When I visited GM’s Detroit-Hamtramck Assembly plant back in October, I was greeted with a few surprises. One was a small fire that flared briefly on my sweater after a cinder from the Volt’s body-welding station struck me. The other was the sight of GM’s latest, most high-tech green car being assembled on a line that was filled with GM’s oldest-school dinosaur cars, the Cadillac DTS and Buick Lucerne. The scene was no doubt intended to inspire appreciation for the changing face of GM, but the scarcity of Volts amid the oceans of giant front-drive barges (production was just beginning) made it clear that it would be a while before Volt production would occupy much of the sprawling facility. With the DTS and Lucerne headed for retirement, the new 2013 Malibu will be taking up residence at Detroit-Hamtramck later this year, even as Volt production capacity is increased to hit next year’s 60k unit goal. And now GM is announcing that the next generation of Chevy Impala will be built at Detroit-Hamtramck as well, leaving folks in Oshawa saying “eh?” (or words to that effect).

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After reaping the hurricane by forcing “Tier One” workers at GM’s Orion Assembly plant into the UAW’s “Tier Two” last year, essentially giving workers a 50% pay cut, GM has been working with the UAW ever since to mitigate that decision. Now, Bloomberg reports that the UAW’s GM negotiator is targeting the $14/hour Tier One wages for growth in upcoming negotiations, arguing that the lower pay rate is “not a middle class wage.” But, he adds

The union doesn’t expect to reach $28 an hour this year for new workers, and it doesn’t intend to make GM uncompetitive

We’ll have to wait and see what that means, but any effort on the part of GM and the UAW to reduce the gap between Tier One and Tier Two wages will help relieve the inevitable shop-floor tensions that such inequity creates.

Ford is tooling up for what is likely to be a tough UAW contract negotiation in light of its return to hefty profits. And in hopes of shifting the conversation from its strong financial performance, Ford is highlighting the fact that it still pays $8 more per hour than its competition. Of course, there has been improvement, as Ford notes at its fordahead.com website

Ford’s average hourly cost per employee for wages and benefits in the U.S. reached about $75 per hour in 2007, prior to the negotiation of a new national contract. By negotiating an agreement with the UAW that year, and by adding modifications in 2009, we were able to substantially improve the competitiveness of our labor costs. Had we not reached this agreement, our average hourly wage rate would have remained simply unsustainable — and utterly uncompetitive — and Ford would not be in a position to create new jobs or bring new work into our U.S. plants.

But Ford has only itself to blame for some of those higher labor costs, as some $2/hour of its labor cost disadvantage is a result of its record-high profit-sharing checks, according to the DetNews. And, says Ford, once new “second tier” hires enter the Ford workforce, it expects wages rates to drop to parity with the transplants. In short, Ford is making the case to stay the course, working through existing contract changes to get to parity with the transplants. But given the fact that Ford is already making hefty profits, don’t expect the UAW to simply roll over. The battle lines have been drawn… but nobody knows  how the conflict will actually play out.

Does the UAW owe taxpayers a thank you? Chrysler’s attempts at thanking the taxpayers in the midst of bailout-mania seemed to draw more ire than respect, so it’s understandable why the UAW has not made any effort to thank taxpayers for the auto bailout, without which the union surely would not have survived long. But now that UAW local 1268 has made a somewhat belated, but nonetheless earnest gesture of thanks, the national UAW’s silence on the matter suddenly seems a bit deafening.

And no, it’s not an April Fools day story! Bloomberg reports

The United Auto Workers membership rose 6 percent to 376,612 last year, the first gain in six years as U.S. automakers began hiring amid a recovery in sales.

The UAW’s membership increased by 21,421 members from 355,191 in 2009, according to a union filing today with the U.S. Department of Labor.

UAW President Bob King has wasted no time in declaring this a sign of recovery in what you might call the UAW’s “core business”:

This increase is a reflection of new organizing by the UAW, the recovery of the domestic auto industry and UAW members who won a first contract during the year. We hope to continue this growth in 2011 and beyond, as we fight to win a more fair and democratic process for workers to organize.

Of course, King’s attempt to link this minor improvement in his union’s membership to the recovery of the domestic auto industry is the real April Fools joke here…

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As galling as the auto bailout was for many Americans, the hidden “stealth bailouts” that occurred during the government-led industry reorganization are often even more galling. Today the final chapter of one of those “stealth bailouts” has taken place, as GM has sold its stake in its spun-off supplier Delphi for $3.8b, booking a $1.6b gain on the deal. So, how is GM divorcing its former in-house supplier a stealth bailout? Back in the dark Summer of 2009, the government organized a GM-led rescue of Delphi, which had been languishing in bankruptcy since 2005 (after GM. By buying a chunk of Delphi for $2.5b of the government’s money and selling it back for a profit, GM’s helped itself to a little extra bump of public money. Oh, and did we mention that GM dropped all kind of pensions in Delphi’s lap when it spun the supplier, including workers who had never been employed by Delphi.

But that’s not the worst part: any guesses as to why GM’s stake in Delphi is suddenly worth so much more? A recovering industry, perhaps? Wrong. Shortly after GM bought back its stake in Delphi, the supplier dumped $6.5b worth of pensions onto the government’s Pension Benefit Guarantee Company, causing huge benefit cuts and hidden government costs. What did the PBGC’s stake, given as “partial compensation” for that pension dump, yield it? A cool $594m. Meanwhile, thanks to the government ‘s arguments, GM still had to top-up UAW retiree pensions, leaving non-union retirees and members of other unions out in the cold [read all about it in a just-released GAO report in PDF here]. A shell game inside of a political payoff inside of another shell game, in other words. There’s nothing to not love here…

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.

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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