Chrysler will hire 400-500 new workers to help build the upcoming Dodge Dart compacts at its Illinois plant. The workers will be added to the plant’s current shifts.
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UAW president Bob King endorsed the 54.5 MPG CAFE standard for passenger vehicles while testifying at CAFE related hearings in Detroit. Automotive News quoted King as saying “The proposed rules are sensible, achievable and needed.” The standards would have to be met by 2025 and work out to about 40 mpg in the real world.
TTAC Commentator Jimal writes:
Sajeev and Steve,
I have one of those quandaries that most adults will go through sooner or later in life and I figured I would tap into you and the B&B for suggestions. My father passed away recently after a long illness and I’m helping my mother with settling his estate; cleaning up finances, etc. Among the things my father left behind were his 2005 Buick LeSabre, which my mother hates, and her cherished 1996 4-door Chevy Blazer. (Read More…)
A good month after our trek to the South where we checked on the (un-) willingness of transplant workers to join the UAW, the hard-hitting team at the Reuters Detroit bureau did the same. In a special report, Reuters comes to the same conclusion as we did: It won’t be easy. Bernie Woodall and Ben Klayman of Reuters did more thorough digging. And they unearthed the secret strategy of the UAW: With the help of the German metalworkers union, they want to talk themselves into Volkswagen and Daimler: (Read More…)
The UAW called off the transplant war. It won’t even identify an organizing target among foreign automakers with U.S. operations, UAW President Bob King told Reuters (via Automotive News [sub] ):
“We are not going to announce a target at all. We are not going to create a fight.” (Read More…)
At the beginning of this year, the United Auto Workers pledged that it would launch a campaign to organize the foreign-owned, non-union “transplant” factories in the US, threatening to tar uncooperative automakers as “human right abusers.” The campaign initially lost steam, but the UAW stuck to its pledge, re-iterating on several occasions that it would organize “at least one” transplant factory by the end of 2011. With one month left to accomplish that goal and no signs of progress in sight, the UAW has officially called off that goal. In fact, the UAW now hopes to simply pick an automaker to target by the end of 2011. Spokeswoman Michelle Martin tells Bloomberg
At this point, our hope is to make a decision about who we’re going to target by the end of the year. But obviously, we won’t have the organizing campaign completed by the end of the year.
This is not too surprising, considering the UAW announced last week that it would be focusing on dealership pickets initially rather than factory organizing. And sure enough, the first dealership picket has begun, targeting Hyundai dealerships. And yet, says Martin
This has nothing to do with the domestic organizing campaign. Hyundai is not the target.
Huh? If the UAW is not committing to organizing Hyundai’s assembly workers, why picket Hyundai dealerships?
With a tough negotiating session with its traditional employers now complete, the United Auto Workers are turning their focus back to the year’s primary goal: organizing the transplant factories. 2011 was supposed to be the year in which the UAW took down “at least one” foreign-owned auto plant, with the union’s boss even going as far as to say
If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW
But as we found, the UAW is not welcome in the South, where most of the transplant factories are found. And with Honda, Hyundai, Toyota and VW all rejecting the UAW’s advances in some form or another, the union’s options are fairly limited. So instead of taking on the factories directly, the UAW is bringing back a questionable tactic from the days when it was misleadingly bashing Toyota for “abandoning” the NUMMI factory: they are taking the fight to dealerships.
In a newsletter to members of Local 598, an editor revealed an interesting wrinkle in the recently-ratified contract negotiations, writing
With the option of strike off the table and the government still a part of our negotiations (literally sitting in the room with us ‘observing’ our talks), I don’t believe any better agreement could have been reached,
But now, reports Bloomberg [via Automotive News [sub]], local shop committee person Dana Rrouse insists that there was not actually a government official present at union negotiations. He tells the news service
That was a misprint. I didn’t get to proofread it. It went out and then I said ‘Where did you get that from?’ I mean, I talked about us still being under government, but nothing as far as they were sitting there.
The government still owns a large portion of GM’s stock, but it too says it was not involved with negotiations with the UAW. Which is probably the right position to be taking: with so much acrimony generated by the latest round of negotiations, there are few reasons to be associated with them. Still, it’s strange that such an explosive “misprint” should have made its way into a union newsletter. Even if the government were not involved in the slightest, as it insists it was, there’s clearly a perception among UAW members that the government remains a consistent presence in the auto industry.
