Twilight Of The UAW

Globalist · 04-04-2006, 10:45 PM

http://yahoo.businessweek.com/magazi...5/b3979092.htm

APRIL 10, 2006

THE WORKPLACE

Twilight Of The UAW
The pressure to make wage and benefit concessions won't go away

For more than two decades, the United Auto Workers has grudgingly allowed Detroit carmakers to slash jobs as they have struggled to keep pace with the onslaught from foreign rivals. That's what UAW President Ron Gettelfinger agreed to when he signed off on General Motors Corp.'s (GM ) buyout of more than 40,000 jobs at the No. 1 carmaker and its former parts unit, bankrupt Delphi Corp. (DPHIQ ). Where the union has always drawn the line is on bedrock issues: wages and benefits for workers and retirees.

This time, though, that line won't hold. GM's buyouts are the beginning, not the end, of the concessions the union will have to make over the next few years. Unless GM and Ford Motor Co. (F ) see miraculous sales rebounds, the UAW at last will have to give ground on pay and health care. Already, Delphi's tough-talking chairman, Robert S. "Steve" Miller Jr., has issued an ultimatum requiring pay cuts of nearly 40% for the remaining 12,000 Delphi workers who can't take GM's offer. If the union continues to refuse, Miller could impose a harsher labor deal in bankruptcy court.

Gettelfinger can't look for relief across town, either. Ford has already announced plans to slash 25,000 jobs and will likely do a buyout deal, too. Similarly, bankrupt auto parts makers -- including Collins & Aikman (CKC ), Dana, and Tower Automotive -- are using the courts to cut pay or close factories. Says a high-level official at another union: "This is a leadership moment for the UAW. We've had to deal with this in steel and airlines; now it's autos' turn."

What's going on is nothing less than the slow death of what was once the country's most powerful industrial union. Despite years of relentless global pressure, the UAW has been able to maintain some of the best blue-collar posts in the U.S. But like lumbering GM itself, the union failed to realize what it would take to compete in a world economy. In the 1980s and 1990s, it fought concessions that would have helped U.S. carmakers fend off imports. The upshot: Like GM and Ford, it's paying the price today.

This year alone, the UAW will lose about 70,000 of its 640,000 members as a result of cuts at Ford, GM, and Delphi, bringing total membership to well under 600,000, vs. 1.5 million in 1980. At the same time, wages at parts makers are plunging and the paid-layoff clause, known in Detroit as the JOBS bank, is certain to be vulnerable when Big Three executives and UAW leaders face off in bargaining next year. Add it all up, and "this is the decline of the UAW," says Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, Mich. "We're in the 21st century. It's over."

The UAW's setbacks highlight a broader challenge faced by blue-collar America. Just as union bargaining muscle helped make the middle class, so too does its weakening signal the stiffer barriers less-skilled workers face in today's globalized economy. Just 52% of households headed by someone with only a high school degree are middle-class in 2003, vs. 68% in 1969, according to the National Center on Education & the Economy in Washington. "There are still opportunities for those without higher education, but they're shrinking every year," says NCEE Senior Fellow Anthony Carnevale.

BRINGING IN BUYOUTS
UAW leaders bristle at the thought that they are losing clout. Gettelfinger told BusinessWeek in an interview last year that "every Labor Day there are stories written that we're going away. But we're still here." True, he does still wield tremendous power over the Big Three. He negotiated buyouts of $35,000 to $140,000 from GM rather than pink slips for workers. GM will fund the estimated $4 billion to $5 billion in total restructuring costs for its plants and those of Delphi by selling off parts of its General Motors Acceptance Corp. (GM ) finance arm and its stakes in Japanese auto companies, which is what Gettelfinger really wanted. And so far, the cuts to health-care benefits still leave his retirees with a better medical deal than most employees have. Nor have hourly workers yet lost ground in health care.

But the UAW's grip on wages and benefits can't last. America's employer-paid medical insurance amounts to an ever-increasing tax on domestic manufacturers trying to compete with foreign rivals based in countries with nationalized health care. Meanwhile, foreign auto makers get state and local tax breaks to build new plants in the U.S. that in some cases amount to five years' worth of their wage bill, says AlixPartners LLC Managing Director John Hoffecker.

