CONTRACT TALKS. Union presses automakers on job security
Negotiators for the United Automobile Workers, General Motors Corporation, and Ford Motor Company have only six weeks to make some of the most difficult decisions they have ever faced. Talks began this week for new contracts covering the 400,000 hourly workers at GM and 105,000 union employees at Ford.
While it is hard to predict the outcome, many observers believe there is a better-than-even chance of a strike when the current agreements expire Sept. 14.
But because both the union and management agree that certain key issues need to be dealt with, they could reach a compromise bringing significant changes in the employment system of the ``big 2'' without a confrontation.
``We're going to have a very difficult time, not because we're angry at each other, but because we're faced with a grave problem,'' says Al Warren, a vice-president and head of labor relations for GM.
The problem is that the automotive job market in the United States could shrink rapidly. GM's declining market share has led the nation's largest carmaker to trim its production base.
Eleven body and assembly plants will close over the next three years, idling more than 30,000 workers.
On top of that, with the increase in foreign and domestic competition, the ``big 3'' (including Chrysler) have moved ahead with outsourcing, a process in which parts and components are purchased from outside suppliers.
The parts are often made in countries with low labor rates, such as South Korea, Mexico, Brazil, and Taiwan. Outsourcing may result in a domestic factory being closed or scaled back.
Ford has already turned to Mexico and South Korea for its newest small cars. General Motors says it will likely close a score of component factories, turning instead to outside suppliers.
``Job security is our No. 1 priority,'' UAW president Owen Bieber has said repeatedly in recent weeks.
His counterparts on the company side of the bargaining table do not necessarily dispute that. ``It's in our interest to keep our plants open,'' says Peter Pestillo, head of labor relations for Ford.
But Mr. Pestillo and Mr. Warren say the only way their companies can guarantee jobs is if the union helps ensure their ability to remain competitive. That, they argue, rules out the UAW's second priority, a 3 percent guaranteed annual wage hike, and will require the union to make changes to give the companies more flexibility in their use of workers.
``Anything that makes us less competitive damages our ability to provide job security,'' Warren says.
GM negotiators say they might sweeten the formula used to determine profit-sharing bonuses paid to union workers. Under the current formula GM employees got no bonuses for 1986 despite the company's nearly $3 billion profit.
UAW officials have hinted that if they get strict job-security guarantees and some other incentives, such as better profit sharing, they may abandon their demand for a wage hike.
But insiders say there could be trouble taking such compromise settlements to the rank and file.
``I think they owe us more wages,'' said Doug Byars, a GM employee from Flint, Mich., as he picketed recently with several hundred co-workers outside GM's headquarters in Detroit.
``The company is on its feet, and they owe us the money we've given up'' through an agreement in a previous contract that abandoned an annual wage hike.
Complicating matters is an entirely different set of negotiations in Canada, affecting tens of thousands more GM, Ford, and Chrysler workers covered by the newly independent Canadian Auto Workers.
``We're going in different directions,'' says CAW president Bob White. A top priority for the Canadians is indexing pension benefits to the cost of living.
And because economics and provisions of the auto pact ensure continuing investments in Canada, job-security provisions are a lower priority than in the US. The CAW also is not interested in profit-sharing, but, rather, wants fixed wage increases.
Harley Shaiken, a former UAW researcher and now a labor professor at the University of California at San Diego, says he senses on the part of American negotiators ``a certain insecurity as to what the Canadians will do, and how that will be reflected in the US.''
Despite the potential problems, UAW vice-president Stephen Yokich, who handles day-to-day bargaining at Ford, insists, ``We have got the pulse of our membership.''
For his part, Mr. Bieber assured reporters that he is confident there will be a compromise that can fly with the membership.
``It doesn't take any real hard work, or a great deal of brains, to get a strike. You can get there real easily,'' he said Tuesday, at the opening of the Ford talks. ``We're going to work very hard to find the answer to our problems and save ourselves all that time. I wish 1987 would be the time we find the solution ahead of time.''