Historic UAW contracts forged from angry words, picket lines, harsh reality

[nadepalma]

This article is LONG, but it certainly worth a read. I have to say, I'm glad that the overall sentiment with the Domesetics and the UAW is positive -- but the way the UAW conducted some of this really gets under my skin. I know they have to do things for "political" reasons, but certainly GM nearly coming to an agreement with the UAW (according to this article at least) and then pulling a strike anyway when they were so close just seems wrong to me. It kind of reminds me of Peter DeLorenzo's thoughts some time back that the Union's can't use the same tried and tired tactics of decades gone by if they expect to sell the idea of "we've change, we're cooperative", etc.

Regardless of my thoughts, take a look:

SOURCE: Detroit News

Originally Posted by DetroitNews

Friday, November 16, 2007
Detroit News special report
Historic UAW contracts forged from angry words, picket lines, harsh reality
Bill Vlasic and Sharon Terlep / The Detroit News

After 10 straight days of hard bargaining, the team from General Motors Corp. felt confident on Sunday, Sept. 23, that a deal was nearly done on a new, four-year contract with the United Auto Workers.

But Ron Gettelfinger had other ideas.

Late in the evening, the UAW president burst into the seventh-floor conference room at the UAW-GM Center for Human Resources in Detroit and shattered the notion that an agreement was imminent.

"You guys think you're making so much progress. But I don't think we're getting a final agreement," Gettelfinger said, according to people familiar with the situation. "We're going to set a strike deadline."

And at 11 a.m. Monday, Sept. 24, more than 73,000 GM workers walked off the job in what would prove to be a pivotal event in the historic 2007 auto talks.

The national strike immediately injected a sense of urgency and high drama into the marathon talks between GM and the UAW.

Within two days, the two sides had finalized a landmark contract that created a health care trust for UAW retirees, instituted a precedent-setting two-tier wage system for hourly workers, and provided iron-clad job guarantees at GM factories across the nation.

Yet the contract was more than just another labor agreement between the largest U.S. automaker and its union.

The GM-UAW deal, followed by similar pacts between the union and Ford Motor Co. and Chrysler LLC, promises to alter the competitive landscape of the American auto industry, possibly for decades to come.

After struggling under a labor cost gap with Japanese automakers of up to $30-an-hour, Detroit's beleaguered Big Three now have a chance to compete without the burden of spiraling medical bills and high-wage, non-core manufacturing jobs.

For the shrinking membership of the UAW, the contracts provide unprecedented commitments that new products will be built in U.S. factories rather than Mexico, South America or China.

With UAW members completing their ratification vote on Tuesday at Ford, the watershed contracts are in the books -- a full two months after the previous four-year agreements expired on Sept. 14.

In a series of interviews with key players at the companies and the union, The Detroit News has reconstructed events leading to the agreements. Participants agreed to discuss the talks on the condition of anonymity.

Progress slow over summer
The ceremonial handshakes between UAW and company officials took place in July, but progress on the major issues of health care and job security was minimal during the summer.

GM and Ford actively sought to be the lead company in the negotiations. But throughout July and August, Gettelfinger gave little indication that he would pick one over the other.

GM Chairman Rick Wagoner had already staked out a leadership role in the Big Three's epic restructuring.

In the fall of 2005, GM had negotiated health care concessions from the UAW that shifted some medical costs onto retirees. Ford later got the same agreement. GM also led the way on offering buyout and early-retirement programs to slash its hourly work force.

Wagoner had privately told GM officials that the 2007 contract talks were essential to fixing the company without resorting to drastic measures such as bankruptcy or a sale to private investors.

"We can do this on our own," Wagoner told company insiders. "We don't need the courts, we don't need outsiders. We can figure this out."

On Sept. 13, GM got the opportunity to control its own destiny.

That day, Cal Rapson, the head of the UAW's GM division, told company officials that Gettelfinger wanted to see Troy Clarke, president of the automaker's North American operations.

In a tense meeting, Gettelfinger laid out the union's stance on the tough talks to come. "We're going to negotiate hard," he told Clarke. "We're not going to bend over backwards."

Clarke showed little emotion, and repeatedly stated that GM needed to dramatically close the cost gap with Toyota Motor Corp. "We've got this problem," he said.

Later that day, the UAW informed its membership that GM would be the "strike target." A few GM officials warily noted that "strike target" sounded far different than "lead company."