CHINESE AUTOS ON THE WAY
There's another buzzsaw coming: cars from China. Every big auto maker is expanding production in the Chinese market, and analysts expect most to start exporting vehicles to the U.S. in a few years. "Chinese cars are coming," says Harvard University economics professor Richard Freeman. "I don't know if the UAW can hold on to its wages and benefits [in the face of that]."

The UAW's prospects look eerily similar to those that once faced another old-line union, the United Steelworkers. In 2002, after decades of relentless battering from global rivals, most U.S. steelmakers were hopelessly uncompetitive. To salvage what was left of the industry, the Steelworkers agreed to cut wages and benefits as well as jobs.

Most dramatically, the union allowed players such as U.S. Steel Corp. (X ) and Bethlehem Steel Corp. -- then headed by none other than Delphi's Miller -- to all but wipe out their legacy costs. The companies ended retiree health plans and used bankruptcy court to dump pension plans onto the federal government, cleaning billions off their books and out of steelworker retirees' pockets.

The UAW appears to be headed down the same path. "We were told by our union that we can expect to see a very different Delphi," says Skip Dziedzic, shop committee chairman of UAW Local 1868 near Milwaukee. "And I think we will." UAW workers can also expect to see a very different auto industry, and because their fortunes are so intertwined, a vastly diminished union.

By David Welch, with Aaron Bernstein in Washington

steverino · 04-04-2006, 10:53 PM

Wow. Gettlefinger might have it worse than Wagoner

Globalist · 04-04-2006, 10:54 PM

UAW won't survive in the long run due to its local nature.

In the meantime, MAD (Mutually Agreed Destruction) will reign like it did during Cold War. There will be no Strike and no confrontation, but UAW will slowly die like did the Soviet Union, unless they are smarter than the Soviets and adopt a Chinese-like startegy--Be open and adapt to the new World.

W.A.F.U. · 04-04-2006, 10:59 PM

Will a person that was making $27 an hour still take the same time and care doing their job when they are making 40% less???

I'm betting no.

Snafu_SS · 04-05-2006, 01:09 AM

Quote:

Originally Posted by W.A.F.U.

Will a person that was making $27 an hour still take the same time and care doing their job when they are making 40% less???

I'm betting no.

thats when a worker is reminded of the fact that (atleast in areas like michigan) there are plenty of other workers that would take this job...just like during the depression.

here in my area, ppl will work for literaly nothing or maybe 6 dollars an hour just for the chance to be hired on full time...but it still could be a problem, but then thats what you get with using humans instead of machines

lilredcrvtt · 04-05-2006, 01:13 AM

Quote:

Originally Posted by W.A.F.U.

Will a person that was making $27 an hour still take the same time and care doing their job when they are making 40% less???

I'm betting no.

I could not agree with you more.

There will be a huge price tag on that kind of a wage cut. This will really get ugly if things move in that kind of heavy handed direction. Mr. Miller and Co. may expect to reap the bittter harvest they have sown.

There is still time for a reasonable resolve, playing hardball with the livelihoods of many hard working men and women is hardly a necessity.

The race to the bottom is not an ejoyable one!

McG · 04-05-2006, 01:26 AM

Quote:

Originally Posted by W.A.F.U.

Will a person that was making $27 an hour still take the same time and care doing their job when they are making 40% less???

I'm betting no.

Or do like Steve Miller did....make it clear that the least productive, lowest quality plants will be the first closed.

C/K Man · 04-05-2006, 01:26 AM

Well, if they don't do a good job, we'll all buy Toyotas, and instead of a 40% pay cut, they'll get 100% pay cut. Not a good position to be in.

CobaltSScrazy · 04-05-2006, 01:47 AM

they WILL DO a GREAT job or risk having no job at all. Many umemployed people and 2/3rd world countries would love to have these high paying factory jobs the uaw has currently. Do the work or get the Trump "You're fired" mantra immediately, its a choice, job w/ less but fair pay for same work or no job at all? Make your pick....

mike's 01ws6 · 04-05-2006, 01:55 AM

Quote:

Originally Posted by CobaltSScrazy

they WILL DO a GREAT job or risk having no job at all. Many umemployed people and 2/3rd world countries would love to have these high paying factory jobs the uaw has currently. Do the work or get the Trump "You're fired" mantra immediately, its a choice, job w/ less but fair pay for same work or no job at all? Make your pick....

If they move the jobs to these countries then they wont be high paying.

