Talk of the UAW getting a seat on the board of General Motors in return for “concessions,” has Automotive News [sub] executive editor Edward Lapham thrilling at the idea of a UAW-run GM. Read only the title of his latest piece “UAW should get on board,” and you might assume it to be a call for more substantive UAW concessions to match the imminent bondholder haircut. You’d be wrong of course. “Nearly three decades ago, Doug Fraser, who was then president of the UAW, got a seat on the Chrysler board until the union recouped the wages and benefits it gave up so the automaker could get loan guarantees,” writes Lapham. “But this time, the union should do more.” Really? More? “Imagine what would happen if the UAW beat its sword into stock shares and invested its $1 billion strike fund in GM,” challenges Lapham. But there’s no need to imagine, because Lapham breaks it down for you. “It would effectively usher in an era of industrial peace and labor cooperation,” he figures. Not to mention the dawning of the Age of Aquarius. And with GM’s market cap treading water at $3b, the UAW could just snap up nearly a third of the company and get several seats on the board. Not only would this “send a loud, clear message to Congress and America that the UAW believes in GM’s chances to survive and thrive,” figures Lapham, “If you believe in the upside, it could be a spectacularly lucrative investment.” Or not. The relationship between the UAW and its employers has been defined by abuse, parasitism and disregard for the perogatives of competition. And it seems like even Lapham understands this, concluding his piece with the dire-but-fun-loving admonition to: “think of all the fun the UAW directors could have. Especially around contract time.” And you think GM is in bad shape now.
Category: Union News
Yes, yes, The Heritage Foundation. Right wing whack jobs. But TTAC is open to arguments from all ends of the political spectrum, from Prius-driving socialists to S65 AMG-driving free marketeers (I’m looking at you Shoes). As always, you’re free to make of this what you will. “The Detroit automakers explain in their SEC filings that their benefit expenses are for current workers, not former employees. This is because they follow generally accepted accounting principles in preparing these estimates. If the figures did include current retiree benefits, the average hourly amount would be much higher than they actually report. UAW employees earn far more than most Americans do.” So, now how much do they pay? “Chart 1 shows the average hourly compensation for UAW workers and the average compensation for all private sector workers. These figures are based upon calculations by the Detroit automakers themselves as published in SEC filings, their annual reports, and other materials. According to briefing materials prepared by General Motors, “The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked.”
As we attempt to understand the UAW’s Job Bank program, and whether or not their reported suspension of that program is a meaningful concession, we’ve been looking for information on it. Unfortunately, as a somewhat outdated but highly informative report from Carlist explains, the details of the Job Bank are kept under wraps by the Union and automakers for “competitive reasons.” In fact, when asked why GM publicized its health benefit and pension obligations but not its Job Bank information, a GM spokesman said “that is public information that can be found in our financial statements, job banks isn’t.” In the absence of public information on the program, the original terms of the Job Bank agreement from 1987 (leaked to Carlist) are all we have to go on.
United Auto Workers Boss Ron Gettelfinger held an emergency meeting with union local officials in Detroit today to discuss possible concessions aimed at bolstering the case for an automaker bailout. The result of that meeting was an agreement to suspend the union’s controversial Job Bank program, and to allow the D3 to delay making payments to the VEBA retiree health care trust in 2010. The VEBA fund has long been posited as a potential solution to Detroit’s liquidity issues. Reuters reports that the UAW would consider other changes to the 2007 labor contract with the American automakers, but that all changes must still be approved by union members. Gettelfinger called the decision “the responsible thing to do,” noting that discussions with the automakers are ongoing.
