The Future Of The Union Hangs In The Balance



Autoworkers are damned and determined to win back concessions.
The noises you might here if you drop in at Solidarity House – the headquarters of the UAW – this week are the sounds of union leaders scrambling to prevent what could be a catastrophic confrontation that is beginning to look increasingly inevitable.

In the weeks leading up to the mid-summer launch of contract talks with Detroit's Big Three, United Auto Workers Union President Bob King stressed that he was pushing for "creative problem solving." The best way to read that statement was that he was looking for a way to keep the automakers competitive in return for more jobs – while also seeking a way to sell new contracts to workers who were damned and determined to win back the concessions they'd made in recent years.


Paul EisensteinPaul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.



Domestic makers were effectively on par with their transplant rivals.
And those givebacks have been substantial. Leading into the last round of talks in 2007, total wages and benefits added up to nearly $75 per hour for the typical UAW member at General Motors, Ford and Chrysler. After agreeing to cuts in the '07 contract and then significantly more givebacks when two of those makers went bankrupt in 2009, the figure fell to just over $50 per hour.

The good news for the domestic makers is that effectively put them on a par with their transplant rivals, particularly the North American factories run by Japan's Big Three, Toyota, Nissan and Honda. That was enough for the Detroit manufacturers to justify adding thousands of jobs and to look into the possibility of bringing back still more by "insourcing" work that had, over the years, been outsourced to factories in Japan, Korea and China, as well as non-union parts plants in the U.S.

While one has to be wary of the numbers – since promises previously made were repeated in the new contracts – the domestic makers have agreed to add perhaps 10,000 jobs and invest billions into domestic operations as a result of the new four-year contracts hammered out with the UAW.

The settlement at GM was quickly ratified – though by what was a historically low, two-thirds margin. And that sent a signal that trouble might be in the offing. Indeed, trouble appears to be the case as the voting proceeds on Ford's tentative contract.

A number of key Ford plants have turned thumbs down on the contract.
That settlement is the most lucrative of them all, with an up-front "signing bonus" that's $1,000 more than what GM workers got and $2,500 more than the deal at Chrysler. Other features also favor Ford workers. But the contract does not come close to restoring those concessions and, if anything, opens the door to putting even more new workers in the lower second-tier wage and benefit category.

And that's not sitting very well. As Autoblog and my own site, TheDetroitBureau.com, have been reporting, a number of key Ford plants have turned thumbs down on the contract. It very well could be rejected, even as frantic union leaders pull out all the stops hoping to lobby the rank-and-file at the plants yet to vote to give their approval.

Should the contract be rejected, it could lead to all sorts of issues, especially for the UAW, and particularly for the leadership of Bob King, who took the helm just last year.

Ford is the only one of the Detroit makers where the union would be able to strike. A walkout at GM and Chrysler is prohibited – at least for economic reasons – under the terms of their 2009 federal bailouts. As the only Detroit maker to struggle through the automotive depression Ford has no such protection.

That would be ironic as Ford has traditionally had the best relations with the UAW of all the domestics – though that didn't help it get all the same concessions its cross-town rivals got when they went bankrupt. Workers narrowly rejected additional givebacks for Ford to match those given GM and Chrysler.

There is no certainty that the UAW could get anything more without a bruising battle.
The rank-and-file mindset appears to be focused on the fact that Ford is the healthiest of the Detroit makers, reporting billions in profits in 2010 and lining up still more during the first half of this year.

It also didn't help that CEO Alan Mulally took the curiously ill-timed step of accepting tens of millions of dollars in salary, bonus and stock options just before the latest round of contract talks began. That doesn't make it easy to sell the concept of "shared sacrifice," even if Ford's enhanced profit-sharing formula would ostensibly yield shared gains if Ford continues to post big earnings.

If the contract does go down to a "no" vote, it's not certain that a strike would immediately follow. Union leaders would still have the option to extend the old agreement as they returned to the bargaining table. But whether Ford negotiators would be willing to offer anything to sweeten the pot is anything but certain. Clearly, Ford doesn't want to be put back in a disadvantaged position versus the Japanese – and even more so to resurgent rival General Motors.

Meanwhile, a rejection of the Ford contract could see Chrysler employees emboldened to turn down their tentative contract, as well.

Why wouldn't the union welcome the opportunity to go back for a bigger pot? For one thing, there's no certainty it would get much – if anything – more, at least not without a bruising battle. And King and his senior leadership recognize all too well that Ford would likely respond by cutting back on future investments in the U.S., transferring more production – read jobs – out of the country.