**nailhead425** · 04-05-2006, 04:12 AM

Quote:

Originally Posted by C/K Man

Well, if they don't do a good job, we'll all buy Toyotas, and instead of a 40% pay cut, they'll get 100% pay cut. Not a good position to be in.

BINGO! Most of us are guilty for buying stuff at Wal-Mart, Target, or some other discount store. Check those tags. I guess when t-shirts are made in China it isn't a big deal, but when cars are made there, well...the Government needs to be involved.

Voting with your wallet, it is vastly more powerful.

Mikkoo · 04-05-2006, 04:54 AM

The storm clouds are certainly mounting on the UAW. As stated in the
article, their clout once so powerful is diminishing quickly. It will be
very interesting to see how the negotiations go next year.

Buickman · 04-05-2006, 06:16 AM

Walter Reuther once said "You close one plant and we'll close the rest of them". Gettelfinger on the other hand is bought and paid for by Joint Funds. The International Union takes in more from GM than it does from their own membership. Take for example the last VEBA set up by GM. A $1,000,000,000 fund was arranged with a 20% administrative fee going to Solidarity House. You do the math and see why the UAW has no fight, or concern for their own members. Reuther also warned of the danger once Union leaders' income rose above that of the rank and file. The only "Solidarity" I see is between GM management and the "Concession Caucus". Time for America to WAKE UP and realize they are seeing a very well planned rape of the middle class.

Buickman
Founder
www.GeneralWatch.com

Jimm · 04-05-2006, 06:53 AM

"But the UAW's grip on wages and benefits can't last. America's employer-paid medical insurance amounts to an ever-increasing tax on domestic manufacturers trying to compete with foreign rivals based in countries with nationalized health care. Meanwhile, foreign auto makers get state and local tax breaks to build new plants in the U.S. that in some cases amount to five years' worth of their wage bill, says AlixPartners LLC Managing Director John Hoffecker."

Maybe it's time for the Congress to quit suckine the AMA teat and do something about the cost of medical care. Don't yell "malpractice" either. That dog won't hunt any more. When a hospital room costs $10K per day, it's time to spank some greedmeisters.

ponchoman49 · 04-05-2006, 08:12 AM

I will be so glad when all this crap is behind us. I want to come on here and read about exciting car news not doom and gloom/UAW crap or GM sucks and Asian cars are superior! Geesh

