axle or [B]secure another supplier.

    With the Truck plant on life support,we need that Impala plant to run flat out.For us and the corporation.

    So yes the American Axle strike is still having a huge impact.

  • avatar
    jthorner

    In today’s complex economy, the value to a union of a strike declines with every passing day. Why? Because production simply gets moved elsewhere.

    Remember the UPS strike several years ago? Had it gone on six months longer UPS would have simply vanished and the slack been taken up by Fed-X, DHL, the Post Office and other carriers. UPS and the union settled when it became obvious that the customer base was rapidly working around the problem.

    GM will continue to work hard to find alternate suppliers, and if they don’t …. customers will simply buy Ford, Toyota, Nissan or other products.

    Strikes are almost equivalent to the old pseudo-medical practice of bleeding the sick. While there are actually a few rare diseases where it helps, often as not it weakens and/or kills the patient.

  • avatar
    mel23

    Robert, point taken.

    I’ve been very lucky in my working life to have the ability and opportunity to do well in the IT field. But I grew up in a blue collar environment where low wages and frequent layoffs were a constant burden, at times really terrorizing. It is a terrible way to live. Sure some hourly types are screw offs, but many are not; they do the dirty, boring and body-wearing jobs for decades to take care of their families and hopefully give their kids an education and the shot at a better life. When these jobs disappear, in fact they do not have other opportunities. Often the economy and jobs of the entire region crash; there are no opportunities. If they can’t pay the rent or mortgage, where are they going to live? Think of how it feels to be a kid in this enviroment. And kids do know what’s going on I assure you. Lots of people with BS/BA degrees are driving trucks now, and it’s going to get a lot worse. My hope in all this is that people will wake the hell up, pay attention to how they vote and realize that we are all part of the same world.

  • avatar
    Lumbergh21

    Katie Puckrik:

    I understand the irony of striking for better compensation only to lose your job and the union losing out as well in terms of membership numbers.

  • avatar
    guyincognito

    @ menno:

    Actually it has been in progress much longer than that. Detroit has been working with Chinese suppliers to tool up any and every component for years. Everyone knew that Delphi and Visteon werent Viable on their own.

  • avatar
    bluecon

    Dear Jim:

    Re: E-mail to Buzz

    You ought to know better! You were a representative at Pillette Road where we had three different investment commitments and the plant ultimately closed because of market share losses. Chrysler as well as Ford and GM continue to shrink so there is no such thing as “protection” if your reference is to jobs.

    The recent economic agreement is a huge victory for Big Three workers because the changes we made were kept at a minimal. Why is that? Ford, Oakville is expected to launch their third shift – very important vehicle to their survival so it made sense to utilize that only pressure tactic we had and the timing is perfect. GM and Chrysler (as witnessed by the American Axle Strike) could go down and nobody would even care. We would have to call them to advise them we are on strike. Huge inventories, and slowing sales are getting worse by the minute. Buzz seized the moment – progressive thinking and took full advantage of the one card in the deck. I am involved in every strategic decision of the Union, so please feel comfortable in contacting me directly. The auto industry’s “historic domestic” is in serious, serious trouble and the market is huge reason for concern.

    By the way, the membership has the ultimate say in our strategic planning.

    Take Care”

    From Kenny Lewenza, CAW union leader, bottom of page 10
    http://www.autoworker.net/forums/index.php?showtopic=16927&st=135

  • avatar

    guyincognito:

    Everyone knew that Delphi and Visteon werent Viable on their own.

    Interesting comment, as knowingly spinning off a company that can’t sustain itself, while claiming it can, is a big time corporate fraud type no-no. GM was never fully taken to task for this.

  • avatar
    guyincognito

    @ RF,

    Right, I meant to say: Everyone should have known, in my opinion, that Delphi and Visteon weren’t viable on their own. Although, the subsequent tooling up of Chinese replacements was most likely a coincidence…

  • avatar
    KatiePuckrik

    Could I just clarify to everyone, that the reason I laughed was the irony at the situation.

    It’s almost as if, someone, somewhere doesn’t want the rank and file to have a fair deal.

    Please refer to my previous posts, as to how I support the UAW….

  • avatar
    P71_CrownVic

    HAHAHAHAHAHAHA…..take that you greedy UAW.

  • avatar
    50merc

    The basis for the Big 3’s historic prosperity crumbled when they, as the high-cost producers, lost oligopolistic pricing power. The leverage that yielded remarkable compensation packages for the UAW/CAW shrank when they, as the high-cost suppliers, lost monopolistic pricing power.

    A vehicle produced in North America gets bonus points from me. But I’m afraid there aren’t enough buyers that feel that way to allow Detroit to avoid drastic restructuring.

  • avatar
    joebar32

    Oh man, I so called this one back when you posted that this was going to hurt GM big.