If bargainers eventually score a more lucrative contract, they might wind up winning the battle and losing the war.
Considering the UAW now has barely a quarter of the dues-paying membership it could count at its 1.5 million peak in 1979, that's a serious concern. Insiders tell TheDetroitBureau.com that there's a clear recognition that at its current size the union is not sustainable – certainly not as the political powerhouse it had long been.

No one expects the UAW to regain its body count in Detroit alone. So, it has been clear that King's next goal had been to ramp up organizing efforts at the transplants, a score of which now dot the U.S. landscape – most in non-union Southern states.

Only two are currently represented by the union – and then only because they began life as Detroit-Japanese joint ventures. Indeed, a third union plant, the NUMMI factory near San Francisco, was closed after the breakup of a GM-Toyota partnership.

Transplant workers have so far been cool to the UAW's advances. They've seen the union as confrontational and unable to deliver anything they didn't already get. So, the challenge for King was to come up with Detroit contracts that delivered a reasonable level of gains while also showing the UAW could cooperate, rather than confront, at the bargaining table.

If the Ford and/or Chrysler contracts go down to defeat, that image of a "new" UAW that can also work for transplant workers vanishes in a puff of smoke. And so, even if bargainers eventually score a more lucrative contract, they might wind up winning the battle and losing the war.


Paul EisensteinPaul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.



