Mitsubishi’s Normal, Il factory is the nation’s most under-utilized auto plant. Facing declining American sales, its operators have cut costs to survive. But unlike other transplants, Mitsubishi employs UAW workers, so it can’t just kill its workforce and feed them to Japanese-made robots, right? Well, Mitsubishi has actually surpassed the realm of mere xenophobic science fiction and has managed to wrangle concessions from the United Auto Workers. Bloomberg reports that 1,260 members of UAW Local 2488 approved pay cuts of nearly five dollars per hour and higher benefit costs in a new four-year contract with Mitsubishi. So much for the long-running Detroit narrative of the UAW being blind to the struggles of automakers and squeezing the life from domestic manufacturing. Sales and production have been cut in half at Mitsubishi’s American operations since 2002, and apparently the union get it. It’s not exactly a happy story for anyone, but the bottom line is that jobs are being kept in this country. Incidentally, this story explains with the utmost clarity why Detroit and the UAW joined forces to make a run on the federal piggybank. Otherwise they would have had to face the music and make an unpleasant but ultimately sustainable compromise like this one.

The Associated Press report brings us the stunning news that GM’s employees have loaded up their 401K plans with so much company stock that the cupboards ran dry. Back in January, Financial Weekly published one of the many articles about the risk of loading-up on company stock. “After thousands of employees at now-defunct corporations such as Enron and WorldCom saw their retirement savings wiped out early in this decade, things were going to be different.” In case anyone has been under a rock for the past ten years, you don’t want your salary and your pension and your retirement investments all riding on the fortunes of one company. The big reason GM ran through its authorized number of shares for the 401K plan was the price plunge. GM stock is off 75 percent from its recent highs; it now takes four shares to stock to soak-up the cash which previously would have only bought one share. Between now and sometime in November when GM puts through the paperwork to print more shares, employee contributions will go into other investments. How long will it be before GM employees follow their Enron soul-mates into court over bombed-out 401K plans? Actually, it’s already happened. Workforce Management reported the January 18, 2008 settlement of a class action suit brought against GM in 2005 over the plunging value of employee 401K purchases of GM stock. Will they never learn?

“Black Lake” is a United Auto Workers (UAW) owned retreat near Onaway. The Detroit Free Press‘ Tim Higgins describes the golfing part of the 1000 acre for-profit (in theory) center. “UAW members and retirees get a 20% and 30% discount, respectively, on greens fees, according to the course’s Web site. Golf with a cart on a summer weekend costs $85 for 18 holes. The course offers five tees on nearly every hole to reflect a golfer’s skill. The par 72 course can play from 5,058 yards to 7,030 yards.” Now that it’s been revealed that the entire facility has lost $23m of members’ money over the last five years– not including the $6m up-front cost for the golf course– union officials are busy talking-up the education side of the endeavor. “The UAW family education center is an integral part of our union. It provides very important training and education activities for our members,” UAW spinmesiter Roger Kerson told the Freep, who added that “he declined to talk about specific operation numbers or plans for the future.” You want irony? “UBE’s management of the education center has generated revenue of about $30 million over the past five years — and net losses of $20.5 million. The operations were hit hard last year by a $5.9-million payment to an employee pension fund. And from 2003 to 2007, revenue at the education center dropped by 18%.” [NB: Look for more stories of Detroit’s perk pork in the run-up to the federal bailout.]

The Detroit Free Press reports that GM retirees could face pension interruptions thanks to the General's dumping of obligations to bankrupt supplier Delphi. Salaried employees who never worked for Delphi had their pensions handed over to the troubled GM spinoff in 1999, and had wondered what was happening when checks began arriving with Delphi's name on them. But puzzlement is giving way to concern, as the federal Pension Benefit Guarantee Corp has warned that Delphi is some $3.5b in the hole on its pension obligations. And no wonder, considering GM saddled it with pension obligations from several closed and sold factories as a spin-off goodbye present in 1999, a move pension experts call "legal." As in there ought to be a law against it. Meanwhile, hundreds of the non-Delphi retirees have received letters from the supplier saying their pensions are at risk, thanks to Delphi's bankruptcy. Delphi is supposed to transfer $1.5b in (hourly retiree) obligations back to moneybags GM, but mysteriously that hasn't happened yet, prompting the PBGC's concern with the situation. Though Delphi's bosses swear up and down that they're committed to honoring pension obligations, if the transfer doesn't happen by September 30 when new PBGC rules go into effect, Delphi will likely find itself in pension default. Which means hundreds of workers who never even worked for Delphi would be at the mercy of the PBGC. And those same new rules mean the PBGC will likely not honor most planned payment step-ups and early retirement benefits. "I don't want a handout," says one retiree. "I want General Motors to pay my pensions like they told me they were going to do."