    I’ve worked for and with the UAW and Teamsters and if there’s one think I can guarantee it’s that the union bosses try very hard to make the union members forget that the union doesn’t sign the paychecks. Far too many union workers have bought into the us/them mentality and forgotten that the union isn’t going to give them a job if a strike goes bad. There’s a lot of people who learned that the hard way when the UAW tried to take on Cat in the late 90’s. I don’t remember the exact length, but it was over 2 years they struck and the reduction in production and labor costs actually helped Cat in the long run. Being out of work that long certainly didn’t help the workers. The union bosses however, made their full salary the whole time.

    I feel sorry for the AA workers. They’re only trying to make a living and the guys that are supposedly looking out for them have dug them into a huge hole.

  • avatar
    ihatetrees

    mel123:
    I’ve been very lucky in my working life to have the ability and opportunity to do well in the IT field. But I grew up in a blue collar environment where low wages and frequent layoffs were a constant burden, at times really terrorizing. It is a terrible way to live.

    I have also been fortunate to do well in IT. However, I grew up in a blue collar environment where wages, benefits, and perks were unreasonably high. I’ve seen it destroy individual incentives to improve and mandate group think economic mentalities that see US manufacturing thru a distorted 1960-1970 lens.

    Lots of people with BS/BA degrees are driving trucks now, and it’s going to get a lot worse. My hope in all this is that people will wake the hell up, pay attention to how they vote and realize that we are all part of the same world.

    Lots of Americans have basket weaving degrees that have little demand in today’s world. Meanwhile, technical, blue collar fields like Tool & Die maker or Machinist struggle to find enough workers.

    American manufacturing isn’t vanishing. However, old style, work-to-rule, over-paid, unionized American manufacturing is vanishing.

    And while I sympathize with those whose lives will be turned upside-down by Detroit’s implosion, the writing’s been on the wall for a decade plus. They should have prepared…

  • avatar
    carguy

    Katie – don’t feel bad about your comment. I really wish GM to do well and the fact that they are finally getting their own way with the UAW is good news. The demise of the UAW can not come soon enough for either GM or it’s members. While historically unions have done well for workers, that time has passed and all I see now is the union management representing it’s own interest. Pointless muscle flexing by the UAW will just cause more jobs to leave the north east.

  • avatar
    EJ_San_Fran

    Looking at April sales numbers the AA strike seems to be firing back at GM as well!
    Despite all the pooh-poohing, and despite still large inventories, GM sales have been hit hard. Or is it all just because of horrible shrinking demand?

    For instance:
    Chevy Trailblazer: April sales -75%, April production -100%
    (not that anyone would shed a tear over missing Trailblazers though, right?)

  • avatar
    RedStapler

    You can actually make a comfortable living driving truck if you are smart about it and stay away from Long Hauling.

    From an income/employability perspective you are much better off with a in demand “blue collar” that you can learn in 1-2years & $15-25k than spending $30-50k+ for a BA is some liberal nonsense like ethnic studies.

    ihatetrees
    Lots of Americans have basket weaving degrees that have little demand in today’s world. Meanwhile, technical, blue collar fields like Tool & Die maker or Machinist struggle to find enough workers.

  • avatar
    Landcrusher

    mel23,

    Maybe we should all recognize we live in the same world and stop trying to be unrealistic about it.

    Just read in the WSJ today that India is now short skilled construction workers. They, are having to train illiterate people who have never seen an elevator to build steel and concrete buildings. Presently, these people make $1.50 a day and live in squallor, but guess what – The shortage is causing the builders to now provide above average living conditions for it’s workers to keep them from defecting to other builders. The workers dorms that are going up are nicer than the house my dad grew up in.

    The market will work so long as no one colludes against the employees. AND, so long as the employees cannot unfairly collude against the companies.

    Having unions prop up wages over market levels is the proximate cause of these plant closing disasters that leave the people with no choices (other than to kick themselves in the butt and start being independent), not the ultimately inevitable outsourcing or moving of production oversees. Had the union not sold these people a bill of goods, many more of them would have chosen careers that offered better futures. The wages would have risen and fallen over the years as the market could bear it, and less pain would have been had overall. More importantly, not expecting a guaranteed living, the workers would have likely been better prepared, or used the entry level labor job as a stepping stone to move up or out.

  • avatar
    blowfish

    Many years in Ontario a fnd works in the Ice cream factory. The Union decided that calling a strke in the middle of cold January is a good thng.
    Ofcourse it would have worked very well in Australia. But in middle of cold Ontaron Winter wll anybody miss Ice cream?
    Negotiating is a very difficult skill, quite often u can miss the boat.

    If u go for basket weaving degree u look for those job & good luck fnding them too.

  • avatar
    NickR

    Mikey, I don’t want to wander off on a tangent, but do you have any idea why the small engine in the pickups is the Vortec V6 and not the Atlas 4.2 inline-6? That makes no sense to me.

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