With the contract set to expire at 11:59 p.m. on Sept. 14, the UAW granted Ford and Chrysler open-ended extensions. GM's contract, the union said, would be extended on an hour-by-hour basis.

The central issue before the negotiators was never in doubt.

GM was pushing hard for the creation of a union-run trust -- a Voluntary Employees' Beneficiary Association, or VEBA -- to finance $47 billion in future health care obligations for 340,000 GM retirees and surviving spouses.

Gettelfinger, in fact, had supported the idea of a VEBA ever since the 2005 health care talks. But the challenge was how to fund the trust to cover unforeseen increases in medical coverage.

The sides staked out widely divergent positions.

GM, at first, proposed putting up cash and stock totaling 50 percent of the overall health care obligation. The union wanted 100-percent funding.

Bridging the huge gulf would take days of painstaking talks. The union relied heavily on experts from investment banking giant Lazard Ltd. GM's strategy was driven almost exclusively by Chief Financial Officer Fritz Henderson.

While the VEBA talks went on, subcommittees tackled equally sensitive topics such as lower wages for noncore jobs in GM factories, transfer policies for laid-off workers, and the placement of new vehicle programs in specific assembly plants.

Gettelfinger had lead role
Dozens of people played roles in the talks, but the central figure was always, unquestionably Gettelfinger.

The UAW president, 63, was an enigma to many on the GM side. During much of the talks, he sat secluded at a computer in a spare office in the Center for Human Resources.

He often slept there overnight, refusing a pillow offered him by GM employees. Instead, he used a plastic bag stuffed with shredded documents from the negotiation sessions.

But both sides knew instantly when Gettelfinger was engaged. On one occasion, Rapson hinted that his UAW boss wanted to turn up the heat at the table. "I'm supposed to be mad at you today," Rapson told the GM team.

In fact, Gettelfinger was playing for high stakes. As badly as GM wanted the VEBA, the union wanted rock-solid guarantees that GM would keep its U.S. assembly plants churning out new vehicles into 2011 and beyond.

On Sept. 18, the talks seemed at an impasse when Gettelfinger declared the VEBA was "off the table." GM's lead negotiator, Diana Tremblay, then presented what company officials dubbed "plan B" -- a series of deep cuts to union wages and drastic hikes in health care bills for active workers.

The confrontation put the talks back on track. By Friday, Sept. 21, the framework for the agreement on product plans had been set. And by Sunday, the VEBA funding seemed settled at roughly 68 percent of GM's total obligation.

Then Gettelfinger shocked GM by setting his strike deadline.

GM officials were baffled when the UAW bargainers left the table just before 11 a.m. Monday, Sept. 24. Meanwhile, television camera crews were capturing the spectacle live of tens of thousands of GM workers walking off the job at plants across the United States.

In a dramatic press conference at UAW headquarters in Detroit, Gettelfinger accused GM of ignoring the union's deadline for a deal.

"Nobody wants a strike," he said. "But there comes a time when somebody pushes you off a cliff and that's exactly what happened."

But this was no ordinary strike. By 2 p.m., both sides had returned to the table. One insider called the pace "frenetic," as negotiators plowed through the key points of the contract in a 40-hour session. Several outstanding issues were locked up, including the final details of which plants would receive which future products.

At 3:05 a.m. on Sept. 26, Gettelfinger said the deal was done and the strike was over.

"We feel very good about this tentative agreement," he said. "I think the strike helped our side more than theirs."

Then it was Chrysler's turn
While the GM contract moved to a series of ratification votes by workers, the question hovering over the industry was who came next -- Ford or Chrysler?

On Oct. 5, Gettelfinger gave the answer by showing up at Chrysler headquarters in Auburn Hills ready to negotiate.

Chrysler promised to be a wild card in the talks. The smallest of the Detroit automakers, Chrysler had been sold in August by its German parent, Daimler AG, to the secretive private-equity firm Cerberus Capital Management LP.

MUCH MORE HERE

[tgagneguam]

"We can do this on our own," Wagoner told company insiders. "We don't need the courts, we don't need outsiders. We can figure this out."

I absolutely believe that all of Detroit can prosper pretty much without the help of outsiders. In fact, I think that looking for external help to address mostly internal concerns would detract from a turnaround. Usually it's the tough things we face in life that make us stronger. That sentiment also explains why I have little patience when Detroit-and its fans-go into whining mode about all of the reasons why Detroit cannot succeed.