Transplant firms pride themselves on running NA operations differently than the D2.8, but the body-on-frame tailspin has no interest in pride or strategy. Automotive News [sub] reports that Nissan, which has never laid off a North American worker, will buy out about 1200 employees from its Tennessee plants. Workers at Smyrna Assembly and the Decherd powertrain plant will be offered up to $125k to leave over the next three years, saving Nissan 18 percent of its TN payroll and shutting the night truck production shift. By Detroit standards, this measure is almost not worth reporting on. But for Nissan and its employees, the stakes are considerably higher. At least that's what the UAW wants us to think; they're playing the told-ya-so card to Nissan's worried Tennessee employees with more than a little schadenfreude. "As a union member, contractually, I know what my rights are," says Mike O'Rourke, whose UAW Local 1853 has twice failed to unionize Smyrna. "Unfortunately, at Nissan, they don't know what the bottom is. And they're afraid… In their employee meeting, one of the employees said, 'If we don't go, are you going to reduce our wages?' And management wouldn't answer," says the UAW honcho. "I think you and I both know the answer to that question." Except that, absent any actual examples of transplants screwing workers, the evidence points rather away from O'Rourke's scaremongering suggestion. For example, rather than abandon or otherwise its employees at Tundra/Sequoia plants, Toyota is keeping employees busy (and paid) by training them and improving operations. While UAW shops are cut and shut left and right. Funny how that works.

After accusations of "betrayal," blockades by the Canadian Autoworkers union, threats of lawsuits against the union and sops tossed to the union, GM is moving ahead with plans to close their truck plant in Oshawa, Ontario. However, it looks like it'll cost them a bit more than they'd anticipated. The Globe and Mail reports GM and the CAW have struck a deal whereby GM will add another model to the mix produced at the auto assembly plant there. Oh, and pay some workers for four years after the plant closes. The complete details of the deal will be announced to workers later today, but it includes paychecks for laid-off workers with 26 years seniority for four more years at 65 percent of their current wages. That makes them eligible for "a special retirement incentive applicable to people with 30 years of experience." Workers with 27 to 30 years would also be paid until they reach the 30-year mark. In return, GM gets to keep building cars in the most expensive location in North America. Such a deal!

Canadian Auto Workers (CAW) union president Basil a.k.a. Buzz Hargrove is stepping down early. Although Buzz was expected to retire when he reached the mandatory retirement age of 65 next year, he's now leaving "soon after" the union selects his successor this summer. His hand-picked heir-apparent is the equally-outspoken not-to-say borderline-militant Ken Lewenza, current president of Windsor, Ontario Local 444. Buzz is leaving amid the controversy we've all come know and love; rumors say the national executive board is pressuring their staff to support Lewenza's bid. The Victoria Times Colonist quotes columnist Gord Henderson, who describes Buzz' golden boy as having a "Dr. Jekyll-Mr. Hyde persona" whose "flights of rhetoric are a wonder to behold, akin to watching Mount Vesuvius blow its stack." So we shouldn't run out of Lutz Award-worthy quotes from north of the border. With Canada's dubious distinction as  the highest-priced labor force in the North American and auto industry manufacturers shutting down Canadian plants, Lewenza will have plenty opportunity to display his brand of "old-time table-thumping unionism." So don't go away; we'll be back with more!

We all know that GM is burning through cash faster than a well-oiled cash burning machine, but nobody seems to know where the next GM greenback fix is going to come from. Automotive News (sub) reports that a JP Morgan analyst thinks it could come from GM's VEBA contributions. The General has set aside some $14.5b for the UAW fund which was envisioned as a way for GM to get out from under its crippling benefit liability. But with cash tight and credit increasingly unavailable, the UAW may just have to loan that money back to GM to keep the lights on for another few years. Analyst Himanshu Patel reckons GM needs $10b to prevent a major cash crunch by 2009, and that GM could squeeze up to $6b from the UAW fund. "Why would the UAW agree to this? My short answer is they have to," Patel said, adding "the UAW now is extremely motivated to keep GM, Ford and Chrysler out of bankruptcy." Oh yeah, and GM would have to pay the UAW up to 12 percent interest on the friendly loan. It's a risky move though, given that nothing indicates that GM will ever be able to pay the money back. But then GM and the UAW are up the same creek with the same lack of equipment, so the partners in failure may have little choice to double down for another round. Unless of course there's some other white knight waiting to throw $10b into the giant sucking sound that is General Motors. Which there isn't.