From his dream of a UAW-represented VW plant in Tennessee (ha!) to his desire for a seat on the boards of the Detroit automakers (double ha!), UAW President Bob King has a way of idealizing the German unions. And no wonder: while the UAW spent decades fostering a radical sense of entitlement, German works councils entwined themselves with their respective employers, earning places of power among the world’s largest automakers. But unions are a delicate balancing act in every country and culture, and even Germany’s unions, widely hailed as the example for the industry, can run into trouble.
Last time it was Volkswagen’s powerhouse works council, which erupted in a scandal over VW-funded sex tourism (with free Viagra and shopping trips for the wives!) back in 2005. With Opel’s union boss, Klaus Franz, becoming caught up in his own (slightly less lurid) scandal, GM’s acknowledgment that more cuts could be coming for Opel could prove just as explosive for the German works council model.
Chrysler CEO Sergio Marchionne wants an end of what he called “two classes” of employees represented by the United Auto Workers union. The two-tiered system “creates the kind of environment that doesn’t appear to work in the same direction that we’ve been trying to use to establish the new basis of Chrysler,” Marchionne told Reuters. He continued: (Read More…)
Watch UAW President Bob King on New Contracts: Top Priority Was Creating Jobs on PBS. See more from PBS NewsHour.
Though UAW boss Bob King has said that organizing transplant factories is a life-or-death struggle for the union, but the real make-or-break issue this year was the contract negotiations with the Detroit Automakers. And though King roundly denies that a rift has been formed in his union over two-tier wages, the facts simply don’t back that position up. In the last contract to be ratified (with Chrysler) for example, only 54.8% of the union approved the deal… hardly the “overwhelming support” that King claims. Moreover, 55.6% of the skilled-trades workers at Chrysler rejected the contract, according to the Detroit Free Press. King’s narrative of experienced workers “demanding” higher wages for the Tier Two brothers “in the greatest spirit of solidarity” just doesn’t hold up to scrutiny.
(Read More…)
“I see no need for union representation,” says Adrian Leslie, line worker at Volkswagen’s Chattanooga plant. “We are being treated fairly here.”
If it would be him alone to decide, then any plans of the UAW to unionize Volkswagen Chattanooga are doomed. Leslie is not alone in his opinion, and the plans are doomed. (Read More…)
According to many news sources, the historic Twin Cities Assembly Plant in St. Paul, Minnesota is headed for a not-so-grand finale. Come December 19th, the 86-year-old facility that originally built Model Ts will be history. Ironically, Twin Cities is currently making the T’s spiritual successor: the (somewhat iconic) Ford Ranger compact truck. So shall we, the collective group of automotive journalists, lament the loss of this famous nameplate from Ford’s storied past? (Read More…)
Considering the United Auto Workers’ VEBA fund is still Chrysler’s second-largest shareholder, CEO Sergio Marchionne is taking an amazingly hard line with the union. With a GM deal long done, and Ford’s deal moving towards approval, Chrysler is the last automaker on the UAW’s to-do list… and Marchionne tells Bloomberg he’s up for a fight if necessary, saying
I sincerely hope that we don’t have to get to arbitration. But if necessary, Chrysler will go there. We and GM are completely different
Marchionne is reportedly pushing the UAW for a number of tough concessions, including a mere $3,500 signing bonus (compared to $5k at GM and a reported $6k at Ford), and the elimination of a planned 2015 cap on entry-level “Tier Two” workers (at 25%). And though both of these are tough asks, he’s using UAW boss Bob King’s concept of union internationalism as a cudgel against the UAW, playing Italian unions off their American counterparts. And as a result, he could earn Chrysler a favored place among America’s unionized autoworkers.
(Read More…)
One of the legacy costs that GM was not able to reduce in the bailout was pension costs, a whopping $128b obligation as of the end of 2010. And though the plan is “only” underfunded by $10.8b at the end of June according to GM, Kenneth Hackel, president of CT Capital LLC (and author of two textbooks on valuing securities) recently told Bloomberg
The financial risk because of [GM’s pension liability] is higher than people understand. The cold reality is if you used a conservative discount rate and you wanted to close out the plans, you would have to raise about $35 billion.
With GM’s market cap sagging into the low-$30b range (currently around $34b), the risk of pension liabilities growing larger than GM’s market capitalization is very real. And as lower interest rates and a weak stock market reduce pension fund returns, the obligations grow, in turn putting pressure on GM’s stock price. And it’s not like nobody saw this coming: a GAO report released in April 2010 issued dire warnings about the state of GM and Chrysler’s pension obligations. Now, according to the ace reporters at Reuters, GM and the UAW have hashed out a buyout deal giving workers the option of being bought out of their pensions. Which has us dying to know: what’s a UAW pension worth in cash?
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