Overall, I think Detroit and the UAW should be pleased with what they achieved together.

He often slept there overnight, refusing a pillow offered him by GM employees. Instead, he used a plastic bag stuffed with shredded documents from the negotiation sessions.

Certainly a tenacious fellow, and it certainly sends a message.

[dmaxpwr]

thats a interesting read...definitely gives hope for the future of the big 3

[DuSpinnst]

Good article, just read it in the newspaper while eating lunch (I have today off, thanks UAW).

[vanshmack]

This sounds like a Gettelfinger fluff piece. Like they want to show the rank-and-file how hard he worked to get them this deal.

He still sounds like an a$$.

[Smoke]

Originally Posted by vanshmack

He still sounds like an a$$.

He is an ass!

[steverino]

Originally Posted by vanshmack

This sounds like a Gettelfinger fluff piece. Like they want to show the rank-and-file how hard he worked to get them this deal.

He still sounds like an a$$.

yeah, the show of force with Chryslerberus was a real laugher and still calling it a pattern contract is a joke, different percentages for VEBA, different definitions of non-core workers with Ford getting 20% replacement at lower wages, different job bank requirements, like where's the PATTERN.

On Sept. 18, the talks seemed at an impasse when Gettelfinger declared the VEBA was "off the table." GM's lead negotiator, Diana Tremblay, then presented what company officials dubbed "plan B" -- a series of deep cuts to union wages and drastic hikes in health care bills for active workers.

The confrontation put the talks back on track.

I think Tremblay made Gettlefinger blink first

[regfootball]

gettlefinger, i wonder if he used this thespian talents to add any more drama to the pillow of shredded papers bit. jees, let's strip al gore of the oscar and give it to gettlefinger.

[SDRacing]

"As badly as GM wanted the VEBA, the union wanted rock-solid guarantees that GM would keep its U.S. assembly plants churning out new vehicles into 2011 and beyond."

[sigma]

Originally Posted by SDRacing

"As badly as GM wanted the VEBA, the union wanted rock-solid guarantees that GM would keep its U.S. assembly plants churning out new vehicles into 2011 and beyond."

And to me that seems like a fair trade. The Union can't go back to its membership with nothing. It has to show that in exchange for all of these concessions they would get something, and in this case they were able to receive job guarantees for most of their employees.

[funkypunnk]

If I were GM I would shutter everything that I legally could until the UAW "patterns" my contract after Ford's or Chrysler's. Put enough lemmings out of work and maybe they will stop supporting their overpaid windbag leadership. I said it before, the UAW is bad for the U.S. and for their membership.

[gardnet1]

GM should have dropped the $39 billion charge before negotiations or at least mentioned it was coming to get better terms.

GM will still probably be the best off in 3 years. The Malibu, Volt, new round of upgrades at Cadillac, G8, more Euro-Saturns and eventually a six speed for the GMT-900s. Once the housing market sorts itself out GM will be rollin!

Chrysler will be a lot smaller and more profitable but they have some big time restructuring charges ahead, especially if they really go after reducing their dealer network. As they reduce models, GM and Ford will gain most of these conquests (Durango, Aspen, PT Cruiser, Avenger). Other than Journey and a refresh for Ram what does Chrysler have in the pipeline?

Ford has a lot of momentum right now with the new contract and far better terms, upcoming buyouts with 2nd tier replacements, Jag & L-R almost off the books, and good publicity from quality and safety assessments. They also have some B-segment cars coming over, twin-force fuel sippers and flex.

[OKsweetrides]

Definitely a fluff piece.

This was pretty keen by the tone of the article, and the lack of encompassing the broader economic impacts.

GM is in good condition, but there is room for improvement next round of talks.

Chrysler however, will be interesting to watch; will they prepping for a sale again? will they attempt to bust the union(watching behavior at Ford and GM and compare their conditions) ?

Ford is in the worst shape of all.

I just hope that when renegotiations come again, that Chrysler will show its hand in a manner consistent with growth and global understanding.

[mkaake]

"We feel very good about this tentative agreement," he said. "I think the strike helped our side more than theirs."

Why does it always have to be looked at like this? I know it makes for good print to show the rank and file, but isn't this a perfect example of the attitude that needs to *stop*?