The WSJ gets a little closer to the truth about the UAW’s incredible disappearing transplant organizing campaign, reporting

On Tuesday, UAW leaders meeting here described plans to reach out to foreign unions and consumers in what would be their first major campaign since failed efforts in the last decade at Nissan Motor Co. and auto-parts supplier Denso Corp. They hope to be more successful by reaching out to foreign unions at the auto makers’ overseas plants and bringing pressure from prayer vigils, fasts or protests at dealerships.

A person familiar with the matter said the union is now planning to target one foreign auto maker and has narrowed its list to three or four companies. Inside the union, much of the talk centers on targeting the now-struggling Japanese auto maker Toyota or Korea’s Hyundai, this person said.

The UAW has set aside tens of millions of dollars from its strike fund to bankroll its campaign. International actions are to be coordinated with foreign unions and run by some three dozen student interns recruited globally, UAW officials said. When the interns return to their home countries after learning about the UAW efforts in the U.S., they’ll be expected to organize protests against the auto maker, UAW officials said.

OK, so it’s a little bit strange that the UAW is entrusting a campaign that UAW President Bob King calls “the single most important thing we can do for our members ” to a bunch of interns. Still, with “tens of millions of dollars” allocated towards the campaign, some automaker somewhere will be feeling the union’s hot breath on its neck in due course. So, which automaker will the UAW target? Which automaker should they target? And with the UAW apparently refusing to fight the two-tier wage structure, will any transplant or foreign workforce want to join up?

Though things have been quiet enough to make us wonder whether or not the UAW’s effort to organize America’s transplant auto factories is still on or not, the UAW’s Bob King confirms to Automotive News [sub] that the war is still on. King insists that forthcoming contract negotiations with the Detroit Three aren’t a distraction from the transplant organizing campaign, saying

Everything is moving forward.

But King isn’t ready to disclose any results from the organizing campaign, refusing to share any of the automaker responses to his organizing principles. We’re guessing that’s because they sent roughly the same response as Honda. Meanwhile, King still says the UAW will assimilate “at least one” transplant, but still refuses to identify the maker. Our guess is that King will organize a “Mission Accomplished” moment at NUMMI, the sewer into which all of the UAW’s contradictions flow. Though best known as a Toyota plant (in large part due to the UAW’s misleading protests against the Japanese automaker there), NUMMI has always been a union shop, and its new owner, Tesla, hardly qualifies as a “transplant.” In fact, such a move would come up short of even replacing the union jobs that were lost at NUMMI when GM pulled out of the joint venture during bankruptcy. If NUMMI is to be the UAW’s “victory” it will prove simply that the incredible shrinking union considers barely treading water a “victory.” Surprised?

With its effort to organize transplant manufacturers stalled, the UAW is turning all of its attention to what may be one of its toughest contract negotiations ever. The union’s rank-and-file is pushing hard to take back concessions given during the bailout, but at the same time, the union has to avoid burdening the recovering US automakers with competitive disadvantages. And because the three Detroit automakers have performed so differently over the last year (Ford made a $6.6b profit last year, GM made $4.7b and Chrysler lost $652m), the tradition of pattern bargaining will only make negotiations even tougher. But it’s huge bonuses for executives at Ford that is getting the war of words started early, as Bill Johnson, plant chairman for UAW Local 900, threatens

If they don’t restore everything (we) gave up, the membership is going to knock it down. The bonuses that were just announced are just ridiculous.

And that’s a good place for the UAW to begin negotiations, but they’re realistically not going to get everything back. So how is this going to play out?
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Do you recall the UAW’s last-ditch bid for relevance, its campaign to organize the transplant auto factory workers of America? The union’s campaign against the Hondas, Toyotas, BMWs and Hyundais of the world was supposed to begin in earnest in January, but all they have to show for it thus far is a perfunctory slap-down from Honda. So what happened? Where’s the confrontation, the picketing, the accusations of human rights abuses? Remember, the UAW has all of its skin in this gambit, now that its President has confirmed that

If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW.

But based on the dearth of media reports on either the campaign’s success or failure, it would seem that the UAW has given up on the effort and is hoping everyone just forgets about it…

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Bloomberg reports

GM plans to pay bonuses to most managers equal to 15 percent to 20 percent of their annual salary and as high as 50 percent to less than 1 percent of its 26,000 U.S. salaried employees, said one of the people, who asked not to be named revealing internal plans. Bonuses for Chrysler’s 10,755 salaried workers will average about $10,000, with a small group getting as much as half of their salary, one of the people said.