We’ve been harping on the UAW for not making concessions either at this week’s congressional testimony or subsequent press conferences. After all, how is congress supposed to take your endorsement of a $25b bailout seriously when you are part of the problem and yet refuse to give up a single iota? Well, by passing the buck (for now), Congress has apparently convinced Detroit that it has to offer something, and the union boys are starting to understand that they have to be part of the solution. At least for PR purposes. The UAW’s controversial job bank program has been widely floated as a possible concession, and apparently Gettelfinger wants folks to know that GM isn’t paying his union brothers $77/hr to do nothing. “It’s not gone yet but it’s almost gone,” Gettelfinger tells the Detroit News. “We’re on the verge of eliminating that provision.” So, why does the DetN lede their story with “reports that the United Auto Workers union is in talks to dismantle the controversial jobs bank program are premature, according to people familiar with the situation”? Read More >
This week’s round of congressional testimony has forced our elected officials take sides on the auto industry, a topic that typically doesn’t often factor too heavily into national level grandstanding politicking. Detroit News Scribe Bryce G. Hoffman figures that the divisive issue of aid to automakers is creating a house divided… along the old Mason-Dixon line. The split is based on another legislative battle that hasn’t visited the corridors of power as often in recent years: anti-union “at will” employment laws. These laws are popular in many southern states which have used the lack of labor organization to attract transplant auto factories which have bring hundreds of jobs– and an ambivalence to Detroit’s self-made hell– to their sunny shores. And like much of Detroit’s newspapers’ coverage, Hoffman is taking his lead from UAW boss Ron Gettelfinger who blasted Alabama’s congressional delegation at a recent press conference. “Alabama paid $175,000 per employee to create those jobs there,” he said. “It just seems odd to us that we can help the financial institutions in this country — that we can offer incentives to our competitors to come here and compete against us — but at the same time we’re willing to walk away from an industry that is the backbone of our economy.” Read More >
Holman W. Jenkins Jr. is not a happy camper. The Wall Street Journal columnist begins his broadside by taking on the Hail Mary-shaped plug-in hybrid gas – electric Chevrolet Volt. Jenkins reckons it’s what the Brits call a “non-starter.” “Even as GM teeters toward bankruptcy and wheedles for billions in public aid, its forthcoming plug-in hybrid continues to absorb a big chunk of the company’s product development budget. This is a car that, by GM’s own admission, won’t make money. It’s a car that can’t possibly provide a buyer with value commensurate with the resources and labor needed to build it. It’s a car that will be unsalable without multiple handouts from government.” While Jenkins’ anti-Volt tirade isn’t especially accurate (you could even call it inaccurate), at least his rhetoric is a moving target, as he changes targets.
“Even as Detroit’s Big Three teeter on collapse,” The Detroit News [finally] concedes. “United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy. ‘The focus has to be on the economy as a whole as opposed to a UAW contract,” Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle. “‘We have made dramatic, dramatic changes and the UAW was applauded for that.'” And speaking of applause, GM CEO Rick Wagoner ought to give Big Ron a big hand; the UAW boss is towing the party line on the Motown meltdown. “”We’re here not because of what the auto industry has done,” Ronny G said. “We’re here because of what has happened to the economy.” But wait! More high fives to follow. Gettelfinger dismissed any talk of a GM (Ford or Chrysler) Chapter 11 with a Wagoneresque “Would you buy a car from a bankrupt automaker?”
The Detroit Free Press claims to have access to the results of Ford’s most recent buyout program, designed to downsize the ailing automaker, and they ain’t good. “Despite an aggressive [and expensive] campaign by Ford Motor Co. to get more autoworkers to leave the company through a voluntary job buyout program, fewer than 3,000 of Ford’s 60,100 autoworkers in North America have decided to go.” In case you missed the meaning of that failure to entice a posse of Blue Oval Boyz to blow town, the Freep sums-up the situation succinctly. “Ford already has lost $8.6 billion through the first half of the year, and it needs to shed workers as quickly as possible to reduce its costs, as global demand for its cars and trucks continues to shrink in the suffering economy.” Even though Ford’s fighting for its survival, the workers’ reluctance to cut bait and fish is understandable; where the Hell are they going to get a job these days? “They can stay and risk their job being eliminated,” analyst Aaron Bragman opined. “Or, they can try to find a new job in one of the worst job markets in years.” In other words, like the orchestra on the Titanic, they’re staying.
WTF, right? If I was a United Auto Workers worker looking at a pile of cash to piss off during these End of Days times, I’d grab it with both hands and get the Hell out of Dodge, Chrysler, Ford, GM, etc. But it seems UAW boss Ron Gettelfinger doesn’t think domestic automakers can bribe any more of his members to quit their jobs. “I’m not sure the value of a buyout at this point and time,” Big Ron told The Detroit News’ Johnny-on-the-spot at a Goodfellows awards ceremony honoring the union boss. (And no, I’m not making this shit up.) “Gettelfinger reasoned that UAW-protected autoworkers who were in the position to leave their jobs would have taken one of the previous rounds of buyouts and early retirement offers and he didn’t see the ‘effectiveness’ of another round.” For whom? If he means the automakers themselves, I’m down with that. Anyway, guess what? Ron reckons the $52b Mother of all Health Care Funds (a.k.a. VEBA) is still alive. And that’s final! “We do not want to open up VEBA. That was one of the most difficult and challenging decisions I ever had to make.” Compared to what, your choice of retirement villas? I kid. I kid.
