Business

Autoworkers hear message of ‘sacrifice’ to save jobs

01:00 AM EST on Sunday, February 4, 2007

By Sharon Terlep

The Detroit News

Brian Smith, Toyota Motor Corp.’s manager of truck operations, announces a marketing push in Detroit for the Tundra pickup on Thursday. Foreign carmakers continue to eat into American carmakers’ U.S. market share, which is a concern as autoworkers enter contract negotiations.

AP / Carlos Osorio

DETROIT — The message coming down from the Union Auto Workers’ top ranks as it prepares for this year’s contract talks is not the hard-line rhetoric of the past.

Labor leaders are talking to the rank-and-file about sacrifice and the need to help Detroit automakers become competitive again.

They’re warning of difficult negotiations ahead and reminding members of the dire financial straits and intense pressure the companies face.

In a recent meeting, UAW Vice President Cal Rapson told union leaders from General Motors Corp. plants around that country that “the way we conducted business in the past, when General Motors was very profitable, would have to change,” according to a recent note sent to plant workers in Warren, Ohio. “He made some comments that if we didn’t make changes, we wouldn’t survive in the future.”

The early messages come in stark contrast to the past, when the UAW insisted on gaining ground on wages and benefits with each new contract.

Ford Motor Co. has begun talking with its union chiefs on a monthly basis, even though the formal start of negotiations is months away.

And DaimlerChrysler AG’s Chrysler Group will enter this year’s talks from a markedly different position from three years ago, when the company was riding high.

“If we don’t make a profit, we don’t have a plant,” said James Kaster, president of UAW Local 1714, which represents workers at a GM small car factory in Lordstown, Ohio.

His plant has a program under way to educate workers on why GM’s financial success should matter to them.

“You can’t just say, ‘Hey we’re going to do things the old way.’ That’s a huge change for us.”

The negotiations will begin in earnest this summer with the goal of agreeing on a new contract when the current labor pact expires in September.

Last time around, in 2003, the UAW was able to gain ground on wages and benefits and held onto key provisions like the jobs bank, which allows laid-off workers to receive full pay.

However, the union did agree to a lower pay scale for new hires at major suppliers Visteon Corp. and Delphi Corp.

This year’s contract talks are expected to be far different.

Unprecedented pressures are driving the change in tone. The domestic automakers combined lost nearly $7 billion in the third quarter last year. GM and Ford have massive restructuring programs under way. Chrysler is preparing its restructuring, expected to involve job cuts, plant closings and the elimination of production shifts.

Foreign carmakers continue to eat into the Big Three’s U.S. market share, with Toyota Motor Co. surpassing Ford in the last two months of 2006.

Leaders at GM have said they will focus on cutting its annual health-care tab of $5 billion. GM’s North America President Troy Clarke said last week that retiree health care, a linchpin of the UAW’s benefit package, was an area of particular concern.

“The union has to be part of the recovery if the recovery is to succeed,” said Harley Shaiken, a labor expert at the University of California-Berkeley. He said the competitiveness issue — turning out better vehicles for less money — will be central to talks.

GM is working to increase that awareness among employees with a finely tuned message to its work force — one that balances appreciation for the union’s sacrifices with a clear message that more change is needed.

Already in the past year, GM and the union agreed on landmark changes to health benefits designed to cut GM retiree health care liability by about $15 billion and cut annual health care costs by about $3 billion. GM and Ford struck deals with the UAW that will lead to the early retirement of more than 72,000 union workers.

“There’s been the realization by everyone that these are incredibly challenging times and our fates are linked,” GM spokesman Dan Flores said.

Across town at Ford, union leaders and the company have been talking for months. The Dearborn automaker posted the deepest losses of the Big Three in the third quarter, finishing $5.2 billion in the red.

“It’s very delicate this year,” said Jim Stoufer, president of UAW Local 249, at Ford’s plant outside St. Louis, Mo. “Common sense tells you this is going to be rough. We are going to have to play ball with Ford and keep them competitive. But there is going to come a line that we won’t cross.”

Stoufer said members have a good understanding of Ford’s situation, but that workers will require a solid explanation if they are to agree on concessions.

Chrysler, the healthiest of domestic automakers until posting a disastrous $1.5-billion loss in the third quarter, will probably follow Ford and GM’s lead, said Sean McAlinden, chief economist for the Center of Automotive Research at the University of Michigan.

After initially dismissing the idea of a health-care deal with Chrysler similar to the one granted GM and Ford, UAW President Ron Gettelfinger said last month that the union is reconsidering concessions. The turnaround followed a landmark agreement Chrysler struck with China’s Chery Automobile Co. to produce small cars to be sold in the United States.

Adding to the pressure on the UAW is the growing number of nonunion auto jobs in the United States, as American auto-factory jobs steadily move south and foreign automakers build more plants here.

Many of those factory jobs come with good pay and reasonable benefits, despite the lack of representation for workers, a fact that’s not going unnoticed by the UAW.

When factoring in the bonuses, hourly pay and health and pension benefits, the average domestic automaker earns less than a nonunionized Toyota employee, Sean McAlinden said.

“Unfortunately, I do believe there’s going to be concessions given,” said Skip Dziedzic, president of UAW Local 1866 representing a Delphi Corp. plant in Oak Creek, Wis. “If the U.S. auto industry is going to survive, it’s going to have to change and we’re going to have to change with it.”

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