04-04-2006, 10:45 PM	#1 (permalink)
Globalist 5.3 Liter Vortec V8 Join Date: Dec 2004 Drives: V6 3.2 L Posts: 1,252	Twilight Of The UAW http://yahoo.businessweek.com/magazi...5/b3979092.htm APRIL 10, 2006 THE WORKPLACE Twilight Of The UAW The pressure to make wage and benefit concessions won't go away For more than two decades, the United Auto Workers has grudgingly allowed Detroit carmakers to slash jobs as they have struggled to keep pace with the onslaught from foreign rivals. That's what UAW President Ron Gettelfinger agreed to when he signed off on General Motors Corp.'s (GM ) buyout of more than 40,000 jobs at the No. 1 carmaker and its former parts unit, bankrupt Delphi Corp. (DPHIQ ). Where the union has always drawn the line is on bedrock issues: wages and benefits for workers and retirees. This time, though, that line won't hold. GM's buyouts are the beginning, not the end, of the concessions the union will have to make over the next few years. Unless GM and Ford Motor Co. (F ) see miraculous sales rebounds, the UAW at last will have to give ground on pay and health care. Already, Delphi's tough-talking chairman, Robert S. "Steve" Miller Jr., has issued an ultimatum requiring pay cuts of nearly 40% for the remaining 12,000 Delphi workers who can't take GM's offer. If the union continues to refuse, Miller could impose a harsher labor deal in bankruptcy court. Gettelfinger can't look for relief across town, either. Ford has already announced plans to slash 25,000 jobs and will likely do a buyout deal, too. Similarly, bankrupt auto parts makers -- including Collins & Aikman (CKC ), Dana, and Tower Automotive -- are using the courts to cut pay or close factories. Says a high-level official at another union: "This is a leadership moment for the UAW. We've had to deal with this in steel and airlines; now it's autos' turn." What's going on is nothing less than the slow death of what was once the country's most powerful industrial union. Despite years of relentless global pressure, the UAW has been able to maintain some of the best blue-collar posts in the U.S. But like lumbering GM itself, the union failed to realize what it would take to compete in a world economy. In the 1980s and 1990s, it fought concessions that would have helped U.S. carmakers fend off imports. The upshot: Like GM and Ford, it's paying the price today. This year alone, the UAW will lose about 70,000 of its 640,000 members as a result of cuts at Ford, GM, and Delphi, bringing total membership to well under 600,000, vs. 1.5 million in 1980. At the same time, wages at parts makers are plunging and the paid-layoff clause, known in Detroit as the JOBS bank, is certain to be vulnerable when Big Three executives and UAW leaders face off in bargaining next year. Add it all up, and "this is the decline of the UAW," says Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, Mich. "We're in the 21st century. It's over." The UAW's setbacks highlight a broader challenge faced by blue-collar America. Just as union bargaining muscle helped make the middle class, so too does its weakening signal the stiffer barriers less-skilled workers face in today's globalized economy. Just 52% of households headed by someone with only a high school degree are middle-class in 2003, vs. 68% in 1969, according to the National Center on Education & the Economy in Washington. "There are still opportunities for those without higher education, but they're shrinking every year," says NCEE Senior Fellow Anthony Carnevale. BRINGING IN BUYOUTS UAW leaders bristle at the thought that they are losing clout. Gettelfinger told BusinessWeek in an interview last year that "every Labor Day there are stories written that we're going away. But we're still here." True, he does still wield tremendous power over the Big Three. He negotiated buyouts of $35,000 to $140,000 from GM rather than pink slips for workers. GM will fund the estimated $4 billion to $5 billion in total restructuring costs for its plants and those of Delphi by selling off parts of its General Motors Acceptance Corp. (GM ) finance arm and its stakes in Japanese auto companies, which is what Gettelfinger really wanted. And so far, the cuts to health-care benefits still leave his retirees with a better medical deal than most employees have. Nor have hourly workers yet lost ground in health care. But the UAW's grip on wages and benefits can't last. America's employer-paid medical insurance amounts to an ever-increasing tax on domestic manufacturers trying to compete with foreign rivals based in countries with nationalized health care. Meanwhile, foreign auto makers get state and local tax breaks to build new plants in the U.S. that in some cases amount to five years' worth of their wage bill, says AlixPartners LLC Managing Director John Hoffecker. CHINESE AUTOS ON THE WAY There's another buzzsaw coming: cars from China. Every big auto maker is expanding production in the Chinese market, and analysts expect most to start exporting vehicles to the U.S. in a few years. "Chinese cars are coming," says Harvard University economics professor Richard Freeman. "I don't know if the UAW can hold on to its wages and benefits [in the face of that]." The UAW's prospects look eerily similar to those that once faced another old-line union, the United Steelworkers. In 2002, after decades of relentless battering from global rivals, most U.S. steelmakers were hopelessly uncompetitive. To salvage what was left of the industry, the Steelworkers agreed to cut wages and benefits as well as jobs. Most dramatically, the union allowed players such as U.S. Steel Corp. (X ) and Bethlehem Steel Corp. -- then headed by none other than Delphi's Miller -- to all but wipe out their legacy costs. The companies ended retiree health plans and used bankruptcy court to dump pension plans onto the federal government, cleaning billions off their books and out of steelworker retirees' pockets. The UAW appears to be headed down the same path. "We were told by our union that we can expect to see a very different Delphi," says Skip Dziedzic, shop committee chairman of UAW Local 1868 near Milwaukee. "And I think we will." UAW workers can also expect to see a very different auto industry, and because their fortunes are so intertwined, a vastly diminished union. By David Welch, with Aaron Bernstein in Washington

04-04-2006, 10:53 PM	#2 (permalink)
steverino 6.2 Liter Vortec V8 Join Date: Oct 2005 Location: on a golf course somewhere in US Drives: 2007 Impala SS Posts: 2,874	Re: Twilight Of The UAW Wow. Gettlefinger might have it worse than Wagoner __________________ What, Me worry - Alfred E. Neuman

04-04-2006, 10:54 PM	#3 (permalink)
Globalist 5.3 Liter Vortec V8 Join Date: Dec 2004 Drives: V6 3.2 L Posts: 1,252	Re: Twilight Of The UAW UAW won't survive in the long run due to its local nature. In the meantime, MAD (Mutually Agreed Destruction) will reign like it did during Cold War. There will be no Strike and no confrontation, but UAW will slowly die like did the Soviet Union, unless they are smarter than the Soviets and adopt a Chinese-like startegy--Be open and adapt to the new World.

