Scandal, weak car sales mean tough contract talks
Detroit carmakers and the United Auto Workers faced a challenging backdrop to contract talks even before prosecutors escalated a corruption probe of the union in recent days. Uncertainties surrounding US trade policy and fuel economy rules have clouded the industry’s outlook for months, while residual anger over plant closures has deepened worker suspicions of management as the US economy shows signs of slowing. But rank-and-file workers — who must ratify any contract agreement — are also feeling sceptical of union management.
On August 28, less than three weeks before the four-year UAW contract with General Motors, Ford and Fiat Chrysler Automobiles (FCA) expires, the FBI raided the home of UAW President Gary Jones. Then, former union official Michael Grimes pleaded guilty to charges of taking bribes from vendors connected to a training fund, the ninth guilty plea in the long-running US criminal investigation.
The scandal has boosted the already elevated odds of a strike, labour experts say.
“It makes it much more difficult to get it ratified,” said Arthur Wheaton, an expert in industrial labour relations at Cornell University, who thinks the odds of a strike are especially high at GM and FCA. Talks began in July to replace a four-year contract that expires September 14. Besides a strike or new contract, the two sides could agree to temporarily extend the contract.
The automakers’ contracts, negotiated in three separate rounds, are usually similar but not identical.
GM said that it hopes for “an agreement that builds a strong future for our employees and our business.” The UAW, for its part, won overwhelming support from all three workforces to authorise a strike if necessary.
“We are ready to stand strong for our future,” Jones said in a statement. “We are focused. We are prepared and we are all ready to stand up for our members, our communities and our manufacturing future.” The list of unpredictables includes the limbo state of a revamped North American Free Trade Agreement, a burgeoning fight between California and the Trump administration over fuel economy rules, and the volatile, wild-card role of President Donald Trump, who has not been shy about going after companies or union officials on Twitter.
“There’s a ton of uncertainty,” said Kristin Dziczek, vice-president of industry, labour and economics at the Center for Automotive Research in Michigan. She sees a higher chance of a strike than in past contract talks.“we don’t know the rules of trade in North America yet, we don’t know the fuel economy regulations,” she added. “These are huge things.”