UAW President King wants creative solutions.
Negotiations between Chrysler and the United Auto Workers are off to a good start, the automaker’s top executive says, while United Auto Workers Union chief Bob King continues to stress cooperation over confrontation.
“The tone of the dialogue so far has been incredibly productive,” Chrysler/Fiat Chief Executive Sergio Marchionne said during the Center for Automotive Research’s annual Management Briefing Seminars.
Talks between the UAW, Chrysler, Ford, and General Motors began last week in Detroit and the first contract should be completed by mid-September. This year’s talks are unique in that terms of the 2009 federal automotive bailouts bar the union from striking either GM or Chrysler – while few expect a confrontation at Ford, either, where there hasn’t been a strike in nearly a third of a century.
UAW president Bob King said the union is more committed than ever to working with the automakers in negotiating a contract that would leave them globally competitive. The union eventually will focus on one maker to come up with a “pattern” contract it can then press for at the other two domestic manufacturers – though industry observers believe that the final settlements could be more unique than ever before, reflecting the wide differences between GM, Ford and Chrysler.
“UAW members and the UAW as an institution have more at stake in the long-term success of our member companies than any other stakeholder,” King said, sounding a distinctly different town from that of UAW leaders past. He added that investors buy and sell and executives can earn enough in one year to retire comfortably. Workers, on the other hand, stick around for life.
King said the 21st Century UAW is committed to working with companies to find ways to reward workers while protecting corporate profits. Senior industry executives, meanwhile, have been hinting that they are also open to discussing enhanced profit-sharing programs.
King said unions can serve as a brake on investors or managers who seek short-term strategies that boost share prices while sacrificing the long-term health of the business. “There is no benefit to workers in seeking short-term profit at the expense of long-term viability at a company,” King said.
Company insiders say the working relationship between labor and management has shifted significantly since GM and Chrysler emerged from Chapter 11 protection in mid-2009. The union is getting credit for accepting – even encouraging — efforts to improve both quality and productivity that likely would have been rejected in years past.
“We now know that the only true job security comes from producing the best quality products and services at the best value for consumers,” King said in a speech at an annual management briefing seminar in northern Michigan. “We are fully committed to the success of our employers. Therefore, the UAW embraces flexibility, innovation and joint creative problem solving.”
Before the negotiations began, Detroit’s automaker had indicated they wanted to expand the use of entry-level workers as allowed by the 2007 labor. The new two-tier program starts entry workers out with a wage of $14 to $16 an hour, excluding overtime pay, profit sharing, Traditional workers makes more than $28 per hour.
The Detroit companies also use temporary workers who earn the same pay as entry-level employees but don’t receive benefits.
GM and Ford executives have said before they expect to call back all UAW workers currently on layoff by the end of 2011, and that they expect to hire new employees on the second-tier wage at some plants by the end of the year. Notably, that includes workers at a suburban Detroit plant that is assembling the new Chevrolet Sonic. GM credits the reduced pay package with making it possible to bring the small car back from Korea. Chrysler, meanwhile, is already hiring entry-level employees.
Before the negotiations began this summer, union officials had begun to suggest the entry-level wage, now pegged at $14.50, is too low for workers to reach a middle class standard of living. Workers supporting a family of four on wages of $13.97 qualify for food stamps, UAW vice president Cindy Estrada noted recently.
During opening ceremonies at Ford, last week, King said the union wanted to see the entry-level wage raised. “We’re going to find a way to bring them into the middle class,” said King. Company officials have so far avoided making any commitments about the future of the two-tier program, which is a sharp reversal of long-time UAW policy.
Prior to the opening of negotiations, officials from GM, Ford and Chrysler also stressed they wanted to increase flexibility by eliminating contract provisions that can lead to abuses such as excessive overtime.