04-04-2006, 10:59 PM	#4 (permalink)
W.A.F.U. 3.6 Liter V6 Join Date: Sep 2004 Location: Canada Drives: 2006 Pontiac G5 GT. Posts: 1,097	Re: Twilight Of The UAW Will a person that was making $27 an hour still take the same time and care doing their job when they are making 40% less??? I'm betting no.

04-05-2006, 01:26 AM	#8 (permalink)
C/K Man 3.8 Liter V6 Join Date: Feb 2003 Posts: 367	Re: Twilight Of The UAW Well, if they don't do a good job, we'll all buy Toyotas, and instead of a 40% pay cut, they'll get 100% pay cut. Not a good position to be in.

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04-05-2006, 01:47 AM	#9 (permalink)
CobaltSScrazy 7.0 Liter LS7 V8 Join Date: Oct 2005 Drives: 2005 Cobalt SS Posts: 5,917	Re: Twilight Of The UAW they WILL DO a GREAT job or risk having no job at all. Many umemployed people and 2/3rd world countries would love to have these high paying factory jobs the uaw has currently. Do the work or get the Trump "You're fired" mantra immediately, its a choice, job w/ less but fair pay for same work or no job at all? Make your pick.... __________________ 2005 Cobalt SS I'm done with GMI, some posters type inexcusable and unacceptable replys that are not moderated with enough intensity.

04-05-2006, 04:54 AM	#12 (permalink)
Mikkoo 6.0 Liter Vortec V8 Join Date: Feb 2003 Location: An American living in Finland Posts: 1,783	Re: Twilight Of The UAW The storm clouds are certainly mounting on the UAW. As stated in the article, their clout once so powerful is diminishing quickly. It will be very interesting to see how the negotiations go next year. __________________ Previously owned Camaro's ; 1971 1973 RS 1977 Z28 1980 Z28 1982 Z28 1998 2000 Z28 Previously owned Corvette; 1988 Future ride; 2008 Corvette. 6spd manual, with Jetstream blue metallic paint.

04-05-2006, 06:16 AM	#13 (permalink)
Buickman 6.0 Liter Vortec V8 Join Date: May 2005 Location: Flint MI Drives: 08 Enclave Posts: 1,894	Re: Twilight Of The UAW Walter Reuther once said "You close one plant and we'll close the rest of them". Gettelfinger on the other hand is bought and paid for by Joint Funds. The International Union takes in more from GM than it does from their own membership. Take for example the last VEBA set up by GM. A $1,000,000,000 fund was arranged with a 20% administrative fee going to Solidarity House. You do the math and see why the UAW has no fight, or concern for their own members. Reuther also warned of the danger once Union leaders' income rose above that of the rank and file. The only "Solidarity" I see is between GM management and the "Concession Caucus". Time for America to WAKE UP and realize they are seeing a very well planned rape of the middle class. Buickman Founder www.GeneralWatch.com

04-05-2006, 06:53 AM	#14 (permalink)
Jimm 3.5 Liter V6 Join Date: Apr 2004 Location: Texas City, Texas Drives: 1999 Z-28 1992 Z-28 1956 210 Sedan Posts: 231	Re: Twilight Of The UAW "But the UAW's grip on wages and benefits can't last. America's employer-paid medical insurance amounts to an ever-increasing tax on domestic manufacturers trying to compete with foreign rivals based in countries with nationalized health care. Meanwhile, foreign auto makers get state and local tax breaks to build new plants in the U.S. that in some cases amount to five years' worth of their wage bill, says AlixPartners LLC Managing Director John Hoffecker." Maybe it's time for the Congress to quit suckine the AMA teat and do something about the cost of medical care. Don't yell "malpractice" either. That dog won't hunt any more. When a hospital room costs $10K per day, it's time to spank some greedmeisters. Last edited by Jimm : 04-05-2006 at 08:13 PM.

04-05-2006, 08:12 AM	#15 (permalink)
ponchoman49 4.4 Liter Supercharged Northstar Join Date: Feb 2003 Posts: 2,242	Re: Twilight Of The UAW I will be so glad when all this crap is behind us. I want to come on here and read about exciting car news not doom and gloom/UAW crap or GM sucks and Asian cars are superior! Geesh

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