UAW, Detroit Three on collision course
On July 15, the United Auto Workers formally began talks with Ford, General Motors and Fiat Chrysler on a new four-year contract. It was all smiles and handshakes to start, but negotiations will surely get testy before the current contract expires Sept. 14.
The UAW is pushing for wage increases instead of profit-sharing or bonuses. The Detroit Three are advocating the opposite. The UAW wants fewer temporary workers; the automakers want more. The union wants job security and assurances that new products will be made in the U.S.; the automakers want “flexibility” to prepare for a future of autonomous and electric vehicles. The UAW wants to shorten the eight-year timeline to bring former “tier-two” workers to the top of the pay scale. The Detroit Three want to keep wage and health care costs in check.
What could go wrong?
There’s no denying the Detroit Three have enjoyed a good run of late. From 2015 through 2018, the Detroit Three collectively earned more than $55.7 billion in profits. Now, union workers feel they’ve earned a piece of that pie. “Despite record corporate profits, we’ve been watching a race to the bottom over the past several years for working men and women in this country. …This must stop,” declared UAW President Gary Jones in a speech to open the talks.
On the other hand, management at the Detroit Three can’t award contracts based on past performance. They’ve got to look ahead to the next four years, and they’re not forecasting sales of 17 million vehicles per year, as has been the case the past few years.
By the time you read this, the UAW will have picked its lead company to negotiate with. It will try to reach an agreement with that company first, setting a template for the other two. I wonder if it will be GM? The union is none too happy with the automaker after its announcement last November to idle assembly plants in Michigan, Ohio, Maryland and Canada, resulting in the loss of thousands of union jobs. There was also GM’s recent decision to assemble the new Chevrolet Blazer at a factory in Mexico rather than the U.S.
Could a strike be in the cards? I hope not, but the union has increased strike pay from $200 to $250 per week.
Certainly, the union has a lot to prove to membership. In June, it narrowly lost a bid to represent workers at Volkswagen’s assembly plant in Chattanooga, TN. It was the second time in five years that VW workers rejected the UAW, and it marked another failed effort by the union to organize a foreign-owned car plant in the South. UAW leadership is also trying to overcome the fallout from an ongoing federal corruption investigation that has already led to eight convictions and raised questions about the sanctity of past labor negotiations.
Let’s hope for a fair agreement for both sides.