US auto in­dus­try braces for la­bor talks

The China Post - - BUSINESS - BY JOSEPH SZCZESNY

The un­easy l abor peace which helped the U. S. auto in­dus­try sur­vive a fi­nan­cial col­lapse will soon be tested as the Detroit Three pre­pare for con­tract talks with the United Auto Work­ers.

“It’s go­ing to be a very tough ne­go­ti­a­tion,” Joel Persinger, the chair­man of UAW Lo­cal 5950 at Gen­eral Mo­tor’s plant in Orion, Michigan, told AFP. “It’s mostly all about wages.” The union — which had seen its ranks dec­i­mated in wave af­ter wave of mass lay­offs as the Detroit Three lost mar­ket share to for­eign com­peti­tors — agreed to ma­jor con­ces­sions in 2007 and 2009 in or­der to help GM and Chrysler emerge from bank­ruptcy pro­tec­tion.

The UAW’s hands were tied when it went back to the ta­ble in 2011 be­cause the terms of a fed­eral bailout barred it from strik­ing.

It has re­gained the right to strike now that the U.S. Trea­sury has sold its stake in GM and Fiat Chrysler Au­to­mo­biles has re­paid its fed­eral loans.

With sales boom­ing, work­ers who haven’t seen a raise in eight years are look­ing to share in the prof­its from the in­dus­try’s re­cov­ery.

But with la­bor costs at U.S. plants run by the Detroit Three still higher than those of their for­eign com­peti­tors, au­tomak­ers are look­ing to hold the line.

Union Wants a Raise

“These are the first ne­go­ti­a­tions out of the shadow of bank­ruptcy and the first ne­go­ti­a­tions since the 1990s that fol­low a streak of five very prof­itable years,” said Kristin Dz­iczek, lead la­bor an­a­lyst for the Cen­ter for Automotive Re­search in Michigan.

“These are also the first ne­go­ti­a­tions where en­try- level em­ploy­ees mak­ing sec­ond- tier wages will vote in large blocks on the terms of their own em­ploy­ment.”

The union opens ne­go­ti­a­tions with all three com­pa­nies si­mul­ta­ne­ously in mid-July but will pick a so-called “tar­get” com­pany just ahead of a Sept. 15 con­tract ex­pi­ra­tion dead­line. The other two com­pa­nies will be ex­pected to fol­low the pat­tern agree­ment with mod­est changes.

“The UAW helped the en­tire in­dus­try get back on its feet,” union pres­i­dent Dennis Wil­liams said dur­ing a re­cent meet­ing with re­porters at union head­quar­ters in Detroit.

“We’ve been able to achieve some great things in the past few years. As you look around the in­dus­try, we see a lot of new prod­ucts and new pro­cesses that have made these com­pa­nies a lot of money.”

The union wants a raise for the 140,000 union mem­bers cov­ered by the con­tract and is look­ing at dif­fer­ent mod­els for “bridg­ing the gap” in pay be­tween legacy work­ers mak­ing US$30 per hour and new hires who make roughly US$16.50 un­der the cur­rent con­tract.

Au­tomak­ers Want to Cut Costs

Ser­gio Mar­chionne, the bom­bas­tic chief ex­ec­u­tive of Fiat Chrysler Au­to­mo­biles NV, has in­sisted re­peat­edly the in­dus­try needs a new con­tract model. The old one doesn’t work and profit shar­ing and in­cen­tive bonuses should be­come a larger part of the pay pack­age of each worker, Mar­chionne has said.

He is also seek­ing to de­fend a la­bor cost ad­van­tage that comes with hav­ing 43 per­cent of Fiat Chrysler’s U.S. work­ers earn­ing the lower en­try-level wage, nearly dou­ble the per­cent­age of such work­ers at GM and Ford.

GM has mounted some­thing of a charm of­fen­sive ahead of the ne­go­ti­a­tions by an­nounc­ing plans to in­vest US$5.4 bil­lion in plant im­prove­ments and cre­ate hun­dreds of new jobs over the next three years.

“Only through in­no­va­tive prob­lem solv­ing are we go­ing to see suc­cess,” Cathy Clegg, GM North Amer­i­can vice pres­i­dent of man­u­fac­tur­ing and la­bor re­la­tions, said re­cently.

Ford’s ne­go­tia­tors, while wor­ried about ris­ing health care costs, have also avoided mak­ing pro­nounce­ments that might an­tag­o­nize the union.

“Our ap­proach go­ing into the con­tract is to make sure that we have a fair and com­pet­i­tive agree­ment that al­lows us to pro­vide jobs for our peo­ple but will al­lows us to re­main com­pet­i­tive and in­vest here in the U.S.,” Ford chief ex­ec­u­tive Mark Fields said re­cently.

For its part, the union also has said it wants to avoid con­fronta­tion.

Cindy Estrada, the union’s top bar­gainer at GM said this week, “If there is a strike, both of us will have failed.”

Wil­liams, how­ever, said he is pre­pared for the worst and has raised dues to “build up the strike fund.”

“I never go into ne­go­ti­a­tions with­out be­ing pre­pared,” Wil­liams said. “But we be­lieve we can get through col­lec­tive bar­gain­ing with­out a con­fronta­tion. It’s not re­ally on my mind.”

AP

In this May 4, 2005 file photo, a Pon­tiac Vibe sits on the sales lot at Dale Willey GM in Lawrence, Kansas.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.