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  • 190 Comments
      • 3 Years Ago
      [blocked]
      Walt
      • 3 Years Ago
      They might also be the noises you hear...... Buy that man a dictionary.
      ELG
      • 3 Years Ago
      welcome to autoblog...I mean unionblog. A proud member of the HuffingtonPost liberal agenda machine.
        • 3 Years Ago
        @ELG
        [blocked]
          • 3 Years Ago
          [blocked]
      iluvovaltine
      • 3 Years Ago
      Ford was going to spend 1.1 billion dollars in the Kansas City area for a new steel plant to supply parts. They were going to hire over 1000 people. This union is ruining America and holding Kansas City hostage. HARSH language, for sure. When you are founded by communists, what can you expect besides threats and destruction? Go read the Biography sections of the union websites. AFL CIO, NAACP and other unions were all formed by communists. This is the result - little to no black representation in unions, black exploitation by unions and the fragmentation and reduction of the American work force. The whole point is to slow down capitalism. The whole point is to extract and steal wealth for those who did not earn it. The communists are revealing themselves. If you are ignorant and claim I am lying, go research my claims. Watch what is happening. Read marx. Learn their language. Anyone who claims income inequality is a bad thing needs to be investigated as a communist. This claim is based upon a false notion that income equality is warranted or worthwhile. Income equality never happens - not even in communist countries. Income equality means that the stupid are paid a measly sum and the party leaders reap the rewards of unrewarded effort. As effort goes unrewarded, even the stupid are smart enough to realize they are being had. So work slows down. The only reason auto worker unions haven't paralyzed the whole industry completely is that real Americans keep that switch from being thrown. The line would stop completely if the unions were in charge. Real Americans are required to keep the switch on and the line moving. Be a scab. WORK FOR A LIVING!
        billfrombuckhead
        • 3 Years Ago
        @iluvovaltine
        Even Adam Smith said, "Labour was the first price, the original purchase - money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased." Here's another Adam Smith quote for the moronic teabaggers, "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce."
        G37S
        • 3 Years Ago
        @iluvovaltine
        Who are these 'real americans' of which you speak?? Surely they cannot be the white man who ages ago came across the big river,stole the land,raped the land,and killed indigenous peoples for no good reason. You sir/madame sound as if you are a closed minded and confused individual,a zealot if you will.
          CarsInDepth.com
          • 3 Years Ago
          @G37S
          Those "indigenous" people were actually Siberian in origin. Before the Europeans came, the "natives" wiped out all the earlier inhabitants that got here before they did. Most North American aboriginals died of natural causes from viral diseases, not warfare. And no, there were no "smallpox infected blankets". North American aboriginals exploited the environment to the extent that their technology allowed them to do so. They wasted plenty. And when they had access to new technology, they embraced it. They waged wars of aggression against other tribes, enslaved other tribes, and in some cases practiced cannibalism. They regarded anyone not in their particular tribe as less human (most tribes' names for themselves translates to "human being", while other tribes were likely to be "snake people" or the like). So when it comes down to it, I have a hard time saying that the Europeans were culturally worse than the aboriginals. The European settlers of North America did create the foundation for something that has given more freedom and more wealth to more people than anything else in human history. But go ahead and feel resentful of America.
      • 3 Years Ago
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      dave and mary
      • 3 Years Ago
      I see this picture of unions "protecting jobs". Then after the union meeting is over, the rank and file head to Walmart 'cause they got the best prices. Think about that for a second.
      SooooRight
      • 3 Years Ago
      Unions are the cancer of freedom.
      stclair5211
      • 3 Years Ago
      Screw the UAW and their space cadet looking leader. Time for little Bo peep to pick this clown up. The mother ship is behind the moon! Quick!!! Drink the KoolAid!!! Screw the UAW and all communist unions. Wake up union members, your organization has been hijacked. The union was meant to protect workers safety and make sure they weren't slaves working for nothing. That's turned into telling the company what they are going to pay them and how much profit they are allowed plus golden parachutes for all. It's ridiculous.
        Mobis21
        • 3 Years Ago
        @stclair5211
        Your attitude towards working class America comes across as vicious, vindictive and venomous. Let me suggest that you take time to consider the consequences of creating a third class America, where working people are condemned to live below their means and very few are able to benefit from economic opportunities. Most economist refer to countries like that as a failed state.
          traveller
          • 3 Years Ago
          @Mobis21
          I gave you Mobis a thumbs up, but this site is counting ups and downs! Ten thumbs up!
      Rebel Ducote
      • 3 Years Ago
      Blaah Blaah.... Ive got at least 5,000 unemployed/underemployed Americans willing to take the Job of each and every one of the potential strikers ( and do it for less). Unions were a great thing (70 years ago). Now all they do is demand that 'WE ALL SHARE THE WEALTH' and if they have to force Ford to close their doors, then so be it cause then those "greedy execs" cant make any more money.
      billfrombuckhead
      • 3 Years Ago
      Until the American middleclass start thinking of themselves more as workers and not as consumers, we as a nation will be at the mercy of the 1 percent. if you have no disposable income, it doesn't matter how cheap products are or how little taxes are. The greatest Republican said, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." Abe Lincoln also said, ""We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . . It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless." '
      Jeff
      • 3 Years Ago
      Just another example of union irrationality. We've got near double digit unemployment, millions of folks desperate for jobs with pay and benefits as good as these. Then these greedy SOB's decide they want to strike because the increase in pay and bonuses offered wasn't big enough. They've got a great gig and aren't even smart enough to realize it!!! Would be great to kick them to the curb and see what they might get in this economic environment without the union. Very little, I'm afraid to say. You wonder why plants get built in south to avoid union BS. Here's a great reason why!
        Mobis21
        • 3 Years Ago
        @Jeff
        The fact that the UAW is seeking to address the wage disparity among their members has nothing to do with the millions of jobless. The unions were not responsible for breaking the economy, outsourcing jobs or cutting wages. The banks on Wall Street are behind the economic wreckage and major corporations outsourcing jobs guaranteed the millions of unemployed who exist today.
          Alex
          • 3 Years Ago
          @Mobis21
          There's absolutely nothing wrong with "major corporations outsourcing jobs". If some "american" doesn't want to work for less than $50/hour (in combined wages and benefits) because he needs to pay for stuff that he rented/leased/financed (a stuff that he can't really sustain paying for and shouldn't have signed up for in the first place) there are plenty of people in the world who will be more than glad to earn even half of that. And as a consumer I don't want to subsidize such irresponsible and greedy domestic workers through the increased price of domestically-manufactured goods.
      • 3 Years Ago
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        guyverfanboy
        • 3 Years Ago
        Workers happy with employer --> no need for union BMW, Toyota, Honda, etc... Workers unhappy with employer --->unionize Detroit 3
          Joseph E Hubbs
          • 3 Years Ago
          @guyverfanboy
          workers that are scared to lose their good paying job with no protection or voice---> BMW, Toyota, Honda, Etc...
          recharged95
          • 3 Years Ago
          @guyverfanboy
          Just look at the last 5 yrs: Cars that have gotten better of the years (Big 3). Built in Detroit, VA, CA, OH. Cars that have quality issues like acceleration problems and electrical problems (BMW, Toyota, Honda). Built in TX, SC, GA, MS. Your call folks. All I see is a zero-sum game. But I agree, the unions are being obviously... selfish.
        kevsflanagan
        • 3 Years Ago
        Exactly. Years ago they did wonders in protecting their rank and file to ensure they got fair pay and benefits. Now though we have government organizations both state and federal that ensure that safety and pay is given to workers. To me there are two types of unions. Unions like the UAW that are now a corporation unto themselves, they care only to have their members make more money at the expense of their employer. Then Unions that ensure there is a standard of service and safety. By those I mean electrical unions for instance. One of my old friends was part of one and he loved it. They helped find him jobs if he wasnt working for a company, and helped him keep him up to date on safety stuff. Obviously I'm for the 2nd type of Unions that simply help and support its members. Unions like the UAW to me are outdated and un-needed if anything are harmful to their fellow workers.
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