Far be it from me to overuse a metaphor, but you know things are bad for the home team when the head cheerleader starts following the other team's plays. Right in the heart of UAW-land, Detroit News' Auto Editor Manny Lopez [reads TTAC] and mulls over the question of what constitutes an "American" car. His answer will probably piss off the Level Field Institute: as long as it's built in America with American parts, it doesn't really matter where the parent company resides. Waxing philosophical, he asks "what's more American: a Dodge Caravan built in Canada with fewer American parts or a Toyota Sienna chock full of Red, White and Blue components and built in Indiana [Ed. By non-union labor]?" Continuing along the same lines, Manny also wants to know if it's "more important to have the dollars flow back to Detroit, Dearborn or Auburn Hills or to employ American workers?" He'd better be careful or the home team fans may demand he turn in his pom-poms.

Ontario's struggling manufacturing sector took another blow yesterday. CNews reports that Oakville, Ont-based automotive supplier Polywheels has shut down indefinitely. Workers arrived for their 7am shift on July 2 only to find the plant closed and shut down notices posted at the entrances. The workers, represented by the Canadian Auto Workers (CAW), were surprised that the company shut its doors without warning. "I'm upset because this is a good factory, they had good, good benefits," emotes a local worker in a moment of unionist entitlement. The Toronto Sun reports that American Axle's own strike, which halted production of Polywheels' bread and butter models (e.g. Sierra/Silverado) was a body blow for Polywheels. The subsequent rise in gas prices was the coup de grace, according to another worker: "We figure out how to bring the price of oil down and we'll all be fine." Easier said than done, I suppose. [Thanks for Michael Kirouac for the tip]

First of all, the National Labor Committee says that less than 15 percent of its money comes from labor unions. So this is not a United Auto Workers' front organization. Second, in a phone call [below] Director Charles Kernaghan was clear that Toyota's Japanese factories adhere to the country's labor laws (even though you may be surprised to learn that ToMoCo's been on a two-tier wage system for decades). Kernaghan's beef is with the automaker's suppliers. "Toyota's much admired 'Just in Time' auto parts supply chain is riddled with sweatshop abuse," he insists. "Including the trafficking of foreign guest workers, mostly from China and Vietnam to Japan. They're stripped of their passports and often forced to work– including at subcontract plants supplying Toyota– 16 hours a day, seven days a week, while being paid less than half the legal minimum wage. Guest workers who complain about abusive conditions are deported." The organization's report is low on stats, big on anecdotes and focused on pious Prius celebs. And yet, it's a point we've brought up before. International automakers'– and their customers'– willingness to turn a blind eye to their suppliers' working conditions is a black eye for the business– albeit one cleverly covered by makeup. 

The Canadian Autoworkers Union (CAW) ended its two-week blockade of GM's Oshawa truck factory this morning, in compliance with a court injunction. The Detroit Free Press reports that the CAW is ditching the barricades for "other actions." CAW Chairman Keith Osborne tells the Freep that union lawyers will meet today to discuss the possibility of filing a complaint with the Ontario Labor Relations Board. But while the CAW lawyers talk offense, GM spokesfolks are trying to leave the unpleasantness behind: "Now is the time to focus on discussions on new product mandates for Oshawa and support for affected employees." And apparently GM's backing its words with… more words. Bloomberg reports that "GM is in preliminary talks to add a third vehicle at an Oshawa car plant," in addition to the "second car" promised to CAW in their month-old labor agreement. The Toronto Sun says that the Camaro and the unnamed rear wheel-drive "second car" planned for 2011 could be joined by a front wheel-drive model, thanks to the Camaro's flexible production line. Ontario may not be the cheapest or most efficient place to build vehicles, but its tax-dollar giveaways are world class. Expect public money for the third vehicle line to smooth things over between GM and the CAW. It's win-win– as long as you're not a Canadian taxpayer.