Remember when the Chevrolet Malibu was the Next Big Thing? Or what about the Cobalt, GM’s small car superstar? You know: “we can’t build these cars fast enough!” Well, guess what? They can. USA Today reports that union officials at Orion Township (MI, Malibu/G6) and Lordstown (OH, Cobalt/G5) reports The General has banned overtime at both factories. Maybe more. What’s unscheduled overtime, you ask? “Unscheduled overtime generally is used when a worker calls in sick. An employee who is on duty at the time usually works half the shift for the sick employee, and another worker is called in early to work the other half. The union officials were unsure how the company would fill assembly line positions for those who are ill.” Meanwhile, shhhh! “Officially we haven’t told employees anything,” GM spinmeister Tony Sapienza told the former McPaper. “As we weather very difficult economic conditions, we’re looking at a variety of ways to be as efficient as possible while balancing the needs of the market for our products.” Translation: Somebody stop me! We’re buring through a billion bucks a month. “Several analysts predict that GM will burn up so much cash that it will reach its minimum operating cash level of $14 billion sometime next year.” Just in case you haven’t been paying attention.
First, this from Chrysler’s September sales press release. “Chrysler LLC’s minivan sales continued to thrive in September based on their strong appeal as fuel efficient, multi-passenger vehicles. Compared with September sales in 2007, the Chrysler Town & Country achieved a 6 percent increase with sales of 9,229 units, and the Dodge Grand Caravan increased 6 percent with sales of 11,056 units. With more than 12 million minivans sold worldwide in their 25-year history, Chrysler and Dodge minivans still command 40 percent of the U.S. minivan market.” Now this from CBCnews.ca. “Chrysler said Friday it will eliminate one shift at its Windsor, Ont., assembly plant over the next three weeks… CAW local 444 President Rick Laporte said he’s aware the company is trying to re-adjust inventory since minivan sales have dropped. ‘My understanding is the minivan sales have really fallen off; my understanding is they have actually fallen off 25 per cent,’ said Laporte, whose local represents about 5,000 workers at the Windsor minivan assembly plant. ‘There’s no orders — the dealer’s have got all they need at this point in time, so that’s why they’re slowing down.’ Each shift employs between 1,200 and 1,500 workers. The employees will be able to file for unemployment insurance and supplementary unemployment benefits.”
Whew! Quite the headline. But that’s how GM rolls these days: save the bad news for Friday afternoon and couch it as “cost savings,” “re-sizing” or some such nonsense. Anway, Reuters reports that The General’s hammered-out a deal with the International Union of Electrical, Radio and Machine Workers (IUE-CWA) union to close the ailing American automaker’s Moraine, Ohio SUV plant, home of the deeply unloved Chevy TrailBlazer and GMC Envoy. As it says above, GM will pay $1.6b into a health-care trust (VEBA) for IUE-CWA retirees and offer 1500 union members up to $140k each to head for the bar to talk about “the good old days.” The IUE-CWA pronounced itself satisfied with the deal. “It’s like getting paid not to breed Dodos.” No, seriously, union reps said they’d set up a board to manage the VEBA account which will take effect in January 2012. Now, I know what you’re thinking. Did someone forget to tell the union that GM’s heading for Chapter 11? Nope. But when faced with the inevitable, what were their options? See you in court, fellas.
Automotive News [sub] reports that United Auto Workers (UAW) chief Ron Gettelfinger is against the nevergonnahappen GM-Chrysler merger. Sort of. “I personally would not want to see anything that would result in a consolidation if that would mean the elimination of additional jobs,” Gettelfinger said. “But until we get into actual discussions, we can’t just speculate on what is going to happen. We have to know the situation, and then we can deal with it.” New CAW President Ken Lawenza is holding off on making any “if”-dependent statements on the matter until getting more details from GM and ChryCo. “We have already tried to contact the companies. We’re waiting for calls back,” Lewenza tells Reuters. Ken could be waiting for a while though, because the two firms probably haven’t even worked out the deal’s details yet. If there is a deal. Which there probably isn’t. Reaction on the other side of the pond is equally supportive…
If you’re wondering about the reason behind Toyota’s $250m zero percent marketing blitz, look no further than their very own job bank. Unlike The Big 2.8’s top-secret pool of idled workers, ToMoCo’s labor reservoir is a matter of company policy, not union contracts. With Tundra sales as frozen as the truck’s namesake (down 61 percent in September!), something had to give. The Wall Street Journal reports that “the Toyota plant here in southwestern Indiana and another in San Antonio, Texas, stopped making pickup trucks at the beginning of August. About half of the 4,000 workers are expected to resume making vehicles in November, and now Toyota says the rest won’t likely be back on the assembly line until at least April.” Putting a happy face on a bad situation, “senior plant manager Norm Bafunno said he can already see the benefits of the training. Mr. Bafunno cites a Teflon ring designed by an assembly worker during the down time that helps prevent paint damage when employees install an electrical switch on the edge of a vehicle’s door.” This problem was causing workers to have to do a bit of paint buffing on one or two trucks per shift, back when they were actually building trucks. Meanwhile, have you noticed how little news we’ve heard about United Auto Workers’ efforts to organize the transplants?
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