And with GM and Chrysler heading into contract negotiations with the UAW, this is not going to be winning the manufacturers many friends among the union.

“The union is going to be very angry about this,” Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts, said in an interview yesterday. “If these kinds of bonuses are paid to salaried workers, then the union’s demands will increase, knowing management can’t claim an inability to pay.”

But wait, isn’t GM giving hourly workers the biggest bonuses in company history? What’s going on here?

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In order to build the Chevrolet Sonic subcompact in America, the UAW agreed to a deal in which Tier One workers earning $28/hr could be forced to take a 50% paycut to keep the Sonic profitable for GM. Because the union membership never voted on the deal and can not strike against it, the agreement has rubbed salt in the wounds opened by the two-tier wage system. Some 40 percent of Tier One workers at the Orion Township plant where the Sonic will be built were supposed to be bumped to Tier Two, but thanks to strong truck sales, the Freep reports that all of the workers facing a cramdown have been able to transfer out of Orion and keep their Tier One status.

nearly 470 of Orion’s 1,100 first-tier workers have accepted GM’s offer to transfer to Flint, which is adding a third shift by the third quarter to help build heavy-duty pickups, the person familiar with the planning said. Another 71 have elected to stay at other factories where they’ve worked while Orion was idled to retool.

That means the rest of the first-tier workers at Orion will be able to return to the factory at their original pay.

And the good news keeps on coming: the NLRB appears to have rejected the complaints filed against the UAW by its members, and GM’s profit-sharing bonuses are said to be the biggest in the company’s history. In a few months, the UAW appears to have beaten back one of its biggest challenges since the bailout. Of course, if HD Pickup demand declines, the workers who transferred to Flint will be looking for work again, and they may be forced to accept wage cuts to go back to Orion. Meanwhile, the two-tier system will likely continue to create tensions on shop floors around the country. For now though, it seems the crisis has passed… just in time for a new negotiating session.

No war of words, no strikes, no hard feelings: After only two rounds of negotiations, Volkswagen and the metalworkers union IG Metall had a deal late last night. There will be a 3.2 percent increase in base pay effective May 1, 2011, and each employee will also receive a one-time payment corresponding to one percent of his or her annual pay but no less than €500. Read More >

Chrysler’s extended Super Bowl ad for its 200 sedan is making waves in the American auto business, for “bringing back the pride” in America’s automakers and the city that hosts them. But, as with most things Detroitean, there’s a cruel irony lurking just below the veneer of pride reborn. The Detroit News reports

Three workers from Chrysler Group LLC’s Jefferson North plant were arrested recently for alleged drug use during their lunch break after police were tipped off by the automaker.

The workers were arrested on Jan. 24 but have not been formally charged, said Det. Lt. Robert Honey, of the Michigan State Police’s County of Macomb Enforcement Team.

This is the second time in the last six months that workers at Chrysler’s Jefferson North plant have been caught indulging in overly celebratory lunch breaks. Despite all the feel-good Chrysler advertisements about Detroit Pride and quality craftsmanship, workers assembling the new much-lauded Grand Cherokee can’t seem to build the thing while sober. But there’s more to this than sheer irony: we don’t have details on the latest round of arrests, but a Chrysler-employed TTAC commenter has told us that the previous round of arrests came after second-tier workers turned in union brothers out of apparent resentment of the fact that their colleagues were making twice their second-tier wage while drinking and smoking their way through the work day. Which raises an interesting question: if Chrysler didn’t have a two-tier wage system, would Jefferson North’s 24 hour party people have been caught? Is it possible that the shop-floor tensions brought on by two-tier wages actually help curb UAW worker excesses?

With the UAW entering contract negotiations this year, all eyes are on Volkswagen’s discussion with its largest union IG Metall… and the signs coming from those European labor talks aren’t looking promising. Automotive News [sub] reports that VW has offered IG-represented workers a 2.9 percent pay raise over the next two years and a €300 one-time payment by June, but with VW raking in billions in profits this year, the workers aren’t biting. IG Metall chief negotiator Hartmut Meine tells Automotive News [sub]

The difference between demand and offer is much too big. The length of the deal has to be shorter and the proposed pay hike higher, before we can talk about a compromise

“The wage gap east of our domestic borders and new competitors from the Far East force us to be measured in all permanent increases in costs,” Schumm said, adding that VW already pays its workers 10 percent of the brand’s operating profits as a performance bonus.

