Detroit Free Press
As auto executives watch and wait, UAW leaders are working to strategically decide which company to target for contract negotiations that will directly impact the lives of 148,661 hourly workers – and smart money at the moment is on Ford.
No decisions have been made yet. The announcement is expected around Labor Day, less than two weeks before expiration of the UAW’s contracts with Ford, General Motors and Fiat Chrysler Automobiles.
“Everybody wants to know who’s going first, everybody,” said a key player at one of the auto companies. “Going first means you control your destiny. But it also means you have a target on your back.”
Half a dozen interviews with industry and union sources close to negotiations suggest the union’s relationship with Ford is widely viewed as the most stable and least contentious. Union negotiators consider Ford a good-faith partner in what is, at best, a brutal collective bargaining process that will include fights over steep health-care costs, hourly wage increases, the use of temporary workers, and shrinking an eight-year “grow-in” period required for full-time workers to reach top wages.
“We think Ford would be the best deal,” said one veteran UAW member. “The most anger is with GM, which is making a ton of money and still Mary Barra is trying to close plants. Our country bailed out GM during the bankruptcy. I mean, why can’t they build the Chevy Blazer in Poletown? Mexico didn’t bail out GM, we did.”
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‘Living on $250 a week’
Sources close to the UAW say if labor leaders can find agreement with Ford and establish a baseline that can be force-fed to other companies, known as “pattern” bargaining, then workers will assess whether a strike on one or all of the Detroit Three would be effective.
No UAW member wants to support a family on the strike wage of $250 a week, yet workers are telling local leaders they are already making advance payments on bills and budgeting for hardship in preparation for the worst. Younger union members say they help companies make money and they’ve been disrespected by GM as it continues to show strong profits. The union maintains GM violated the contract by closing or idling factories during the the life of the current contract.
High alert, disruption
It would be prudent for GM to be on high alert for disruption and punishment, said Harley Shaiken, a University of California at Berkeley professor who talks frequently with labor and industry leaders as a national analyst. “Of all the vehicles that Mexico exports to the U.S., GM builds the largest number, some of which are the most profitable – pickups and SUVs.”
A strike is possible but not inevitable, he said. “Ford has the advantage that its relationships are probably better. And, historically, Ford has been open to new approaches.”
Securing key elements in talks with Ford would give union leaders the freedom to get tough with GM, sources said. Quite a few Fiat Chrysler workers who build the popular Jeep and Ram vehicles say they are unified when discussing strike options on the Detroit Three.
‘If not now, when?’
“Ford knows it’s going into tough economic times with slower sales and global slowdowns. But the union is aware of how profitable Ford is now. So, if not now, when?” Shaiken said.
Ford builds more vehicles in the United States and employs more U.S. hourly employees than any other automaker. Also, more than 80% of the vehicles that Ford sells in the United States are built here.
At issue in this round of negotiations is that workers are angry, and they’re trying to figure out how to best channel that anger constructively. Their view is that workers took cuts when the companies were in trouble a decade ago, and they still haven’t recovered financially. Yet executive pay packages have grown steadily by the millions, workers say.
Rich and fearful
“I mean, we were asked to sacrifice when things were bad and now we’re asked to sacrifice when the companies are making billions because things could go bad later,” said a frustrated UAW member involved in contract talks.
“Workers sacrifice again and again,” this worker said. “This is the first year that the companies are projecting problems so they get pity at the table. They have problems, they want help. Now, in this new world, you can be flush with cash but you think you might have a problem.”
In 2015, the UAW started with Fiat Chrysler and then went to General Motors and Ford. Since then, Fiat Chrysler negotiators have gone to prison as part of a massive bribery scheme that led to the conviction of former union leaders.
Both Fiat Chrysler and UAW officials maintain the scandal didn’t impact negotiations. Workers say they aren’t so sure.
The way it works, labor contracts are automatically extended while companies wait their turn. That’s another reason why going first can be uncomfortable. The battles play out in the spotlight while competitors sit back and watch.
The current four-year contract expires at midnight Sept. 14.
No question, every person interviewed said GM will be targeted for a strike. By closing its Lordstown, Ohio, assembly plant, along with transmission plants in Warren and Baltimore, and setting Detroit-Hamtramck to idle, GM has left workers feeling that the company is unappreciative and unwilling to treat workers fairly in good times. Closure may be a reality, but communication is essential, workers said.
Currently, Fiat Chrysler is valued at $25.67 billion, Ford is valued at $37 billion and GM is valued at $55.89 billion.
Labor organizers said no one is interested in bleeding the companies, because Detroit Three workers share in the profits, so everyone wins if the company does well. But slashing worker benefits while adding perks for executives who earn eight-figure salary packages gets UAW workers’ attention.
“Things are going really well now,” a UAW source said. “It’s time to share.”
For the automakers, health care costs are a huge issue. “You’ll find that autoworkers pay about 3% of their cost of health care, while a typical employee is paying 29%. That cost difference puts the company in a difficult situation,” said Marick Masters, a business professor at Wayne State University with expertise in labor affairs.
Companies that don’t go first are essentially negotiating against themselves. They can tweak the pattern set but can’t create new language.
The UAW is officially called the United Automobile, Aerospace, and Agricultural Implement Workers of America. All member dues feed the strike fund. The UAW represents more than 400,000 active members in North America who work in everything from casino gaming to beer production to higher education.
Despite a diverse membership, the UAW is known for its autoworkers.
“The union wants the company most amenable to accepting its core goals, and companies often prefer being the target because it allows them to craft a contract that more suits their own needs rather than those of its competitors,” Shaiken said. “Many senior workers feel they gave up much when the industry collapsed and want a fair share today when it is profitable. Many younger workers have never experienced a set of negotiations or a strike.”
Anxiety is very real this year, sources say.
No automaker is in the clear. The union workers may strike Ford or Fiat Chrysler for the overall package and then target GM over proposed plant closures, Shaiken said.
Meanwhile, optics matter. When executives and union leaders met to shake hands to launch the contract period, they were all kept in separate rooms. Last cycle, FCA CEO Sergio Marchionne hugged then-UAW president Dennis Williams. And members say they look back at that body language and wonder if they won a fair deal.
“Now you’ve got a moment where the industry is very profitable in the wake of a collapse of an industry, where two went bankrupt and one was teetering,” Shaiken said. “Today, there’s a pretty big divide, but it is bridgeable. The whole genius to pattern bargaining is the strike would only take place at one company.”
‘A hollow promise’
Political leaders will be watching closely to see how things unfold in the Motor City.
“The current president was elected by saying he and only he could deliver on jobs for autoworkers. That is proving to be a hollow promise,” Shaiken said. “Despite the rhetoric of President Trump, no jobs have really come back. He told Lordstown workers, ‘Don’t sell your house.’ That was pretty strong. He told Michigan workers, where he won the state by 10,000 votes, ‘I’m going to deal with this.’ The irony would be if the UAW wins something on plant closures, it would have national political significance. It would show, if you want job security, the route is collective bargaining.”
Contact Phoebe Wall Howard: 313-222-6512 or email@example.com. Follow her on Twitter @phoebesaid. Read more on Ford and sign up for our autos newsletter.