During the government’s bailout of General Motors, the UAW agreed to a number of concessions, including management’s ability to use “Innovative Labor Practices” in order to build a fuel-efficient subcompact car in the US. As a result, the 1,600 workers at the firm’s Lake Orion plant had a choice: the 800 most senior workers would return at the $28 “tier one” wage, while another 500 workers would be able to return only if they accepted a 50% pay cut, pushing them into the union’s “second tier” of wages. Workers forced into the tier two, which typically applies only to new hires, were not allowed to transfer to other Michigan plants, and could neither vote on the agreement, nor strike because of it. After all, the bailout’s green-tinged sales pitch meant that building a subcompact in the US was a politically necessary move, even if it went against every UAW principle… which is why it’s awfully ironic that the safety valve for this deteriorating situation is a factory building trucks.
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Once again, the UAW-Transplant battle has produced the most memorable auto-related quote today, as union boss Bob King tells Reuters

If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW

The stakes in the UAW’s crusade were already high, but with this latest gem, King confirms that that it’s all or nothing. Which is an interesting way to frame a campaign that even the objective reporters at Reuters are forced to conclude is something of a fool’s errand. After all, it’s not as if the UAW hasn’t tried to organize transplant factories before, and they have yet to come close to succeeding. But with the rhetoric turned up to “11,” the UAW is on a one-way trip to destiny… and King’s best last-minute pitch to the defiant transplants is

We want to be on the cutting edge of labor relations. That is the opportunity for all these companies.

A tempting idea, to be sure, but now that King has informed the world that the union’s alternative to success is death, the transplants have more incentive than ever to say “thanks, but no thanks.” And it’s already starting. Is this the beginning of the end of the United Auto Workers?

Last week, UAW boss Bob King revealed that his campaign to organize transplant auto factories had already begun with talks between his organizers and the factory operators. And though King suggested that his campaign would include the labeling of uncooperative automakers as human rights abusers, he refused to say which automakers he was speaking with, telling Reuters

We are in some preliminary discussions which we agreed to keep confidential so we will do that

But apparently not all the transplants are playing ball… both in terms of the discussions themselves as well as King’s commitment to confidentiality. Unfazed by King’s threats, Honda tells Bloomberg [via Kausfiles]

Honda has had no dialogue with the UAW and has no interest in a discussion with them. The issue of union representation is ultimately one for our associates to decide and, for more than three decades, Honda associates have spoken loudly and clearly by choosing to reject UAW outreach efforts.

Your move, UAW.

Whoa! Is there a doctor in the house? We seem to have a bit of a situation here. UAW’s President Bob King threatened that the union will label anti-union companies as human-rights abusers. Read More >

Want to know how to get a good chunk of the Detroit 3, no money down? Easy: Today, Fiat increased its ownership of Chrysler from 20 percent to 25 percent. What did they pay for it? Niente. Fiat received the extra shares “upon the Company’s achievement of the first of three performance-related milestones,” as a Chrysler Group LLC press release proclaims. And what is that milestone? They started making an engine. Read More >

As the biggest week in the American auto industry, the annual North American International Auto Show in Detroit regularly attracts a sideshow of protesters bent on sending a message to the hordes of executives and analysts who cram Cobo Hall. In 2009, UAW members marched against the possibility that the auto bailout (then still a work-in-progress) would require union concessions. Last year, Tea Party groups rallied to protest the government’s ownership of GM and Chrysler, while UAW members counter-rallied in support of the bailout (apparently those concessions weren’t so bad). This year will be no exception to the trend, as dissident UAW members will be protesting the union’s two-tier wage system, a pre-bailout concession that has created considerable controversy of late. And they’ll be getting support (if only in word, not action) from across their friends from the North, as the Canadian Auto Worker boss has recently called for an end to the two-tier system, saying

That has to be a strategy of the UAW to gradually get out of the two-tiered system. I don’t know if it can happen overnight, but they’ve got to start sending signals to future employees that the low, tiered wages are not something that can sustain families long term

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